Market Profile Indicator Explained for MetaTrader 4 Traders
- Easy to use, highly effective, and free
- With the Market Profile indicator, you can simply explore where a “price change” is happening, with a very precise analysis for working with the chart and the most important price levels
- Useful for all markets (forex, commodities, stocks, indices, and others) and all timeframes, though the 30-minute frame is preferred
- Compatibility: MetaTrader 4
How to Use the Market Profile Indicator
The indicator is used to calculate the data of every move in the market. Based on that, the Market Profile indicator builds a chart that simply shows the levels and zones of trading activity, so you instantly know the most important price levels for future price moves in any market. See also our guide to Volume Profile Indicator.
Market Profile Indicator
Based on the market’s chart, you can easily identify the most important area for price movement and trading activity, and the highest statistical values represent the most important price levels in the market. You can simply plan your trades, or your stop-loss / profit targets, thanks to the Market Profile indicator. Combined with other tools, very powerful trading systems can be built.
When you attach the indicator to your chart on the MetaTrader 4 platform, you need to choose the time/price range that will be used to calculate the Market Profile indicator. The time range is the timeframe the indicator is attached to, and the price range can easily be controlled with the selection rectangle.
Every time you attach the Market Profile indicator to your chart, it creates a rectangle to highlight the price/time range used for the calculations. To resize it, use the rectangle’s midpoint (shown in the image below) and simply drag it left or right.
Once you move the rectangle’s midpoint, the indicator should update and resize the rectangle based on the price range you want to analyze. If that doesn’t happen, simply right-click on the chart and select “Refresh.”
Market Profile Indicator
Market Profile Indicator
It’s also recommended to set “Histogram: Max Resolution” to true, from the indicator’s settings when attaching it to the chart, to see the full range of the indicator’s calculations.
With the Market Profile indicator, you gain an important trading edge, since you’ll notice the most important price levels that other traders usually miss, and you’ll be able to easily identify the price levels where most of the price action takes place, and which price levels the market tends to revisit repeatedly.
The Market Profile indicator is available for MetaTrader 4 and 5, and it’s a classic implementation of market profile that can show price density over time and identify the most important price levels, the value area, and the point of control for a given trading session.
The Market Profile indicator can be attached on timeframes from M1 up to D1, where it will display a profile for daily, weekly, or monthly sessions, or even intraday.
Different timeframes give higher precision when using the Market Profile indicator; higher timeframes are recommended for a clearer view, and it’s also possible to use the free-drawing rectangle to build a custom market profile on any timeframe.
Six different color schemes are available for plotting price blocks, and it’s also possible to plot the profiles as a plain colored histogram. You can also choose to color the chart with the Market Profile indicator based on up and down bars, since this indicator relies on exposed price action and doesn’t use any standard MetaTrader indicators.
Disclaimer: This article is for educational purposes only and is not investment advice. Trading forex, commodities, and CFDs involves substantial risk, including leveraged positions, and you can lose more than your initial deposit. This page contains affiliate links; we may earn a commission if you sign up through them, at no extra cost to you.
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