Market Profile – TREND REVERSALS
Market Profile – Explains all the Price Movement…
Trading Futures with very high degree of ACCURACY !
Stock or Index future gives a very clear picture by interpreting the following aspects:
1. Reading Open Interest data
2. Reading Order Book
We assume that there are two kind of buyers and sellers in the market.
a. Retail Traders
Retail Traders usually enter in the market as a buyer when prices moves up and they emerges as sellers when prices goes down. They do not give a significant picture on the chart as they are discrete traders. So one can clearly predict where retail traders are entering.
Look at the chart above. Retail Traders entered as the sellers. Once enough positions were created on the sell side by retail traders then suddenly stock moves up, eating all the stops of retail traders. So all retail sellers now became buyers by exiting from their positions. But the question is : When Retail traders were buying who were selling the stock ??? YES it was INSTITUTIONS.
If Institutions have SELL OPEN INTEREST on stock then GAP DOWN is a very obvious and that’s what happened the very next day.