Market Profile: Reading Balance, Point of Control, and Virgin Levels
Summary
This article introduces Market Profile as a price histogram used to interpret auction activity and the balance between supply and demand. It describes balanced sessions as tending toward a bell-shaped distribution, while trending or imbalanced activity can shift or split the profile. The Point of Control (POC) marks the price level with the greatest recorded activity and is presented as a potential area of attraction, support, or resistance. A Virgin POC is a prior POC that price has not revisited; the author suggests that a return to such a level may provoke a reaction.
Examples discuss price approaching and touching POC levels, while emphasizing that these levels are zones rather than precise or guaranteed reversals. The article says the profile can help identify transitions from balance to imbalance, but also notes that confirmation signals are needed. It then describes an MQL5 implementation, including historical minute data, chart objects, and using an Expert Advisor to avoid slow recalculation when chart timeframes change. The discussion is explanatory and illustrative; it does not establish predictive performance through systematic testing.
Key ideas
- Market Profile represents trading activity across price levels to help assess balance and imbalance.
- The Point of Control identifies the price with the greatest activity in a profile and may act as an area of attraction.
- A Virgin POC is a prior control level that price has not revisited, though any reaction remains uncertain.
- Profile shapes can suggest changing market conditions, but the article recommends confirmation signals.
- The MQL5 implementation uses historical minute data and an Expert Advisor to manage recalculation.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.