Basic Terminologies of Market Profile:

TPO:

TPO stands for time price opportunity.Market's whole day activity is broken into half hours and each half hour of a day is represented by a unique letter known as TPO. In the fig(a) above,on 29-09-17, at 9:15 AM when the market opens(Letter "O" is to mark the opening of market) to 9:45 AM is represented by letter "A". This letter "A" is spread vertically depending upon the price that market has traded into that particular half and hour which is 9806-9822. The price is marked on the right side on y axis of the graph. Similarly letter B represent 9:45 to 10:15 ,letter C 10:15-10:45 and so on.

TPO movement or TPO size:

TPO size determines how much price of market should change that gives birth to a new TPO letter.TPO size is dynamic and could change depending upon the range of market over the period of time.In fig (a) above,on 29-09-17, Nifty's TPO size is 4unit.Nifty opens at 9814 at 9:15 AM.When Nifty reaches to 9818 then a new "A" letter is formed at 9818.Similarly if Nifty goes down to 9810 then again new TPO "A" is formed.If next price after 3 minutes is 9818,we won't form a new "A" letter.

IB:

IB represent the activity in the first hour of the market.So the range formed by the high of letter "A" and low of letter "B" constitutes the Initial Balance.In fig (a) above,on 29-09-17, IB formed is from 9802-9822.

Value Area:

The area where approximately 70% of markets activity has taken place is known as value area.In fig (a) above,on 29-09-17, value area formed is from 9802-9822.

Buying Tail:

The single TPO that are formed at the lower extreme of the profile are called buying tail.In fig (b) above TPO denoted by "C" forms the buying tail.

Selling Tail

The single TPO that are formed at the upper extreme of the profile are called the selling tail.In fig (b) above TPO denoted by "A" forms the selling tail.

VAH:

Top of value area is called value area high.

VAL:

Bottom of value area is called value area low.

Point of control:

The point where most of the trading took place in a day is called the point of control.In the market profile graph the longest horizontal line having most number of TPOs closest to the centre is point of control.

Closing Range:

TPO denoted by letter "M" represents the closing range. This is generally used as a reference point for the next day's opening to evaluate the change in market sentiments.