Market Profile: Beyond the Basics

Practical Excercise II

1. the ES mini thirty minute chart below has Level I and Level II KVT markers, based on the location of
those markers where would you expect prices to move up or down? justify your answer.

How many level I and Level I markers are there? is there overlap in prices where markers appear?what is
the significance of that?
2. On the chart below the red line is the 50 SMA , the blue line is the 20 SMA and the light green line
represents the 5 SMA. This thirty minute chart has a number of KVT markers, the dark green dot
represent Level II and light green dot represents a Level I KVT price level.

a. What is the difference between a level I and a Level II KVT price level?

b. What does it mean when several KVT markers appear within the same bar?

c. Where would you expect prices to go from the close of the last candle on the chart?
3. The ES Mini thirty minute footprint chart below includes both KVT markers and volume filter
indicators. The blue dot is produced when traded volume exceeds 8000 contracts and the red do
appears when traded volume exceeds 15,000 contracts. The light green dot is a Level KVT marker. The
blue line is the 20 SMA and the light green line is the 5 SMA.

a. In the chart above is momentum to the upside? why ?

b. What does the presence of many blue dots in the past four candles tell us about order flow and
market activity?

c. Would you expect prices to move higher or lower after the close of the last thirty minute period on
the chart? explain your answer.
4. The ES Mini thirty minute footprint chart below includes both KVT markers and volume filter
indicators. The blue dot is produced when traded volume exceeds 8000 contracts and the red do
appears when traded volume exceeds 15,000 contracts. The light green dot is a Level KVT marker. The
red line is the 50 SMA, the blue line is the 20 SMA and the light green line is the 5 SMA.

a. What is the direction of the trend this chart? how was that determined?

b. The last four candlesticks represent the first two hours of a trading day, what information do these
candlesticks provide us about potential price direction?

c. The positive candle that closed prior to the last candlestick had a strong volume imbalance to the
upside, yet the following candle took prices lower. How would you explain that ?

d. Where do you think prices will go from here ?

5. The footprint chart below displays the full 24 hour trading day for March 14, 2014 and the lower
portion of the preceding 24 hour trading day. Each of the footprints has a hollogram volume profile in
the background below the data.

a. What is the extent of the imbalance at the value area high and the value area low for Friday?

b. Where is the greatest imbalance on the footprint for Friday? why is this significant?

c. Given that Friday closed lower, would you expect more volume imbalances to the downside or
upside? what is the difference in count between the positive and negative imbalances?