Market profile guidelines and trading balance

To participate in the market successfully, I've devised a set of guidelines. They're not absolute, but they are absolutely necessary for me to be consistent. As a discretionary trader I have an advantage over an algorithm: I can analyse real-time data better and process new information more quickly. The disadvantages are mainly to do with consistency, and having these loose rules helps close that gap.

In this article I'll go over the fundamental principles that guide my day-to-day trading. They're not overly complicated, and that matters too: the simpler the process, the faster the decision-making in real time, without hesitation. Hesitation is a major cause of FOMO, so let's dive into my rules.

Just a reminder: I'm a market profile trader first, so most of these rules revolve around concepts like balance. Hence the name, The Balanced Trader.

The general rule is to go with the breakout of balance. There is a failure of opposing forces to defend key markers.

A break to the upside (look above and go): you want to be a buyer.

A break to the downside (look below and go): you want to be a seller.

If you miss the initial move, look for a retest of the break. This is often a safer entry.

Lack of continuation (failed breakout / look above or below and fail): you want to fade and target the other side of balance. Acceptance, and a retest of the re-entry into balance, is a good location to trade.

• Trading without guidelines. Without them it would be impossible to benchmark, monitor, refine and tweak my behaviour. This is a common mistake among new traders, and putting guidelines in place is one of the most important steps they can take to become consistently profitable.
• Pre-empting at the extremes. It's very risky and a low-payout trade. Pre-empt the lower TF by identifying HTF setups.

I hope you find this article interesting. If you'd like to learn more about trading with market profile and footprint, visit me on YouTube, where I trade live most days. In my next article I'll outline some more process guidelines, on spike rules.