Market Profile

Market Profile is a framework developed by J. Peter Steidlmayer (in collaboration with the CME) in the 1980s to visualize how price and time interact over a trading session. It replaced vertical time-based bars with a horizontal distribution of letters (TPOs) showing how long price spent at each level.

How Market Profile is constructed

Each 30-minute period in a session is assigned a letter (A for 9:30–10:00 AM, B for 10:00–10:30 AM, etc.). If price traded at a given level during that period, the letter is placed at that price. After a full session, the result is a profile that shows the time distribution of price:

Price  TPOs
5,254  A
5,253  AB
5,252  ABCD
5,251  ABCDE  ← Value area
5,250  ABCDEF ← POC (most letters)
5,249  ABCDE
5,248  BCDE
5,247  CD
5,246  D

Prices with many letters had high time-at-price (value). Prices with few letters were rejected quickly (single prints).

Core Market Profile concepts

Initial Balance (IB): the range established during the first hour of trading (A and B periods). Often the range the session trades within.

Value Area: the price range containing 70% of the day’s TPOs, representing where the market accepted price as fair.

Point of Control (POC): the price with the most TPOs: the modal price of the day.

Single prints: price levels visited only once (one TPO letter). Often mark the extremes of initiative activity and act as reference levels.

Profile shape: a balanced, bell-curve profile indicates a normal distribution day. A skewed, elongated profile indicates a trend day. A double distribution indicates two distinct value areas: often a key level between them.

Market Profile vs Volume Profile

Both identify value areas and POCs, but via different lenses. Market Profile uses time; Volume Profile uses volume. In modern electronic markets, volume-at-price is often considered more accurate, but Market Profile’s structural concepts (IB, single prints, balance/imbalance) remain widely used.