What is Market Profile? Steidlmayer, the CBOT and the auction

Market Profile was developed in the 1980s by J. Peter Steidlmayer, a trader at the Chicago Board of Trade (CBOT), and the exchange introduced it to the public in 1985. Its premise is that a market is an auction: price moves up to find sellers and down to find buyers, and the prices where it spends the most time are the ones both sides currently accept as fair, which Steidlmayer called value.

The construction is simple. Split the session into 30-minute periods and label them A, B, C and so on. In each period, print that period’s letter at every price row it traded. Then slide all the letters in each row to the left. What remains is a sideways histogram of time at price, as the figure below shows with six periods.

Because it counts time rather than volume, a price the market visited in many periods builds a long row, while a price crossed once in a fast move gets a single letter. That difference, between accepted and rejected prices, is the core of the reading.

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On the left, six columns of letters A to F, one per half-hour period, each printed at the prices it traded between 5,010 and 5,024. An arrow labeled slide the letters left points to the profile on the right, where each row lists its letters side by side; the longest row, 5,018 with A, B, C, D and F, is outlined and labeled POC 5,018.

TPO, value area and point of control explained

Each letter in the profile is one TPO: one period that traded at one price. Counting them turns the shape into numbers. In the hypothetical session at the top of the page, 13 periods (A to M, a 9:30 a.m. to 4:00 p.m. session) printed 71 TPOs across 17 rows of 2 points each.

The point of control is the row with the most TPOs: 5,016, with 9. The value area starts there and adds the busier neighboring rows until it holds about 70% of all TPOs: here 50 of 71, from 5,010 to 5,022. The 70% comes from the normal distribution, where roughly 68% of observations fall within one standard deviation of the middle; it is a convention, and platforms let you change it. Platforms also add rows slightly differently, one or two at a time, so two charts can show value-area edges a row apart.

TPO (time price opportunity)
One letter or block in the profile: a single period that traded at a single price.
Point of control (POC)
The price row with the most TPOs, where the market spent the most time.
Value area (VA)
The range around the POC that holds about 70% of the session’s TPOs.
Value area high and low (VAH, VAL)
The top and bottom edges of the value area, used as reference levels in the next session.
Initial balance (IB)
The range of the first hour: periods A and B in a 30-minute profile.
Range extension
Any trading beyond the initial balance later in the session.

Initial balance and range extension

The initial balance is the range of the first hour, the A and B periods. In Dalton’s reading, the first hour is dominated by short-term traders, so its width and what happens at its edges show how much conviction longer-term participants bring later in the day.

A wide initial balance often means much of the day’s range is already set, and the session rotates inside it. A narrow one leaves room, and a break beyond it, called range extension, shows that someone with a longer horizon is willing to trade at new prices. Extension on one side signals directional conviction; extension on both sides signals a two-sided fight.

Judge the IB against its own recent history, not against a fixed number: keep the last 20 initial balances in a table and call today’s narrow or wide relative to their average.

In the session at the top, the IB runs from 5,008 to 5,022, 14 points. Period C extended the range up and D reached 5,032; later, periods I, J and K extended it down to 5,000. Extension on both sides with a close near the middle is the neutral day described next.

Market Profile day types: normal, trend, double distribution, neutral

Profile traders, and later James Dalton in Mind Over Markets (written with Eric Jones and Robert Dalton), sort sessions into a few day types by the width of the initial balance and the range extension that follows. The label is only final at the close, but recognizing which one is forming during the day tells you whether to expect rotation or follow-through.

Use day types as a description of who was active, not as a forecast. A session can start like a normal variation day and turn into a trend day after lunch; the profile only tells you what has happened so far.

  • Normal day: a wide initial balance that contains most of the day, with little or no range extension. Longer-term participants mostly stayed out.
  • Normal variation day: a moderate IB and range extension on one side, often to about twice the IB width.
  • Trend day: a narrow IB, then steady extension in one direction, a thin elongated profile and a close near the extreme. Fading it is the costly mistake.
  • Double distribution day: two separate areas of value joined by single prints, after a fast move in one or two periods leaves the first balance behind. The single prints often act as a reference later.
  • Neutral day: range extension on both sides of the IB. A close near the middle (neutral center) shows balance; a close near one extreme (neutral extreme) shows who won late in the day.
  • Non-trend day: a narrow IB and almost no extension, a small compact profile, often before a holiday or a major report.

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Six small profiles side by side, each with a bracket marking its initial balance: normal (a wide IB, little extension), normal variation (extension on one side), trend (a narrow IB at the top and a long thin profile closing at the extreme), double distribution (two areas joined by single prints), neutral (extension on both sides) and non-trend (a narrow, compact range).

Single prints, poor highs and lows, and excess

Single prints are rows with only one TPO, left by a fast move in a single period. Inside the profile, between two distributions, they mark prices the market crossed without doing business there. Traders watch them as references: price that comes back often either moves through them quickly again or stalls at their edge.

At the extreme of the day, a run of single prints is called a tail, or excess, and it is a sign of a finished auction: price probed, met strong opposite interest and left fast. In the session at the top, D’s single prints from 5,028 to 5,032 are excess at the high, and K’s prints at 5,000 to 5,002 are excess at the low.

A poor high or poor low is the opposite: a flat extreme with two or more TPOs on the top or bottom row and no tail. It suggests the auction stopped without a clear rejection, and many profile traders treat it as unfinished business that price may revisit. TradingView’s TPO indicator can mark single prints and poor highs and lows as key levels. Treat all of these as places to look, not as orders.

Open types: how the first minutes frame the day

Dalton also classified the open by how price behaves around the opening price in the first minutes, as a first read on the day’s conviction. His four types are listed and drawn below.

Combine the open type with where the open sits relative to yesterday’s value area: an open-drive from above yesterday’s VAH is a very different day from an open-auction inside value.

  • Open-drive: price moves decisively away from the open and does not trade back to it. The strongest conviction; fading it is dangerous.
  • Open-test-drive: price first tests a nearby reference, such as the prior high or the edge of value, finds no business there, then drives in the opposite direction.
  • Open-rejection-reverse: price moves one way, meets strong opposite activity and trades back through the open. Conviction is weaker, and the day often rotates.
  • Open-auction: price rotates around the open with no clear direction. Inside the prior day’s value area this points to balance; outside it, to a test of whether the new prices are accepted.

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Four small price paths around a dashed line marking the open: open-drive (straight away from the open), open-test-drive (a dip to a dotted reference line, then a drive up), open-rejection-reverse (a rally rejected at a dotted reference line, then a fall back through the open) and open-auction (back and forth around the open).

How to use Market Profile for context and levels: a worked session

Market Profile works best as a map prepared before the open: yesterday’s value area and POC, any single prints or poor highs and lows, and longer-term levels from weekly or composite profiles. The trade itself still needs a trigger, a stop and a size, as in any trading plan, and the levels work like any support and resistance: they fail often.

Hypothetical: treat the session at the top of the page as yesterday on an index future, so VAH 5,022, POC 5,016, VAL 5,010 and excess at 5,028 to 5,032. Today opens at 5,026, above yesterday’s value. Period A trades 5,024 to 5,030, and B dips to 5,022, touches yesterday’s VAH and holds: an open-test-drive above value, with an initial balance of 5,022 to 5,030, narrow next to yesterday’s 14 points.

Period C breaks above the IB to 5,036, a range extension that says buyers accept higher prices. The plan is to buy a pullback toward the IB high. D dips to 5,031 and the 30-minute bar closes back up at 5,034; you buy at 5,034 with the stop at 5,019, below yesterday’s VAH, where the idea of acceptance above value would be wrong (15 points). With a Micro E-mini contract at $5 per point, that is $75 of risk per contract plus fees, so a $150 risk budget allows two contracts. The target is the next reference above, a poor high from earlier in the week at 5,064, 30 points away: 2R.

The failure branch: if price instead falls back below 5,022 and two consecutive periods close inside yesterday’s value, the move above value has been rejected. The stop limits the loss, and yesterday’s POC at 5,016 becomes the more likely magnet. Either way, write down the result in R and the day type at the close.

Market Profile on TradingView: the TPO indicators and plans

TradingView added built-in TPO indicators in February 2024: TPO, which builds profiles for fixed periods such as a day, a week or a month, and Session TPO, which splits each day into the sessions you define. Both sit in the Technicals section of the Indicators menu, under Profiles. The help center notes that the TPO indicator is also called market profile; it draws the TPO profile to the left of each period, with an optional volume profile on the right.

In the settings you choose the block size (from 5 minutes to 4 hours; 30 minutes is the classic choice), the row size and the value area percentage, 70% by default. Letters run A to Z, then a to z. Key levels such as the POC, VAH and VAL, the initial balance range, single prints and poor highs and lows can be shown, and you can split one profile or merge several into a composite.

TradingView’s pricing page, checked in October 2026, lists Time Price Opportunities on the Premium and Ultimate plans, not on Basic, Essential or Plus, while the Volume Profile indicators start from Essential. Plans change, so check before you subscribe. Our best TradingView indicators guide covers what else is worth adding.

Market Profile vs volume profile, and common mistakes

Both build a sideways distribution with a POC and a value area, but Market Profile counts time, one TPO per period at each price, while volume profile counts traded volume. On many days the two POCs sit close together. When they differ, the gap tells you something: a price where the market spent hours on thin volume is not the same as one where heavy volume traded in minutes. Many traders read the TPO profile for structure and day type, and volume, VWAP or order flow for where size actually traded. The common mistakes are listed below.

  • Treating the value area edges or the POC as automatic entries. They are references; the trigger still comes from price behavior and a closed bar.
  • Labeling the day type too early. A normal day at 11:00 can become a trend day at 14:00; let range extension tell you.
  • Mixing sessions. Profiles built on 24-hour futures data look different from regular-hours profiles, as pre-market trading shows. Choose one and keep it.
  • Ignoring the higher timeframe. A daily balance can sit inside a weekly trend; weekly and composite profiles keep that in view, as in multi-timeframe analysis.
  • Applying it to thin markets. With few participants, time at a price says little about value.
  • Fading a trend day because price looks stretched. On trend days value moves all session, and yesterday’s value edges stop mattering.