Market profile is the older cousin of volume profile. Developed at the Chicago Board of Trade in the 1980s, it shows how much time the market spent at each price, rather than how much volume. Each 30-minute period gets a letter, and a letter is printed at every price traded during that period. These letters are called TPOs (time price opportunities).
The vocabulary
- Initial balance (IB): the range of the first hour of the regular session, the A and B periods. It shows how far the early traders were willing to push.
- Range extension: trading beyond the IB later in the day, a sign that larger participants have stepped in.
- POC and value area: as with volume profile, but measured in TPOs.
- Single prints: prices with only one letter, where the market moved quickly. They behave like low volume nodes.
- Poor high / poor low: an extreme with several letters at the same price, suggesting unfinished business and a likely revisit.
Day types
| Day type | What it looks like | What it suggests |
|---|---|---|
| Normal day | Wide IB; little range extension | Balance; large traders inactive |
| Normal variation | Moderate IB; range extension one way | Larger traders moved price one direction |
| Trend day | Narrow IB; steady extension all day | Strong one-sided conviction; don't fade it |
| Double distribution | Two separate value areas joined by single prints | A shift in value during the day |
| Neutral day | Range extension on both sides of the IB | Indecision; often closes mid-range |
Key takeaways
- Market profile shows time spent at each price, using one letter (TPO) per 30-minute period.
- The initial balance is the first hour's range; range extension beyond it shows larger participation.
- Single prints and poor highs or lows point to areas price may revisit.
- Day types, such as normal, trend and double distribution, describe how the session developed.