The Best Futures Trading Method is Rooted in Volume Profile Methodology:
In my experience, the best futures trading method is one rooted in auction market theory and volume profile analysis.
These are terms/concepts that you might not have heard of before – and if you have, you probably wrote them off because you didn’t understand them. But I highly suggest giving them a real chance because they’ve completely changed the game for me.
Just like many other retail traders, I started off attempting to blindly copy guru alerts/signals – which, of course, didn’t work. Then I moved on to testing my own approach with all kinds of popular indicators – moving averages, RSI, MACD, Fibonacci levels, etc.
But yet again, the results weren’t very good. Sometimes the indicators worked, but most times they didn’t – and it never felt like any of them on their own offered any real edge. Using them didn’t make market movement seem any less random/confusing/chaotic.
But when I came across auction market theory and profiling – and actually took the time to deeply understand them – everything changed. The clarity they provide is unmatched – and it’s honestly cringe-worthy to think about the old ways I used to trade.
It just makes sense – and actually works. And I know it sounds kind of silly to say, but it’s like having x-ray market vision.
Why Does Volume Profile Work – What Does Volume Profile Actually Tell You?
Volume profile is a powerful distribution graphic that displays interest/participation at specific prices.
Reading that sentence probably didn’t feel earth-shattering, but being able to accurately view the participation of market participants at certain prices in real-time is extremely significant. It sounds so basic, but participation is what moves markets.
I know most of you are probably thinking: “I already track volume on my charts”. But if you’re not using volume profile, you’re missing out on critical market-generated information that no other trading tool can provide (except maybe market profile).
The conventional way to track volume is at the bottom of a chart on a bar-by-bar or candle-by-candle basis. But this view of volume doesn’t really tell you all that much. Using volume profile, on the other hand, distinctly exposes the “quality” of price.
The reality is that not all prices are created equal. Certain prices are much weaker/stronger than others – and volume profile provides these key contextual insights. Trading without volume profile – in my opinion – is essentially like trading blind.
Lagging indicators provide limited to no edge. Building competence and skill around volume profile is the ideal road to go down.
The Volume Profile Method With Aaron Korbs at Tradacc – What is the Profile Method?
One mentor and approach to trading futures that has had a substantial impact on me is Aaron Korbs and his Profile Method.
Aaron Korbs is the founder of Tradacc (short for “Trading Accelerator”) – which is a trading education platform that offers 2 main courses/programs: Volume Profile Formula (introductory course) and Profile Method (next-level training/mentorship program).
The best analogy I can use for this is that Volume Profile Formula is like the preview/trailer and Profile Method is the full-blown movie. They both cover his volume profile methodology, but Profile Method is far more nuanced/detailed/exhaustive.
From Aaron Korbs’ YouTube channel all the way up through his advanced coaching program, he actually puts traders on a winning path. I firmly believe that the best way to observe/analyze markets and execute within them is through the lens of volume profile.
Most online trading education doesn’t offer much more than definitions/terminology and basic information in regard to technical analysis (what a candlestick is, what a trend is, etc.). But Aaron Korbs’ Profile Method is an effective, comprehensive approach.
So if you’re looking for a futures trading method/system that actually works – it doesn’t get much better than Profile Method.
Written by Matt Thomas (@MattThomasTP)
- What is Volume Profile – Trading With Volume Profile
- What is Tradacc Trading For Beginners – My Personal Take
- Volume Profile Formula Review – What is Volume Profile Formula?
- 3 Free Ways to Learn From Josh Schuler at Trade With Profile
- Molding Your Market Framework – How Do You View Markets?
Thanks for this great article on the volume profile. I do a little bit of investing and use the VPVR on TradingView sometimes. I am not a short-term trader but in terms of dollar cost average buying this is still very useful to know. I watched your video also and this was very helpful and as you say “trading without it is like trading blind”. Thanks for the great reminder of this powerful histogram.
Hi John – thanks for sharing your experiences with volume profile.
You make a critical point that volume profile isn’t just applicable to short-term trading – it can be applied to long-term investing as well. When trading intraday, for example, I view weekly and monthly profiles for context, but I’m actively watching/executing within the developing daily profile. For longer-term investing, the “view” you choose can simply be expanded to monthly and yearly composite profiles in order to capture a higher timeframe perspective. This is the power of volume profile – it provides context for the market narrative in all timeframes.