Daniel Hennis

Auction Context – Market Profile as Your Map Before you think about placing a trade, you want to know where in the auction cycle the market is. Market Profile gives you the structure that most traders don’t see when they’re staring at candlesticks. 5 Core Concepts to Track: 1. Value Area High (VAH) / Value Area Low (VAL) Defines the 70% of the session’s volume where most business was done. Outside of value = “expensive” or “cheap” to the market participants. 2. Point of Control (POC) Price with the most activity = a magnet in balance conditions. 3. Main Day Type Recognition (there are others) 3.1 Balanced -> Mean reversion more likely. 3.2Trend Day -> Initiative activity dominates which means profile elongates in one direction. 3.3 Double Distribution → Two distinct value zones; mid-point acts as a pivot. 4. Structural References Single prints, low-volume nodes (LVNs) and (HVNs), poor highs/lows, unfinished auctions, each can act as magnets or barriers. 5. Why this matters: Knowing the auction context lets you pre-define where business is likely to occur and where rejections are probable = which stops you from chasing every micro move. NOW ONTO GAME PLAN: Auction context feeds into your game plan. You’re answering the following: “Am I a buyer, seller, or observer today?” “Where is my line in the sand?” Premarket Prep Routine: - Mark prior session VAH, VAL, POC. - Mark overnight high/low and see how they relate to prior value. - Note anomalies (e.g., single prints) that could be filled. Decide if you’re looking for: Initiative trades (price driving away from value) ? Responsive trades (price returning to value) ? Bias Examples: Open above VAH + holding → Look for longs if order flow supports continuation. Open inside prior value → Fade moves to VAH or VAL unless initiative order flow breaks out. Mindset: You should be able to write your bias in one sentence before the open. If you can’t, you’re not ready to trade. Anyway just my 1 cent whilst Im watching a trade develop - cheers