Lesson 06
Market Profile, TPOs and the initial balance
Market Profile is the time version of the volume profile. Every 30-minute period gets a letter, and the letter is printed at every price that period traded. Stack them and you can see where the market spent its time.
In one lineThe first hour sets the initial balance. What price does with its edges tells you who is in control.
Reading the letters
- TPO (time price opportunity) is one letter at one price. More letters at a price means more time spent there.
- Initial balance (IB). The range of the first hour of the cash session, periods A and B (09:30 to 10:30 ET).
- Range extension. Trading beyond the IB later in the day. It shows the longer timeframe stepping in on that side.
- Single prints. Prices with only one letter: the market passed through fast, usually in a strong move.
Periods A and B (bold) set the IB. Later periods extend the range up; F passes 21,060 to 21,070 alone, leaving single prints, and value then builds higher. Illustration from simulated prices, not a real session.
Ends of the day: excess and poor highs
- Excess is a tail of single prints at an extreme. The auction found a price nobody wanted and left fast. That end is usually finished.
- A poor high or low is a flat end with several letters at the same extreme. The auction stopped without a clean rejection, so that end is often revisited.
Key terms
TPOOne letter for one 30-minute period at one price.
Initial balanceThe first hour's range, 09:30 to 10:30 ET.
ExcessA tail of single prints at an extreme: a finished end.
Poor high / lowA flat extreme with several letters: an unfinished end.
Try it
At 10:30 ET, mark the IB high and low. Note which side gets extended first, and whether price holds outside the IB or comes back in.
AXIS Desk · AMT Fundamentals · free. Education only, not trade advice. Futures trading involves substantial risk of loss; past patterns do not guarantee future results.