Market Profile: Mapping Environments Base Part 1

all right guys so now we've pretty much covered all of the basics so we've gone over all the Core Concepts within Market profile we've gone over you know Trends versus balance uh day types key contextual levels um you know how we create Composites all the stuff that ultimately is foundational so things are going to be iterating on moving forward um pretty much just definitions right what we're doing is trying to familiarize you with all the things that we're going to be constantly referring to a lot of this stuff that we frequently talk about on block

routes in general but it's really important to understand you know what the whole purpose of all this is right so the purpose of Market profile is really just to get a more contextualized map of the environment right so we're mapping the environment that's all we're doing we're creating context and we're identifying significant levels within structure so the obvious most popular way of mapping out the environment in trading is through the use of Market structure and you know this is by itself limited you know all we're looking at essentially is where there is a Confluence of

price action a Confluence of either daily closes weekly closes whatever time period you're looking at swing highs swing lows and Market structure we are getting an idea of where the market reacted where the market came in to in turn from but it doesn't give us a detailed idea of what takes place throughout the day where price is responding throughout the week these significant levels that might not pop up if you are not looking at something like a TPO chart or a volume profile even so you know identifying significant levels is one of the most important

things that we're going to be doing when we're using a TPO chart and this is not just Market structure so we're going to start on the high time frame so ideally we're going to work from the high time frame down but we're going to be extending the concept of significant levels to things like high volume nodes low volume nodes anomalies odd distributions inefficiencies within structure you know previous areas where the market has come into and had a significant response from so we look at something like a buying tail in the case of this is where

the market opened up rather this was not a this is essentially a buying tail but when we look at access uh areas where price was tremendously rejected and I mean that it is like you came in in contact with an immovable Force and and rejected very quickly so we see something like single prints right so the idea of a significant level is not just areas within Market structure okay when we look at a Candlestick chart we get a good idea of this but you know leaves out a lot to be desired when we're ranging for

example you know it's really useful to understand the area that price has been spending most of its time within where fair fair value has been established so when we're using a TPO chart there's always again three questions that we're going to be asking there's a handful of questions but first and foremost where is value developing okay where is Price being rejected and accepted are we in balance or imbalanced this list extends further even for things that we actually have not written down in the notes you know who is in control where is the market trying

to go and is it doing a good job of getting there those things come in uh more they come in more light into rather more into the light as we get further into order flow because when we're looking at a TPO chart while we can use the things that we discussed such as rotation Factor you know how we've been Distributing Through Time whether value has been migrating value has been moving upward or downward the point of control moving upward or downward you know this gives us an indication of where the market is trying to go

but when we're using order flow it actually gives us a more deep detailed rather gives us more detailed insight to that so from all of this from the levels that we're establishing we are identifying where the available trades are okay most importantly it's not just that we say okay you know here's a high volume node this is an available trade uh you know there is a structural inefficiency that's an available trade you know at any time there might be multiple available trades you know within within within earshot right so at any time we might be

considerably close to uh multiple trades right but it doesn't mean that all of them are going to set up equally it doesn't mean that all of them have the same probability of success ideally what we want is a good amount of Confluence between factors that we identify or between different environment types that we see setting up or rather what type of environment we're in setting up relative to current again significant levels and then from there we're able to weigh you know what opportunities we're looking to take advantage of but most of Market profile is focused

on the intraday so it is focused on The Daily time frame and not necessarily you know what has taken place over a bunch of days but we're looking at for the most part for example today's structure compared to yesterday's and and just a few days prior so a lot of the time you're going to be seeing a day that begins to open up and and for the most part you're going to be really focused on what occurred yesterday where we're coming from what current environment we're in what composite we might be in that we've established

if we're moving within a range but this does stop start from a top-down approach so we do start from the weekly but from there what you'll see is a lot of traders who are using Market profile they'll have very detailed charts where they will have their levels mapped out they'll have their levels labeled and they're they'll know what they're looking for so that's what our focus is going to be on so now that we have an understanding of again all these factors and and details that we are that we should have an understanding of we're

going to pay attention now how we would go about looking at the market from a top-down approach so let's use this example of structure right here if we zoom out we've seen that this has been a trending period so this was a trending period from the low down here we have value migration upward we have the point of control Rising we see the beginning of a trend this actually to the left before this is loaded this is a period which we're ranging for quite a long period of time this was the end of December up

into the beginning of January I'm sure everyone remembers that so we had this trending period through that level okay finally have a little bit of consolidation and we see that that forms after the value area is lost so one indication of the end of a trend is when we have not only value migration but we begin to have barely any overlap whatsoever and you have a candle like this where you have essentially this P profile and there's a ton of volume at the High we ultimately close below this so most of the volume at the

high okay we open at the midpoint of this structure capture most of this volume up here and we say capture it might as well say trap it and then we end up closing at the low the low volume area it's a high volume node but the low volume area of this entire structure if we're going to say two high volume nodes and we're back essentially at the previous day's value area so we don't have value overlap but we're closing back within the value area of volume so you could actually see if we roll back this

close right here is within the volume value area not within the TPO value area so as we get into order flow we're going to go more into the volume value area in the volume profile which again is just very identical to the TPO with exception that it's where a specific volume came in it is important to use both of these charts but we can see that price has kicked back and one of the first examples or one of the first things we talked about one of the things that we're looking for an example right here

is when we have value overlap and that is when we begin to Trend or rather that is when the trend shifts to more of a consolidation and a ranging period we have back-to-back days of inside value okay all we're doing is telling a story up until the point we're going to get at back-to-back days of inside value consolidation leads to continuation in this case and why would we assume that consolidation would lead to continuation in this case well we just came from a very long range so now we could actually we could see even further

back I thought this wasn't loaded completely we came from what was a two and a half month range finally broke out of that range and one of the first indications of acceptance is all the volume that we had through here it's not like we were very swiftly rejected whatsoever so consolidation leads to in this case continuation and now we're going to focus on this period right here okay so we're going to focus on the first time that we have a major long liquidation candle and if you remember what a double distribution is this is what

we're looking at right here it is a structure that begins as a low conviction somewhat balanced structure rolls over either the market adapts the new information very quickly it responds to new information or the market has liquidated what is at this point a very long Market okay so the market in this case we see that attempts to move upward we have rotation factors in this case that are 17 initially 12 17 the following day within values so you're not really seeing much in terms of continued upside action so where you have a large date to

the upside the market spends a lot of time consolidating and this next move that follows leaves us with this long liquidation structure we say long liquidation structure because of this single print and we're going to be talking about this location right here so the first thing that we're going to do to map out our levels is go to the weekly it's a higher time frame approach means that we're looking on the weekly chart so we could see we're up until this point up until the 20th where most of our value has been established so we

know that this has been a trending structure we can see that these profiles are not exactly balanced whatsoever and we can see that towards this High we did have over these weekly structures essentially in the beginning a one time framing market so Market opened at the low and spent most of its time moving upward and in this case we see that value is relatively balanced but that we close at the low end of value so rather than continuously closing towards the upside the trend that came out of this range right you see that we close

at the high over here we close at the higher value over here you can start to see that this is beginning to shift so in this case we have a point of control that comes out of this range leading up towards the higher value close at the high continuous Rising the point of control within these structures within this week and then we see that within this weekly structure that we close out that we have the point of control at the low and we close at the low so it's not like we close at the high

and we have the point of control at the low which would be a good potential sign of a base building okay in this case we're closing towards the low end of value not necessarily a good sign so we're looking for what is a consolidation or range to form so from the higher time frame down the first thing we do is we're going to map out where we currently sit within value so we're going to identify our value area extend this forward so now we have an understanding of where the value area is for that week

so we're going to make this a little bit more transparent so we could still see okay so now we see our value area and another important level always even though we are trading based on Market profile always weekly closes weekly opens and these swing points so this was our close for that week right here right around 8 700. so now when we have our weekly levels marked out so we should take into consideration where the point of control is for this week so the point of control being right here we could go ahead and label

these so chart drawing properties if we are using something like Sierra it doesn't really matter if you're using Sierra or EXO charts or any of the other tools it's going to show you you're still going to be able to see or be able to rather create text on many of these platforms so we have the weekly point of control it's a weak Park we know that this is the weekly value area so we're going to make sure that we have these prices indicated so labels on the right show price levels go ahead and select that

just running through how we would go ahead go about looking at the market so now we have after a trending move the first time that a weekly level has closed at the low so we're going to be looking for a consolidation to form all right at least within this value area so now we're going to go down to the Daily we're going to go all the way back to that structure so we should be able to take myself back to it by there we go so we're going to look at how this week starts off

so ultimately this is the point we're leading up to okay so this is the close of that week this red line right here so we have an understanding of where that Weekly close was we know that for the first time we are closing at the low end of value mind you that this structure right here okay so this structure this white box this is the value error for that week that we just closed out so for the first time within the structure it gives you a little bit more context you see that we had a

little bit of back and forth between value it wasn't the case that we had value continuously moving up this consolidation formed and essentially the final day of this week we closed below back within a value area that we established within the middle of the week so we could see that we lost the last two days that were in balance we completely took out this level had this long liquidation structure in these single prints so we have an idea of where some of these important levels are right now so we have an idea of where single

prints are so we're going to go ahead and Mark this off because what we said was single prints should ultimately act as an area of resistance or support if we are returning to that level so this is an area where inbound structure ended up all right so you're looking at this what this is is essentially it's an inefficiency the market moved right through this level and there wasn't no two-way trade and this is where the market came back into balance you can see that there is a ledge right here before the single prints so you

don't have a smooth distribution you definitely don't have a bound structure and you have a single print level that begins right there so we know that we're at the low end of a weekly value area now we know where our single printed print level begins so we have what are the beginnings of a level that has a good amount of Confluence that in this case if the trend is changing would act as resistance okay so if we're looking at the structure keep in mind what we're looking at as I'm narrating this what we're seeing is

that right here so I'll make sure I have my other drawing tools on we're seeing that right here there is the single print level the weekly close as well so I'll just go ahead and highlight this with a different color so I'll make sure that I have my drawing tools set up so they are red and maybe slightly larger so we have the single print level and the weekly close of the week prior okay so we know where the higher time frame level is now so always have an understanding of where higher time frame structure

is okay higher time frame structure is going to be where larger participants get involved we're at this point going to be playing with a lot more participants we're not just trading with intraday Traders this is an extreme in Market structure after we just came out of a multi-month range okay so we have an idea of where a major significant level is so if you're looking at and I'm just going to make this drawing to a little bit smaller now maybe I'll make it Pink so that it stands out even more because we do have red

on the chart if we're looking at this Zone as an area of Confluence between a weekly close after this level was lost and the beginnings of an inbound structure so we're looking at a double distribution what we would do is want to see the extreme in this case be invalidated so if we were going to say that price was going to continue to move up it wouldn't only be that we'd be paying attention to the weekly structure at this point this is the case for paying attention to lower time frame context or lower time frame

distributions rather to get some context is that not at this point we just want to pay attention to the weekly level if we're going to be trading intraday if we're going to be trading as a scalper or as a swing Trader even we're going to want to also pay attention to this single print Zone where there is a ton of imbalance so this is a low volume Zone there's really nothing that took place here it's a structural anomaly this represents a very inbound structure okay this is the beginning of single prints and a ledge right

we've gone over all these con these Concepts so if there is any area that is to invalidate this move up continuing down it would be the high of this confluent level so we're looking at again right around 87 60 87 70. so we're going to anticipate that after a large move like this that the market is going to find some level of balance initially so after a big structure like this after a double distribution like this you're more often than not going to see that the market is going to remain in Balance initially right after

this structure ends closes out so you're going to see that this is a double distribution right here and that more often than not at least the first day that follows is probably going to be pretty balanced so we have an idea of where our key levels are within just this structure alone okay so what we want to see is that this level above the single print area serves to reject any kind of advance okay so where is value developing well we can see that value shifted over time we have the loss of that Weekly level

okay on the weekly time frame now we're closing at the low end of value and on an intraday basis we are starting to create what is likely a value area within the structure so you have a weekly value area composite right here and we're going to be forming rather this is a weekly value area on the weekly candle but we're more than likely going to be forming a weekly composite On The Low End excuse me a a lower time frame daily composite on the low end of this weekly structure so at the low end of

weekly value we're in Balance so this is where value is going to be developing but it is within a previous weekly value area so it's really important to understand that the trend did change in the short term right the trend changed in the short term from a structural standpoint from a value migration standpoint and now we're at the low end of where that change occurred so with the low end of that value area of that higher time frame structure so value is developing here the area that we would anticipate that would serve to reject price

is the extreme of any one of these confluent levels so in this case the extreme the highest value would be the single print level and if we're looking for a rejection what we don't want to see is the obvious sign of acceptance Okay so the first left first time that we come in contact with the single print level we don't even come close to it we don't even interact through it price turns from this level and this is mind you if we combine these days we get a more complete idea so the market ends up

on the second day closing more towards the midpoint and again as I said after a double distribution stays in relative balance for that first day okay the next two days are a little bit more telling okay so where is value developing our significant levels again single print the point of control for that Weekly point of control is still being respected even on this intraday composite level okay so where we spent the most amount of time and transacted the most amount of volume on that Weekly structure so if we again if we go back to the

weekly structure we're looking at the point of control that is right excuse me we are looking at the point of control right here okay so this is that week that's why I was confused for a second this is the week that we're currently analyzing but this is the weekly point of control that we have an extended line from so going back to the Daily so going over here again the drawing tools are not falling there we go they stuck together so we know that Above This level is an area that we should expect that price

should be rejected so we're going to draw that again so now that we understand what level we're looking at we're looking at into this single print zone so this is where we're going to look for signs of rejection now a sign of acceptance would be the market coming to this level and not being rejected instead you could see that so far the second day in we have a good high so we have the market that closes towards this level at the highest value but again below the key level that we have identified within this structure

So within this context remember the order of operations we're looking at weekly structure but we are giving it the extreme which is in this case the single print within the structure to look for acceptance through if we're going to say this might continue but instead into this single print Zone into this structural anomaly we have one of the first signs that the market is not being accepted which is that the market in this case comes in okay and is quickly rejected outside of and falls back within this balance level so single prints comes into that

level we have a clean High that's established and the market falls back within the next day you can see that the market comes into this level again and is rejected twice so a sign of acceptance would be holding two tpos so we're looking at two tpos within here but we do not hold this level the market moves into this level and then very quickly moves out we do not get any kind of acceptance into this Zone all right so when we're mapping our environment what we've done is we've established our weekly levels we've taken from

what we know in terms of what was setting up so in this case we have what we're setting up is we had a single print level on a double distribution so the area we're looking for rejection is within the single print level okay so so far two back-to-back days and at this point what we've done is we've actually formed a composite so important to remember when we're within value we're asking where is value developing value has maintained this level okay so the market moves into a level where we're looking for it to either be accepted

and move upward or see a clear sign of rejection okay now from what we know the value area when we move outside of the value area and gain acceptance back into the value area we're more than likely going to at least return to the point of control but more than likely going to cover value so in this case what do we have price moves into the single print Zone there's no sign of acceptance whatsoever it's a little bit more clear now when you look at the volume profile no volume transacted really whatsoever over there there's

a little bit of excess in terms of volume and what do we do we fall back within what was our developing value level and we cover from the high to the low so this is a case of one of those opportunities setting up where when you gain acceptance outside of value and return to a previous balance level you move from one extreme to the other okay so shortly after the market actually breaks down from this level all right so the market breaks down from this level we know that this was our last balance area so

this brings us this opens up the potential for new contextual levels to set up so let's do one more example of mapping out an environment to point out some of the more significant levels how we would go about mapping out the environment period so this is a structure they're going to treat as if we are just like the last one starting off right here so how are we going to be looking at our current structure well we're looking at this one and it appears to be that we came from a very strong Trend to Value

overlap which one of the first signs that we might potentially be forming a range this week makes it very clear we have an inside week from high to low standpoint and inside value so one of the first signs that the market is beginning to fall into an area of balance or a consolidation or a bracketed market and what we have are three back-to-back weeks where we are in relative balance within value so we're going to take a look at this the way that we normally would we're going to form a composite and identify our key

contextual levels from this composite first so we have our value area high and our value area low so the value area high coincides with a high volume node the value area low that is where we begin to shelf off or where there is a considerable ledge so if we're looking at this distribution it's semi-balanced if you're looking at it Loosely we could see that we are spending most of our time within the center of this structure but is not very evenly distributed so you can see that there is a shelf here and a pretty steep

drop off here so we have our Valley area high value area low and what we're going to do is also Mark the point of control within this structure so that's our point of control right there and our point of control within value is right here so we're going to say that this general area is likely going to be where a good amount of reaction will occur this is more or less fair value within the center of the structure so again point of control right here is volume point of control right here is the TPO pointed

control between these levels we can see if there's a high volume node right here a high volume node right here this will likely be the meat of this structure moving forward if we're going to continue to range but what we've seen with this structure is that there wasn't that much of a reaction off of the lows so what we're going to do is unravel these into this low we had a good reaction but down here we had a little bit more acceptance so the one thing that we're going to be paying attention to is how

we respond if we fall outside of value and for the first time within this structure right here you could see that we've actually entered in below value and have shown some sign of acceptance so if we unravel these completely so we're going to merge these and show you the kind of response we had throughout this week take this drawing tool off you can see that as we came below value multiple times we responded by leaving very quickly so now this is the third time or the fourth time that we've moved down to the low and

this is the first time that we've gained acceptance into this level where there is actually single prints if you're looking at this on the daily profile so this is important we have shown a sign that we have gained acceptance through what is the most important contextual level within the last few weeks and that's the value area we've gained acceptance down here and the area where we have not shown much of a buying tail is at this low so we see that this is probably a target for some type of cleanup now we're looking at the

weekly structure if we're looking at the daily structure it would look more like a poor low on individual days so if we go down here to the Daily we can see that we have a poor load down here at our low there's not much of a buying tail down there so when we open this up we get a bit more context so not a sign of rather no sign of excess down there no sign of a buying response no sign of a tail and now we've gained acceptance below the value area so it's more than

likely that we're going to clean up this tail so this would be an area that we would mark off and look to either a see a stop run take place or for a breakdown so ultimately we know a level that we want to be paying attention to something like this occurring so breaking below it and then reclaiming it which sets up for a return to the value area low or breaking below and failing to reclaim it which likely leads to a further breakdown so we have one of three significant levels right now that we're paying

most attention to and that's because we've gained acceptance through the underside of where we have been auctioning within for the last three weeks so again the first time that we've really gained significant acceptance into this low so rather into the structure we spend most of our time 70 of our time auctioning within this within this location and this is the first time that we've gained acceptance to the downside so in this situation I would anticipate that we're going to come down to this low and the kind of response we get down here would dictate our

response moving forward so we'll just go ahead and add some more days to this chart so we have just on this daily alone we know that what we have within this structure is a double distribution setup so we have an area where the market was actually balanced over three days or two days rather at this low did not do much to leave the low and rather instead of moving to the upside we had an impulsive move to the downside before stalling there before closing that day out so this might be the kind of structure where

you would look to initially find resistance at this single print before potentially continuing down to this low so we'll monitor for that so we're going to go ahead and mark off the beginning of the imbalance compared to where we currently are so the beginning of the imbalance meaning that at the beginning of the single print for this day that we're currently looking at to reflect upon as we see how we move forward so let's open up some more days go ahead and change the chart settings let's take it two days forward but let's take it

one day forward okay so as we can see the level that acted as resistance one of the first levels that we would look to is the beginning of the single print level so the area where this imbalance occurred where we'd expect if we're revisiting from the underside after gaining acceptance into this structure gaining acceptance outside of rather this range that we were stuck Within we'd be looking for this to act as resistance and surely enough price came into this level before moving down to the low so we were sideways for the last three weeks price

was stuck within a range this was the first time we gained acceptance to the downside outside of this range and the first area that we would expect to act as resistance and also the first area that we would look to to be regained has acted as resistance and what we end up doing is visiting the low and in this case we actually don't come all the way down to the low and if we remember this correctly this was on November 17th we go ahead and open up another day we'll see that in this case we

actually do revisit that low we'll open up two days because we blast all the way back up so we'll go ahead and do that we see that we actually took out that low so what that brings us to is back to this prior range okay so it brings us right back to the last area that was most agreed upon which is this range that we were stuck within for three weeks so this is going to be now dictating our approach moving forward because what we did is we're in a Range we formed a low we

formed a high moving sideways most of the time within the structure but now we took out this low and we've gained acceptance back within the range so what our bias should be in this case is that we're going to auction within this range the same way we did prior now mind you these are not the setup videos this is just a video that I want to put out to help you understand what it means to map the environment so just paying attention to what's going on on the weekly first keeping in mind where we sit

within weekly structure are we ranging are we in a trending Market mapping out the weekly contextual levels so where are our high volume levels where our low volume nodes where has the market shown signs of rejection where has the market not shown signs of rejection and then getting down onto the daily profile and getting a more broken down view of this on the daily sessions so seeing where we have signs of imbalance where we have signs of balance where we have structural anomalies whether we're looking at in this case this single print Zone over here

to identify the market probably would find resistance off of this level which it did and this is just a way that you need to be looking at the market you need to be looking at it from the higher time frame down to the lower time frame and mapping all of these considerations out all these important levels out to have an idea of where we might visit what we need to hold what we cannot lose and so forth