Wednesday, February 28, 2007

Markets In Profile: Profiting From The Auction Process - Book Review

Markets in Profile: Profiting from the Auction Process (Wiley Trading)

What Is It About?

This book is about learning how to analyze stocks using price, volume, and time. Covering all time frames, from scalper to long term investor, the book details how understanding the interrelation of all three factors is key to achieving market success. The book does this by focusing on the use of the Market Profile chart for analysis of stock prices across time, price and volume.

What Did I Get Out Of It As A New Investor?

The book provides an excellent description of how and why the various time frames interrelate and work in the stock market. Too often the forces of short and long term appear to the new investor as being at odds with each other. The reality is that both the short and long term time frames compliment each other and provide support to one another.

For the short term investor, the long term individual provides a value reference. For the long term investor, the short term investor provides the needed liquidity to realize the perceived value. This is a key point made in the book. Additionally, the book provokes thought in articulating the point that while not all day traders are long term investors, all long term investors are day traders. That is because on the day a long term investor enters or exits a trade they do so on a day trader time frame. Understanding this, and taken advantage of it, can be important in a fast moving market.

Overall, the book packs a lot of information into just under 200 pages. The book does a good job of using detailed charts to illustrated the examples given. While this may appeal to some, the true value of this book for investor and trader alike is an understanding of how to analyze the various time frames at work in the market in order to assist in the decision making process within ones own time frame.

The Good News

A solid resource for those wanting to understand how price, volume, and time interact within the stock market.

The Bad News

The book relies heavily on the Market Profile style of chart. For those unfamiliar with that system, some of the examples may prove confusing.

The Bottom Line

A good book for those already familiar with the Market Profile system. I would recommend first reading the author’s other book Mind over Markets: Power Trading With Market Generated Information which provides more of an introduction to the Market Profile system in order to fully appreciate the text.

Other Related Reading:


1 comment:


Two outstanding book reviews.