Learn Trading using Market Profile in Live Trading!
uh 12th December profile you can see the pocs here and the volume profile um you know high high volume node is right above the POC right so these are more or less uh near to each other in very exceptional cases very rare cases you will see um you know these differ from users correct suppose right [Music] foreign [Music] foreign thank you for coming from Delhi and uh willing to record this one absolutely it's my pleasure it's an honor to be here meeting you so sweet of you uh thank you so friends uh this face to face transcription and I came across you park thank you so much Basics and they can get into it fantastic thank you so much um I started with my chartered accountancy um and uh in 2016 I actually got into the stock market the very first article that I read about the stock market was in 2016. it was actually uh about short selling Short Selling and it was on Investopedia I remember that um uh eventually 2018 may I got into full-time trading and since then I've been I've never stopped trading nice but in 2018 I made the switch to CFA so and along with that I was learning to trade I'm still learning I'll probably continue to learn yeah for the next next hub however many years that's why I suggested lifelong learner because Market really knows who the learner is right right definitely yeah so I I thought CFA was serving my passion a little more um so in trading and in life as well both of them foreign foreign and so the confidence grows as your Capital grows as you become more and more successful as you become you know more and more you start making money in the markets confidence automatically comes in but it will take on a general uh time frame it will take around two years eventually you have to scale up uh and that's where my family came into play my family and my wife they helped me a lot um [Laughter] in order to support me and my wife as well actually every important point in the form of educating them foreign so we'll talk about auction market theory and Market profile now before starting what is what Market profile actually is uh Market profile was actually invented by a gentleman called J Peters steidelmeyer okay he was a Trader in the Chicago Board of Trade he used to trade Commodities greens currencies everything almost iterated and through these things I want to key s right so um I want to trade based on value where is the value right I'll give you an example a very simple example um so for example if I make a car right and uh and I went to the market and I overpriced that car right no volumes will come in right no customers will come in suddenly I will realize the price I will lower my Price Right Suddenly at the lower price on every sale I am making a loss so where is the value the value is somewhere in between right so that's what we're trying to find out through Market profile Market profile will tell us where the value is of that particular ticker be it Nifty being Bank Nifty for every particular day and based on that value we will take trades why is it every particular day or every particular moment exactly is the software takes care of that and for every day you can clearly see value area I mean obviously you can see that the software is capable of that but it works best okay fair enough all right so it'll be interesting here okay uh this is the the I'd say this is the most important screen to me what trading is and what trading is it isn't okay uh let's start with what it is column right it is a way to create wealth from my excess Capital all right the excess word is very important it's a way to create wealth from my excess Capital not from my main capital all right so excess and I'm trying to generate a return from the excess Capital why because obviously I don't want to create a headache you're trading losses so I mean how will I run my house right there and uh okay so the next point is 20 tools and techniques 80 psychology the biggest part in trading is obviously psychology you can use all the tools and techniques you need but psychology you can never Escape right you have to have a very good strong psyche very good strong emotional um you know emotional uh um emotional strength right the third point is uh that trading is a business you have to look at it as a business you cannot look at it as you know as as gambling as pure gambling you have to look at it professionally the moment you start looking at it as a proper business that's when you will start making more and more money right um so again trading is not my primary source of income it should not be your primary source of income um also it is not a way to boost my ego and uh because as I said earlier the moment you involve ego into any part of your life be it trading or in any other business things will go wrong all right so a question it should not be a primary source of income right uh professional Traders the professional Traders but for me personally I think that it should not be your primary source of income because obviously for a life means this is for actually for uh people who are want to get into it full time okay so trading for me personally it's now my primary source of income um because obviously I Do It full time now because obviously it's a full-time job you can't do it part-time and salaries salaries they start trading with that money and that is very dangerous so I would always suggest that you trade with your excess Capital uh unless you're doing it full-time obviously got it so moving on to the next uh slide here we have our list of points that have actually worked for me in trading over the over the years uh a concept is polarity what reversion of polarity means that when a support is broken it becomes a resistance and when a resistance is broken it becomes a support correct these zones that were previously a support or resistance and have now become the opposite these zones are extremely important zones once you get a good grasp of what is happening uh in these zones a good grasp of the price action happening in these zones you can sort of uh make a good probability based trades and you can you know uh make some very successful trades from these zones the next point is uh reading the oi charts uh open interest charts they help uh to only to some extent I don't suggests you should always look at them in conjunction with the price charts of the underlying they give you a very good conviction of Market participants okay because if the price is moving upwards and the open interest is also moving upwards it tells you how uh you know how strong the underlying business is okay then the third point is and this is actually a very potent one um this is known as the midpoint of a momentum bar so momentum bars in my uh in my definition is Right a bar with the you know minimal Wicks on both the sides so such momentum bars the midpoints of such momentum bars act as a very good zone of support and resistance true right uh after that we get into the Mead of further subject which is auction Market Theory principles and uh obviously Market profile okay the last Point here is uh and this is just me I have been doing strangles for a very long time now and I have been making a decent amount of money around uh four to five percent a month um I think strangles are one of the most underrated strategies uh people like to do you know very complex strategies uh but I think the more you keep it's simple especially in options the more money you'll make so I stick to strangles and now let's move on to auction market theory and Market profile so now auction market theory auction Market Theory um again Peter J Styles and then this really uh got famous through uh a gentleman called Jim Dalton okay right but this was originally uh obviously invented by Mr J Peter steidelmeyer okay what this says is it answers a couple of very basic questions relating to not just any uh not just the stock market but any Financial market right it answers a couple of very important questions what are those questions the first one is why does the stock market exist Hindi Hindi okay so why does the stock market existence important question stock market exists it exists to conduct business on a daily basis stock market Rose 9 15 to 330. what business does it conduct it conducts the business of buying and selling of financial instruments this we already know this is a very basic answer and that's the business that is basically conducted okay so now who conducts this business uh business is conducted by sellers and buyers buyers or sellers continuously exotic interact to you know create a shift in the prices the ticking off the prices that we see on our charts that is created by buyers and sellers buyers foreign stock go up and down this is I think one of the most important parts of auction Market Theory uh styles foreign okay so to the next question why do the prices of a stock go up and down again a very basic question Joe auction Market uh Theory prices go up to find sellers who can then extract liquidity um similarly uh on the downside the prices go down to find buyers who can then provide liquidity so the downtrends that we see uh in the market those are caused because of uh because the market is trying to find buyers and the moment they will come in with their money they will provide liquidity to the market and they will buy all the stock they can right so uh the markets Trend to find sellers or buyers right now the next question is what happens once the buyers and sellers are found right prices are trending upwards now they've found a lot of sellers sellers go uh sellers they want to sell they have a very attractive price times what do they do well at that point they will slowly start offloading their stock right and in this phase what we call what we usually uh call is a consolidation phase the market tends to go sideways Cricket seller foreign foreign foreign they want to book their profit they're done with their trades they want to book their profit and that is old business this old business is very slow this is not as aggressive right auction Market Theory says old business getting out has this is in this can be in the form of long liquidation or this can be in the form of short covering so long Edition and short Edition is always very aggressive long liquidation and short covering is I mean it's not so aggressive uh it does not lead to new trends right new business always leads to new trends right uh either an uptrend or a downtrend right now the last question obviously would be how do we know if an up move is caused by new business coming in or by old business getting out right market prices are going upwards how do we know business open interest short covering exactly open interest is one way but auction market theory answers it in a in an even better way it says which is volume and follow through if any of these is missing there is a high probability this is just old business getting out that is a fake up move and you should stay away breakout supported by volume right so exactly it's a higher probability exactly okay so follow through here okay uh let's suppose you say you're watching a one day chart right that means that there is no follow-through even though you can see you will see a massive volume Spike like in price has not sustained above the uh breakout zone right so price once the price has sustained daily charts above the breakout Zone then we will know for sure along with good volumes then we will know for sure this is long Edition genuine medicine so this is not uh you know old business getting out so much here right so this was a basic auction market theory and uh the best thing about this is this will form your base for a market profile okay uh you will be able to trade better with a market profile once up quiz started basics of uh seek logo right let's move on to Market profile 101 then Charlie okay so before I start into what Market profile is um I'll just give you a quick uh sort of go through exactly Market profile how is it different from uh you know candle charts so Candlestick charts up to open high low close right what Market profile does is Market profile does uh the same thing but in a visually different manner right what it does is it will tell you the time price and volume the three things um stated those three things in a single chart right [Music] um then you can take more uh you know more uh strong trades and then more you have a better chance to be successful right so now we get into how our Market profile charts actually plotted uh the first thing that we need to do is let's open a normal step one will be to open a normal Candlestick chart on a 30 minute time frame so for example many um Candlestick chart this is a 30 minute Bank Nifty spot chart for 6th June 2022 right I have converted every single candle into a bunch of letters and these letters go from a all the way to M the first candle will be denoted by a higher so as you can see in the image below a is running from the high of the candle to the low of the candle okay right the next candle will be B the next candle will be c d e f all the way to m is actually configurable you can configure it on your own in the software okay but by default it uh you know it is a it can be around 10 10 points 20 points it depends on the script that you're trading so hard for the very first time and then uh you know once the software knows then you don't have to do it anymore right so um in the second step we have uh converted those Candlestick charts into a bunch of letters that range from the candle height to the candle low and they go from a all the way to the letter M now on the third step this is very interesting sorry to interrupt you about this basic questions correctly got it foreign foreign so in the next step we see this is a very interesting step uh step three what we do is we um we basically make all the letters fall on top of each other on the y-axis the vertical side here on the left is the y-axis oh what we do is we take all the letters and we make them fall on top of each other just say Tetris exactly like that so we make all the letters fall on top of each other and now clearly this this resultant figure that you see where my cursor is this is the resultant Market profile chart right of that particular day now the best thing about this start uh this is where I answer key difference the best thing about this chart is this red line this red line This Zone this particular zone is where the most amount of time has been spent of course right because every block is a 30 minute block yeah right so you can clearly see that in this particular Price Zone the most amount of time has been spent yeah now Mr steidelmeyer said that he does not trade price he trades value and the best way to know value in any Market is to know how much time is being spent at a particular price so for this particular day is so this is the value and this is how Market profile charts are actually plotted now uh the good thing for us is that we have software to do the hard work for us um the software is plot these charts for us and we can just you know make them uh visually more appealing these charts are automatically plotted in real time actually uh again it was uh J steidelmeyer's uh you know experimentation experiment yes 30 minutes he found that 30 minutes is the most uh you know visually appealing and he figured out that 30 minute charts May this works the best so this is what I've been following and honestly uh personally 30 minutes away I think it works the best yes so moving on uh now we will talk about some basic terms we saw Kia Market profile Pura chart here right so this red line that uh was in the previous slide as well here this is this line the line of value this is known as the POC the point of control this is the most important thing that market profile charts tell us right the point of control is that price where the maximum trading during that day happened right another thing that market profile charts tell us is this big gray area that you can see uh the value area has been denoted through this arrow and this gray area this big gray area is the value area what is value area value area is basically uh POC K upper 35 POC 35 that is denoted as the value area this is the particular Price Zone the POC is the particular price point and this value area is a full Zone jumper value established now this value area and this POC once you start looking at it on a day-to-day basis every day the the way it is changing the way the value area is expanding or Contracting this will give you an immense uh you know a plethora of information of how Market participants are coming in and trading with each other buyers the other strong hair your sellers are the stronger buyers buyers both aggressively okay so this is so after this yes correct absolutely correct buyers or sellers exactly and after consolidation we all know that consolidation right is the business is all done the price will again move in One Direction either upwards or downwards to find a new set of sellers or buyers it will go up to find sellers it will go down to find buyers right this is how uh auction market theory is tied in with Market profile once you start looking at the markets through Market profile uh I think price charts right so very exciting so now let's uh move on to an actual software uh which I have been using over the past uh you know a couple of years yes trading view may but users this is an official uh software that you can get in India cases [Music] correct go chatting maybe here uh so that is basically an entry level Market profile uh charting mechanism um this is this software on the other hand is a little more expensive so they also this is known as Bell TPO yes they have a wonderful team of uh you know coders who have made this platform and I have been using this it's very robust and uh it's a little bit expensive but again it does the job very well it's a lifetime license so you can keep it yeah um anyways uh so this is a little more expensive as compared to the gocharted alternative go charting is a little more cheaper so you can try out uh the go-charting one then you can move on to this one is okay I wish okay so let's move on to this software um this is today's market profile so if you look at it this is the uh this is the split version where every 30 minute candle has been uh displayed denoted by a particular letter and this is the uh basically the composite version right along with this in the middle we see there is this uh you know uh this weird looking thing this is the horizontal volume um right so in Market profile we don't use the uh you know the price alone as I said we use the well the volume as well so this is how we use volume we use horizontal volume and this is known as the value area I'm sorry uh the volume profile okay this is known as the volume correct correct this particular price rare occurrences correct so this is one of those exceptions these two differ but usually most of the times this happens this is the 12th December profile you can see the pocs here and the volume profile um you know high high volume node is right above the POC right so these are more or less near to each other in very exceptional cases very rare cases you will see you know these differ from users so anyway um so this is uh the basic Market profile chart and along with this we have three lines that you see the red color line here uh the green color line here and the blue color line here the green color line obviously we have discussed about this this is the POC the point of control um in this case it is being overlapped by the value area as well value area is um this is the complete value area right the green line denotes the uh POC and then the uh this yellow area this is the uh volume profile and uh so this is these These are the basics of Market profile and then uh for the more advanced I think foreign that means it's a good selling opportunity because price has eventually it eventually needs to come to the value right it eventually converges with the value right so uh very I think this is it for the basics uh so you'll understand a couple of more things in a better way definitely experience this is advantages okay so uh good morning friends today is the 15th of December and the time right now is 99 o'clock and 10 minutes so within five minutes we'll be starting with the live market right now what you're seeing the market profile chart is actually yesterday's market profile chart it's the 14th of December is Market profile chart and before we start with the current day I'll just like to recap some uh you know some important points for you first of all what you see here are three figures actually the leftmost figure where my cursor right now is it's actually the uh joint profile which is the middle uh portion here uh is the is actually the volume profile which shows the horizontal volume Matlab was particular price yeah volume profile right not the vertical volume it shows us the horizontal volume vertical volume um and the third figure here that you can see is actually the split profile her 30 minutes so again uh the left side here is the joint profile the middle part here is the volume profile and the right side here is the split profile now coming to these three lines three different colored lines the red the green and the blue the red line here is actually the value Area High the blue line here is the value area low now these red and the blue lines what they form is the value area the value area that we discussed yesterday this is formed by the red line and the blue light area the green line here is the point of control which will show us the price at which the maximum amount of time is spent that is the most important reference for any chart any any Market profile chart for any particular day right so with that we will start with today's trading uh in another four minutes one more thing about Market profile about this particular software actually Bell TPO is uh that uh for new Traders the prices have actually dropped um the price now is around 14 000 15 000 rupees uh I bought it uh a long way back at around 19 000 rupees if I remember correctly uh now it's 15 000 rupees so if you want to check that out please visit the website um for for the yesterday's profile what I'll be doing is I'll just be adding two horizontal lines on the yesterday high as well as the yesterday low this is only for my uh you know for my reference for and a little more visual Clarity so if the day starts below the previous day low uh we'll be able to you know take some nice trades okay so the first uh so we started we opened actually within yesterday's range just below the yesterday's the value area low as you can see the O here signifies the open for today and you can see the this hash symbol which shows the current market price so with this software uh what the software does is it takes the real-time data feed and it actually plots the market profile charts for you and so now you can see that the open was just below the value area low the price went all the way down to yeah to uh 13th December's value area high and then from there it rebounded this is literally within the very first minute uh of uh the Thursday of the expiry and let's say let's see how uh you know the first 30 minutes evolve and based on that we'll be taking some trades um one thing to note here very interesting thing is actually that uh and this again this is a part of the auction market theory the prices opened within yesterday's range it went down below the previous day low and then immediately sprung up what does that tell you that tells you that below the yesterday's low both strong buyers cup presence here and they did not let a lot of uh you know the price Linger on below the previous day low for a long time they immediately bought uh you know as much as they could and the price is now back above yesterday's low it's inside the yesterday's range now a potential trade uh setup right now would be that if the price enters yesterday's value area that means if it goes above the value area low uh previous days value or yellow that is then we can take a potential long towards the value area high this will be our first setup of the day and let's see if this plays out uh for now I have my positions here um my positions here I am again I'm trading with a capital of around three crore rupees um this these positions have been carry forwarded by me uh from yesterday to today so what I'll be doing is I'll just be I sold uh 44 600 I sold 43 400 on the downside uh along with appropriate Hedges of course um and now what I'll be doing is I'll be booking one or both the sides and then I'll be taking uh new trades for today okay so now as you can see uh the prices have breached yesterday's value area low and they are inside yesterday's value area so now uh this is a classic bullish setup and provided uh that we are in an uptrend right now a very solid uptrend I don't want to go against the trend so what I'll be doing is I'll be selling um put options and so as you can see the prices are just going are just racing upwards uh the target here would be uh the value area high uh the first Target would be value area high after that the target the next Target would be the high of yesterday uh which is okay by the way uh these charts are have been plotted by uh the Futures data these charts are not being plotted on the spot data um although I am trading on the spot Market because options obviously are on the spot market so uh a little price difference will be there and uh please bear with that so 924 and uh as I said the prices have already breached yesterday's value area or prices of value area um now this is where Market profile as a tool helps you in Risk Management as well that becomes a very important reference for today why because that's where our bullish bias will be negated agar buyers are actually strong aggressively uh previous day and if they are actually very strong they will not let the price back below yesterday's low um so the yesterday's low is a very important reference for today uh especially for uh Bulls agar if the prices uh go all the way back here they start trading here then we would say okay uh the Bulls have the Bulls are not strong enough and uh this might end up being just a neutral day after having such a good uh bullish opening uh so as you can see on this five minute bang Nifty spot chart the five minute candle has given a small pullback um and what I've done is I've exited my previous calls and let me just refresh this page uh I'm sorry I exited my uh you know carried forwarded puts and I have entered 43 800 with the one third quantity I'll gradually add it uh if I get better prices um but one thing is for sure uh if the prices come back below yesterday's low which is uh you know a very important reference for buyers I will probably look at exiting this position and we will take a fresh view on the market so uh well the prices have been uh have come below the yesterday's low now and that means there is a presence of uh some strong Sellers as well uh this buyer bullish reference has been taken out and uh so now the view has changed uh earlier we were you know really really aggressively bullish now it has turned back to neutral uh let's see how the day evolves probably we again go back probably there is an again an entrance of strong buyers here at these prices and we again uh enter into uh you know yesterday's value area value area and let's see how the day was uh for now I am sitting at one third quantity of 43 800 which is giving me a loss of around 16 000 rupees the call side I have not touched yet uh I will probably since the you know my bias for the day was uh bullish seeing the first two five minute candles I have not touched my call side yet I will probably sell um 44 400 call options um again with the you know um probably half my quantity half or one for one third of my quantity um based on the prices that I get sportpes Futures making average but let's see this is actually a very good point to go along a various Futures belonging aggressively top stop loss bot tighter go long Andrew so uh the b period has started and as you can see the prices are back within yesterday's uh range yesterday's value area in fact and uh right above today's uh a and b period you can see the POC and the value Area High uh so what I have done is uh as I said earlier I have taken one third quantity in 4 43 800 I've sold the 43 800 puts one third quantity I will keep on adding them on every dips for now uh as long as the market stays bullish uh this is still bullish uh there was uh you know an initial entry of sellers which took the prices down but then you know the buyers still fought back so there is you know an immense action going around uh for the first uh you know in the first one hour uh let's see where the market evolves from there and uh by the way it's going I think uh today we should see uh you know the value area high breached previous days value area high breached and uh yesterday's high high breached as well okay so friends as you can see uh now the b period is being printed here the b period runs from 9 45 to 10 15. so as you can see in the market profile charts every letter uh is a 30 minute uh Candlestick basically right and uh uh this period this the b period uh is runs from 9 45 to 10 15 the a period run from 9 15 all the way to 9 45. uh now as you can see the b period
is again being printed inside the value area as well as yesterday's range now the buyers have a very important role to play here uh in order to keep the markets uh bullish in order to keep the markets um you know uh in green they have to keep buying they have to keep buying on ask and in order to do that they have to take uh out the value area high and the value area low I'm sorry the value very high and the day high previous day is high so uh if that doesn't happen uh obviously if the buyers start getting exhausted if you know the markets remain sideways in this particular area for long the sellers will uh you know obviously take control or the buyers will get exhausted and then there will be uh you know a long liquidation uh downfall so in both the cases the prices will come down and uh therefore in order to keep the markets in green uh they have to keep buying and let's see how the market evolves I by the way have increased my uh put position I've sold another uh one third quantity um in 43 800 it is now actually sitting in a minor profit of around 16 000 rupees I still haven't touched my calls my MTM is around 2 lakh seventy thousand rupees for now um I haven't touched the reason I haven't touched calls is because the premiums are extremely low I think they will probably exploding if my bias plays out to be true if the if what Market profile is telling us is actually right other value area high tutor yesterday is explode and then we will be selling those calls at you know better premiums so the time now is uh 10 14 uh in another minute we will be entering the C period which will run from 10 15 all the way to 10 45 and as you can see after uh after one hour of uh you know uh you know battle between the buyers and the sellers the prices are back below the Futures prices are back below yesterday's low uh that doesn't mean that we are bearish that simply means that the buyers are slowly and slowly losing their footing so this uh you know this reference that I told you to track uh this actually is playing a very important role in telling us that okay buyers and sellers are fighting equally equally hard um to claim you know superiority and now we just wait and watch we don't take any overly aggressive positions on one side because this is uh this does not look like to be a trend day in you know on upside or on downside so we just wait and we see we use uh you know the market profile the references uh to track uh what the buyers and the sellers are doing um also one thing to note here is that today's value area as you can see these lines the value area the new value area high the red colored line the new value area low today is value area low these are being plotted below yesterday's value area low and that means that we are certainly a little bit bearish and that was majorly because the opening was uh you know there was a gap down opening so um you know because of that gap down opening we are certainly a little bit bearish uh not overly bearish though so we should be you know in a neutral position we should not go aggressive on any side this is where uh you know the risk management portion of the market profile comes in and uh SK alava I think again we should not be uh you know going aggressive in any position we should slowly add be adding to our positions the next reference downside obviously will be today's low uh the bottom of this a period and I'll just Mark a new line here and as you can see this is very close to Value area high of 13th December if you check this Bottom bar here this tells me that this chart this particular chart is of the 13th of December and this Val this a period low today's a period low is very close to 13th December's value area high uh this red line here which is the value area high of 13th December so again that becomes a very important reference now to track four uh buyers if uh if that fails then we would know for sure that okay this is not a buyer's day today and then we will make our put positions the posts that I have sold I'll make our put positions a little bit more uh conservative I'll you know roll them back a little bit and I'll take you know call side positions as well so uh one thing to note here is that uh you might have the question why did I sell 4300 why did I not sell 43 900 for example why did I choose 43 800 uh the answer to that is that between the current market price and 43 800 there are a lot of very important references that the sellers have to break in order to claim control of the markets uh that is in order to be in order to make the markets a little bit bearish so for that reason and alongside that the premiums were very decent uh basically but more importantly uh the risk reward for that particular strike was very good uh since there were a lot of important references like first of all yesterday's low needs to break it needs to sellers need to take that out decisively then we have yesterday's value area sellers need to take that out decisively and only then and after then will the sellers be able to reach my particular strike price so that was my you know thinking behind 4300 uh obviously the reward was high uh decently High uh the risk was also good and that's why I chose 4300 apart from that you can see the C period is now being printed and uh uh you know I mean uh we are again we went below yesterday's yesterday yesterday's low so this constant you know looking looking below yesterday's low and then coming back up this somewhere tells me that the buyers are not that uh you know not that strong anymore they're getting exhausted on one side now if you if you're gonna ask me if uh if this day is still bullish yes it might be bullish buyers can still come in uh for say a strong buying and they can again start buying they can again take out you know the sellers on the upside if that when that will come I have no idea um it can come you know between the day it can come close to the uh closing of the day um we have to track uh one thing you have to know in trading is that it is a continuous process you can't just form an opinion and be biased on that opinion you have you should have the courage to change your opinion based on uh the prices based on the references that are breaking and for me so the time now is 10 30 and uh the put premiums have crushed because of you know a couple of very large green candles my puts have given me are giving me a decent profit even though I am not trading on full quantity on the put side yet uh I only have two thirds quantity but they're giving me a decent amount of profit I'll probably add more uh if there is a pullback one thing I would like to tell all the advice all the uh you know all the new traders in the market is that you should always trade with the macro Trend the macro trend is very important for you uh in today's case yes the value area is below the yesterday's value area so you might think okay today is bearish yes we have breached yesterday's low multiple times so again you might think that today the data you know the prices are bearish the sellers are in control but you always have to frame your buyers based on the macro trend you have to go with uh you know the larger time frame players the players the buyers investors who are coming in on the larger time frames they're looking at monthly charts they're looking at weekly charts they're not looking at the you know minute charts like us so we have to align ourselves with the larger time frame players and this is something that Jim Dalton says um in his book as well uh so that's why I my initial bias was uh you know being bullish and even now my bias is bullish I haven't changed my bias yet yes uh the buyers may not be as strong as you know they were seeming in the initial 10 minutes 10-15 minutes uh but again my bias remains bullish for now so the time now is 11 40 and uh there has been a fresh amount of selling here after a very strong opening um you know the buyers took control they did not let the buyer the sellers took control they did not let the buyers uh take the price Beyond uh yesterday's value area high which is obviously evident by the fact and So eventually obviously sellers took control they did not let buyers uh go beyond yesterday's value area high and eventually you know buyers gave in they were exhausted 1K stop losses and the prices have now come down below today's high and they are now in the 13th December's range they have breached the 13th December's value area high which is this particular Red Line now ah this is a classic case where uh you know you start out with a particular bias uh and you say okay the market looks bullish to me and uh slowly slowly uh slowly and gradually this bias changes and again the references that really helped me uh during this transition of bias was this particular reference which was yesterday's low and obviously uh you know the value area high which was not breached now I will be tracking the new references again will be yesterday's low if the price if the buyer somehow managed to take the price above yesterday's low then again we will be completely neutral for now uh I think uh you know a lot of uh buy stop losses are being hit so uh I think the prices are falling a pretty dramatically the puts have exploded uh one thing that I made uh a change quite quickly was that I exited my puts on 43 800 as you can see here and I entered a fresh position of 43 3700 puts so I rolled down my puts by 100 points um the average price is around 12.73 uh again since the market is down a little more uh even that position is giving me a loss uh but I'm fairly confident that that won't be breached today uh if it uh you know starts sustaining uh within below today's low that is around 43 900 levels on the spot charts I'll be selling calls aggressively I haven't touched my calls yet my calls are still intact uh I'll book these this profit and then I'll be selling uh I think 44 200 or even 44 100 calls let's see how the market evolves now the maximum time spent right now is at this particular price which is forty four thousand one Thirty the high volume node right now is at this place uh also the POC is still at around forty four thousand one Thirty this this by the way is the the future start so don't please don't get confused other than that I think uh everything uh looks okay for now um if if by any chance the prices come back above yesterday's low I'll be moving my puts once again up to 43 800. okay so trade update um the market has been falling and it has been breaking some very crucial uh you know references uh the most important being obviously uh the 13th December's value area high and yesterday's value area low as well as today's value today's uh opening low uh so what I've done right now is I have exited uh you know my call side positions that I had that carried from yesterday and I've taken uh new positions I've sold 44 000 and 100 calls with half the quantity 50 quantity uh I'll add the remaining half once there is a pullback on the upside because if I enter uh the full quantity now and it explodes on the upside uh you know my call side will be in a big loss so I'm waiting for a decent pullback here um on the downside uh my on the downside the next reference important reference that I'll be tracking is this particular let me just split this profile this this the J and K period load that you're watching here uh around 43 984 levels will be the next important reference uh the reason here is that in an upwards Market this was the pullback low this was the low where the buying started happening again and so this will be our next important reference if this breaks then we will probably uh exit our put side positions and we will wait for the market to stabilize uh and then we will enter new positions uh so this was a quick trade update um the market has been uh you know taken over by sellers now the buyers are exhausted for now I think we will go into in other sideways consolidation phase for the next week or so and then again we will move upwards for now uh for today um you know the value area is low so taking any long uh you know aggressively long trades would be really foolish uh so I am protecting my puts by selling calls of equivalent value and I'll be adding more and more calls on a decent pullback so the time now is 12 34. this s j and k low has been broken now by today's G period um well that basically means that the buyers have lost you know there is no control by the buyers now um today will be today should be um a seller's market but since it is an expiry there is a high chance of you know some expiry games going on uh there might be some short covering rally uh in the last 30 or so minutes for now my positions look like this uh let me just refresh the page so what I've done is I have rolled down my puts a little further I've booked a major loss in uh 43 700 it's about one lakh 30 000 rupees uh what I've done is I've sold 100 quantity of 43 600 puts and I'm still running on a 50 quantity of forty four thousand one hundred um uh the only mistake that I did was I should have uh added I think 100 uh quantity here uh for calls on this particular uh you know uh consolidation here but uh I think it's okay um 50 quantity is good uh I'll add a little bit more uh if the price is uh go again higher and uh that's it for for now the time now is uh one o'clock and the H period is being printed on the market profile charts now for today uh as you can see here on the downside now I am tracking the 13th December low uh which on the Futures charts is around 43 900 and on the upside now I am tracking today's low which is the a period the a period low which is around 44 070 rupees on the upside so these two uh references I've been tracking now in the positions there has been no change this is my MTM I'll just refresh this page for you um the markets have kind of stabilized now uh for now well at least um after this massive downfall um I think the expiry should be around uh 43 800 900 uh you know barring the expiry games if there is any massive short covering or even further long liquidation left uh there might be some more major moves coming in during the last 30 minutes for now the markets are a little stable the put the premiums have been a little calm on both the sides and I think that should be it for now uh the time now is 1 30 p.m the i period has
just started uh well not just started uh it started uh around 18 minutes back it will go from 1 15 and it will run all the way till 1 45. you can see the AE sorry the i period being printed here um the the downside reference is still intact which was 13th December low that is still intact the markets have certainly stabilized a bit this the aggressive selling has stopped uh well not stopped completely but yes they're certainly slowed down whether there will be a fresh round of selling uh is yet to be seen one interesting thing that I've been noticing now is uh that 43 900 call and 43 900 put are priced very differently uh the market is actually pricing that way there will be another uh you know volatility expansion on the downside there will be another you know down move coming so with that in mind uh I have my positions right now at 43 600 which is the 100 quantity and 44 100 call option which is again the 100 quantity um again the best case scenario would uh here be that we expire somewhere around between 800 and 900. uh but then again there might be a short covering Rally or you know you know another down move uh so we'll see what happens at this point the stop losses should be uh you know uh should be coming closer and closer uh so you know you don't uh get caught in the explosion on either side so this is the 2 pm update it's actually 2 11 right now and within the next four minutes we will be moving into the K period so as you can see on the chart the a to J period have already been printed um we will be switching to the K period at 2 15. um the market is uh sort of whip sewing right now as expected on the last few hours last couple of hours in an expiry there might be some sort of uh short covering coming in so what I'll be doing is I will be I I won't be moving my positions as of now uh I will just wait and track uh if there is a big move I might take one last trade but for now I think these will be my final trades for the day I will let them expire um so with this we will probably making be making around a little more than one percent for the day which I think is okay for uh you know with our expectation of around four four to five percent for the month and unless there is a big move you know towards the end on the upside I think the expiry should be within 900 and 800. okay so this is the 230 update the K period has started and again there is there are some uh big red candles being formed in the charts so what I've done is for my current position I have changed it a little bit uh I exited my 44 100 calls and I have rolled them down to 44 000. now the premium that I received was extremely low but uh you know I mean uh if the markets are falling like this you have to sort of you know be aggressive on the call side uh the risk reward is not too great but I don't think the for the you know the 44 000 will be taken out today so this is probably my final position now I don't think I will be changing it uh unless of course you know um some scary things start happening then I'll probably exit one of the legs and update you again uh as I said the time is now 2 30 K period is running it will run from uh 2 15 all the way to 245 and then we will see the L period being printed on the market profile charts so this is the 3 pm update now the market has fallen drastically and I think uh yes so what I've done is um I have I had exited my puts my 43 600 puts at around 12 13 odd and since then I've I'm just being you know sitting on uh 44 000 on the call positions I haven't touched them and I won't touch them I won't take any new trade today because I think we have seen we're seeing this kind of volatility after a lot of days and so um I think I'm just gonna let uh the positions expire now no new trades to be taken I don't want any you know last minute pressure um yeah so uh this big red candle that you see on the daily charts it's uh this has come after a very long time and well this should be good for uh positional players who are trading for the next week um the put prices should have you know increased quite a bit and yeah with that uh I think uh that should be it for this expiry um more new trades will be taken now uh also a quick update on my MDM so uh I am currently uh in a profit of 2 lakh rupees obviously a major chunk of the profits came from carried over positions from overnight um uh so we will close uh slightly above 2 lakh rupees and uh you know that should be around point eight percent a little more than that um for the day um I think which is okay for uh you know seeing such a massive volatility expansion uh especially on the downside welcome back hi parth thank you so much good uh sorry unfortunately live trading because I had some medical emergency today but I heard you go do you did great uh and you have shown your uh your strategy and the way you have handled the market market has been quite volatile viewers whoa I think uh or early on market profiles yeah I'm sure uh so I'm sure they're going to learn further sections plus we'll get more insights from him so overall in terms of profitability or loss whatever for merely lawsuits I am not here to only seek profit losses are a part of the game it is fortunately so we made around uh point seven percent uh on Capital um a major chunk was obviously because of the positions carried over uh actually it was a rough day for uh strangle uh sorry strangle sellers could have been much easier Concepts um but it was a day full of learning active data after a long time we've seen such kind of volatility or especially on the downside yeah uh as you can see I mean the trend is up the macro trend is up so Market both indices are down and so yeah I think it has been a lovely day for learning for me and I hope it is for your viewers as well 100 they will be learning profiles Market profile I'm very eager to seek your banana Market profile chart is extremely long sort of weird one um again I'd say not the best day to learn about Market profile but uh this is extremely magnified if I zoom it out a little bit you'll see you'll be able to see the shape better but not the individual letters yeah right and uh in the middle here where my cursor is right now so this is basically the volume profile and you can see the most of the business was done early in the morning right uh before I think 12 30. so most of the
business was done here and obviously at the end of the day we can now we we are yeah and uh you know finally I mean the market went down buyers were not strong enough and if I zoom this in a little bit now you can see the letters in a little more detail so this weird big shape today lumbar shape uh is uh you know today's market profile chart this is yesterday's within this range yeah and uh so this is where volume profile also comes into play it shows other businesses yes definitely so point of control as you can see the software has plotted somewhere around here so um the software has plotted the point of control right here around 43 960. this by the way is the future start this is not the spot chart okay because Sports so it's always better to trade with the future start on Market profile okay right so this is one of those days uh obviously there is a Divergence you know the biggest volume node volume profile there are they are different right right that's interesting because I was not there on the screen so just quickly so uh the con positions were fairly conservative uh I was hoping for a gap up initially but and initially so there was uh you know a very strong buying initially uh we saw that the price went down uh and then it came back up so that was actually not new business coming in that was short covering yeah that was old business exiting this is classic auction market theory that we discussed correct correct why because uh we were continuously checking for the buyers strength and market profiles to continuously check key buyers business uh aggressive is this the seller's exiting so basically what I was tracking was first of all you can see there was a huge uh you know buying any yeah the O here is the open okay right so the O was the open it opened it went immediately went up all right within the first five minutes it should shoot it up but the buyers slowly slowly started losing traction of the market if the buyers were really that strong buyers actually buyers go actually initiate or buying so they would have taken the market higher they would have taken the market Beyond yesterday's high oh and yesterday's value area high this is where Market profile comes in and helps us with its references these all these references that you see here they are Market generated yeah generated by the market mathematical formula yeah you know it's not some random line on the chart this is actual Market generated information so if the buyers were strong they would have taken the price is much higher they would have taken broken the yesterday's value area high and as well as the uh day high but that did not happen so slowly and steadily positions you know I was seeing volume so something is fishy right and slowly and steadily the Markets started falling once the markets fell down below the opening that's when I knew up sellers control buyers have lost their control and that's when I knew buying initially I see it was actually old business getting out oh this one's got new business yes definitely is point pay uh initially I was uh so basically I was long uh I mean I was I had shorted puts in that sense I was long I had sorted puts very aggressively but the were carried forward from yesterday because at this point I uh I heard the feeling and we will go up again right I did not you know sell call options I was waiting for that up move and I thought premiums and then I'll sell into that basically uh the retracement okay right so but obviously um it was dominated by Sellers and you know the market profile was very helpful in identifying sellers are in control today and that's where this tool excels it tells us exactly who is in control of the market and when that control will shift like everything is everything is evolving as the software gets the real-time data you can track where the value area is forming you can track where the POC is forming you can track the open the close and you know many other things well this is one of the features of the software um in you know traditional Market profile Theory uh we say that the references that are being created price prices will revert back to these references and then they will decide whether to go up or down gotcha right so basically what the software does is software uh unvisited lines for your you know more uh visual Clarity servers right so that's where this is a software feature you can disable it is if you can see and those that business was essentially you know sellers coming in aggressive sellers coming in and the buyers stop losses continuously getting hit because of such a large value definitely now we need to track up at this point we need to track whether the sellers that are that have come in today are they doing a good job of keeping the market bearish or not now since this is an uptrend obviously buyers can commit and at any time and uh again we need to check the strength of the buyers and the sellers which obviously Market profile Excel suppose uh foreign then we will say that again the buyers are in control sellers have lost their control the buyers are again in control and then you can look at taking long trades again that has given me a certain a little bit of loss but then again that is manageable I will manage that you know as time evolves positions again this is very discretionary um the premiums are very attractive and the risk reward you know risk reward is more important for every strike price if that is uh you know attractive only then I build the positions I usually wait for you know the Thursday to complete Friday go night positions very good okay Friday operations home uh especially when there is no event coming in so I like to you know rake in maximum Theta and that's the strategy say exactly is one at least at least one percent yes um sometimes the market is forgiving it gives me around two percent per week it gives me maybe some some days it gives me only point five percent a week sometimes I have to make book losses so if we talk about drawdown um you know February that Dreadful news uh he declared war uh that day it was a Thursday unluckily and uh so the market opened gap down and I was sitting in a very heavy loss uh I think probably around 10 to 15 of capital um it was I took very aggressive positions that day uh on Wednesday so the coffee uh coffee heavy loss but fortunately throughout that month I had made enough money I had made around uh 12 12 13 uh and I was able to sort of you know close in minor minor losses in that months and this is like those things so the average drawdown has been uh I'd say uh so it has been three percent uh for three months so it was a total of nine percent fortunately I haven't uh you know booked losses on a monthly basis okay so I was fortunate enough the markets have been kind to me good Market will always be kind with good people who do study so yeah so my hands were frozen a