TradersLibrary2 - anatomy of a volume profile trader

knew exactly what the market would do at the exact right time. The problem
with this is that when you trade by the seat of your pants you are at the whim of
your emotions. A trader under the influence of such physiological stress response
can easily trade his account into a deep hole very quickly.
Peter L. Brandt, a well known Technical Trader says, “A trader is nothing more
than a glorified order enterer”. This I agree with 100%. A trader should have
checklists and systems in place to narrow down specific trade setups which will
be executed and monitored according to a specific trading plan.
You will need the following in order to trade objectively and without
psychological and physiological influences.
1. A robust trade identification method.
2. Repeatable system and checklist for scanning, entering and managing
trades.
3. Pre-defined failsafes in place for unknown events.
We will briefly unpack these three items. You will want to take out a sheet of
paper and create a worksheet that fits you. Remember, if it's not on paper it
doesn't exist. Your plan should be made as if it were to be handed off to a trader
on your staff which is trading your personal capital. It needs to be easily
understood in plain language and with no room for alteration or circumstantial
justification.
A Robust Trade Identification Method
The general purpose of this book was to arm you with a trade identification
method for understanding when the market is balanced, or imbalanced. The
market goes from balance (consolidation) to imbalance (trending). The volume
profile along with the 3 types of profiles clearly show what stage the market is in
for your current timeframe.
Once you have come up with a directional bias for the contracts to trade it is