Profile Flash Cards: Trading Balance
If You Insist
Are balance days tradeable? Let’s find out how.
Image 1. Time for a reverse card
In the history of Crowstack, I have shared one other lesson on trading balance. I generally avoid trading balance days as two-way trading simply is not that profitable for me. However I often will misread a day at first, recognizing balance only later.
And meanwhile I’m in a trade. Below are some tips - using the profile, of course!
Leveraging the Market Profile
Recall the study guide from CBOT. No sign-up necessary.
Image 2. Profile, profile
Firstly, this should be automatic. Let’s go through the day action and tell ourselves the ‘story’ of price action. At the end of the lesson, I’ll suggest a couple of reasonable trades using the 5m candle chart.
Remember, you don’t have to trade every day!
Friday, January 23
This is a classic ‘look below and fail’ of the previous day low.
Image 3. Friday expanded profile
Sellers were able to take out the buying tail base but lost all momentum below the PLOD. Typically we can expect a reversion to value / the mean, often a traverse of value, and sometimes continuation to further levels.
This is the trade I took, which I will share below.
Let’s look at the moment that my thesis switched to a balance day.