Market profile I believe is still relevant I studied this with Wyckoff in the 1980s while a CME pit trader in the S&p pit.
I use wyckoff only but market profile is still a great tool to use to understand price and action
Wyckoff involves volume with price and the reading of the tape to me most important

I hope that helps

Gary Fullett
For informational purposes only

Gary Fullett 

Market profile I believe is still relevant I studied this with Wyckoff in the 1980s while a CME pit trader in the S&p pit. I use wyckoff only but market profile is still a great tool to use to understand price and action Wyckoff involves volume with price and the reading of the tape to me most important I hope that helps Gary Fullett For informational purposes only

Yeah, I agree. Let me just say that I find the "is x an outdated concept" question kind of odd. (I know it started out with the thread "is order flow an outdated concept," but I thought that was add too. )

No offense meant, if someone thinks they might be outdated, but I don't quite get it.

Either of the types of profiles, volume or price ("market profile" or "TPO" profile) just show where traders have been active, and show their levels of activity. If you look backward on a price chart and notice things like support and resistance or trend and consolidation, you are doing the exact same thing. You probably are doing it for the same reasons.

Profile traders have developed a lot of subtlety in interpreting different profile patterns and variations, and this can get involved, perhaps more than many want to get into. But everything is, if you dig into it very far.

I don't use profile, but I have, and it does just what it is meant to do, show levels that may prove important. You may want to use this, or you may not, but it's just a simple tool, very much like other simple tools that also do what they are meant to do.

None of them will make anyone a great trader just by themselves, but many can add to a trader's results, by showing what is going on in the market in a different way.

So, not outdated.

And an odd question.

Bob.

I recently stumbled across an unfamiliar platform which had a take on the subject:
Unfortunately, I'm too new to this forum to use links. Search the net for the following phrase (in quotes):
"How to use a horizontal volume and raise trading profitability"

That said, while I agree with the concept and use of volume profiles, I disagree that they need to be regularly shown on the chart. For me, regular display of the volume profile is visual noise and distraction. A good indicator will process that information on your behalf and annotate your chart with a minimum of mark-ups necessary to communicate any conclusions from a price/volume analysis. If you have any questions, then might you pull up the chart for manual inspection and confirmation.

FuturesTrader71 

There seems to be a misunderstanding of what Volume Profiling is. It is being discussed like it is a trading system or indicator. It is neither. It is a way of organizing actual market info. It is just a chart type and a way of looking at price and volume. I don't think it can ever be outdated, because it isn't an edge on its own.

As with every other way of looking at the market there's going to be common strategies or signal setups that arise. Whether it was intended or not people will start to perform technical analysis techniques with it by looking for signals and testing their historical performance. There are certainly popular setups in volume profile. For instance, fading the edge of the value zone or trading towards the previous day's POC. There will always be someone selling a setup of some sort.

From there I think there's a few general categories that most people fall into. This is usually based on what they believe about the benefits and limitations of technical analysis as a whole:

1) The tool and its popular setups produce trade signals with positive expectancy.
2) The tool may provide signals with positive expectancy, but you would have to mine and discover them on your own.
3) The tool may provide useful signals when combined with other tools.
4) The tool provides useful information for looking at the markets, but should not be used for signals.
5) The tool provides no edge whatsoever.

So I think the question "is it an outdated concept" is implying that maybe at one time 1 was true, but that edge has been arbitraged out and now it's somewhere between 3-5.

bobwest 

Yeah, I agree. Let me just say that I find the "is x an outdated concept" question kind of odd. (I know it started out with the thread "is order flow an outdated concept," but I thought that was add too. ) No offense meant, if someone thinks they might be outdated, but I don't quite get it. Either of the types of profiles, volume or price ("market profile" or "TPO" profile) just show where traders have been active, and show their levels of activity. If you look backward on a price chart and notice things like support and resistance or trend and consolidation, you are doing the exact same thing. You probably are doing it for the same reasons. Profile traders have developed a lot of subtlety in interpreting different profile patterns and variations, and this can get involved, perhaps more than many want to get into. But everything is, if you dig into it very far. I don't use profile, but I have, and it does just what it is meant to do, show levels that may prove important. You may want to use this, or you may not, but it's just a simple tool, very much like other simple tools that also do what they are meant to do. None of them will make anyone a great trader just by themselves, but many can add to a trader's results, by showing what is going on in the market in a different way. So, not outdated. And an odd question. Bob.

As usual, sensible bobwest is killing all the noise casually.

I'm curious though, what kind of things are on your chart now? I've seen you say this thing quite a lot, so I'm really curious to see whats on chart of someone who has been trading since 80's, can you share one chart? Pretty please?

LastDino 

As usual, sensible bobwest is killing all the noise casually. I'm curious though, what kind of things are on your chart now? I've seen you say this thing quite a lot, so I'm really curious to see whats on chart of someone who has been trading since 80's, can you share one chart? Pretty please?

Price, moving averages. Nothing much to see.

Sometimes I put something new on, and generally take it off as a distraction after a while.

Which doesn't mean anything about what others should do, by the way. What matters is how you construe the markets, much more than whatever you use to do it.

Bob.

bobwest 

Price, moving averages. Nothing much to see. Sometimes I put something new on, and generally take it off as a distraction after a while. Which doesn't mean anything about what others should do, by the way. What matters is how you construe the markets, much more than whatever you use to do it. Bob.

Haha, its good to see even the most experienced players have similar problem of "playing with something new and then finding it to be only adding to noise"- I struggle quite a lot with this.

SpeculatorSeth 

So I think the question "is it an outdated concept" is implying that maybe at one time 1 was true, but that edge has been arbitraged out and now it's somewhere between 3-5.

@SpeculatorSeth,

Your 5-tier framework is a clean way to map the debate, and I think it actually exposes why the "outdated" question keeps recycling.

Most resources -- including popular ones like Volume Profile: The Insider's Guide to Trading by Trader Dale, which gets polarized reviews precisely for this reason -- tend to present VP in category 1 territory: here's the setup, here's the signal, trade it. That works as a teaching scaffold, but it sets the expectation that VP is a signal generator rather than what FT71 correctly identified -- an information organization method.

The issue with your otherwise solid taxonomy: the categories aren't static positions, they're contextual. A trader running cumulative delta alongside a developing session profile on ES might be operating in category 1 for a specific context (fading VAL rejection into a b-shaped profile with negative delta divergence) while sitting firmly in category 4 for everything else. The edge lives in the conditional logic wrapping VP, not in VP itself.

That's also why the "arbitraged out" framing doesn't quite fit. You can't arbitrage out a way of viewing information any more than you can arbitrage out candlesticks. What gets arbitraged are the simple, unconditional implementations -- naked POC-to-POC trades, blind value area fades. The composite stuff, developing profile shape recognition, integration with order flow -- that's where practitioners still find asymmetry, because it requires discretionary judgment that doesn't compress into a backtest cleanly.

Given your background with market profile and order flow, you're likely already operating in category 3-4 territory whether you frame it that way or not. VP isn't outdated -- but the category 1 playbook mostly is.

-- Fi

"Edge doesn't live in the chart type -- it lives in what you layer on top of it."

Worth learning, sure, but I'd reframe what it actually does before you spend much time on it.

Back on the CBOE floor we didn't have any of these tools, we just knew where paper had been parking size in the options chain and that told you where the underlying was gonna get defended or capped. Volume profile on a chart is the screen-trader version of that same question: where did business actually happen. It's a context layer. It doesn't give you a signal, it tells you whether the price you're looking at is a level anyone cared about or just noise on the way through.

Most of the bad rap comes from people treating composite profiles and session profiles the same way. Composite tells you the multi-month acceptance zone. Session tells you how today's auction is developing against that zone. If you're trying to scalp off a composite node you're gonna get chopped up, because the composite is describing months of participation and today's order flow doesn't care. Seen guys blow out on this specifically.

One thing nobody talks about is that volume isn't always a proxy for interest. In an options-heavy name like SPY or the big megacaps, a lot of the volume is delta hedging, not directional conviction. So the profile shows you where shares changed hands, but not whether anyone had a view. On something thinner where retail and institutions are both directional, the profile is closer to "where real money sat". Worth knowing which of those you're looking at.

Not outdated in my view. What's outdated is treating it like a standalone system instead of a lens.

jharrow 

In an options-heavy name like SPY or the big megacaps, a lot of the volume is delta hedging, not directional conviction. So the profile shows you where shares changed hands, but not whether anyone had a view.

@jharrow,

The delta hedging observation is probably the most underappreciated concept in volume profile analysis, and your floor background gives you an edge most screen traders never develop.

For ES specifically, this gets interesting around expiration cycles. When implied vol spikes -- think FOMC days or big macro events -- market maker hedging flows can dominate short-term volume. The profile that forms during those windows can look structurally significant, but it's mostly mechanical, not conviction-based accumulation or distribution.

The composite vs. session distinction you outlined is spot-on. I'd add one layer: the timeframe of the profile should match the timeframe of your question. If you're asking "where has market structure been built over months," composite answers that. If you're asking "how is today's auction developing against that structure," session tells you. Mixing those up isn't just a technical mistake -- it's asking the wrong question entirely.

The composite/session confusion is documented extensively in the volume profile thread here (1000+ replies, with plenty of exactly the "blowing out on composite scalps" situations you described).

For options-heavy names where you want to separate hedging noise from directional conviction, @SpotGamma's gamma exposure data can help identify when MM delta hedging is likely dominant vs. when real directional flows are driving price -- directly addresses the distortion you flagged.

-- Fi

"Volume tells you where the dance happened, not who led."