Q-Profiler

When calculating a Volume (Heat Profile) we need to define the range and time period over which to calculate. In general we do this over the current session or a fixed number of bars. This tool goes a step further by allowing you to calculate not over a fixed period or session only but also:

1. Over a user defined number of trade cycles in terms of there length in time (bars) . From 1 – 8 cycles.
2. The range (High to Low) of any number of cycles. From 1 – 8 cycles.
3. Thus you can calculate over say the range of 8 cycles and the number of bars of 2 cycles. This way you can accurately define the window to calculate.

We also need to define the number of bins to divide the range in to. The number of bins are very important as it can change the estimation of the High Value Level, Low value Level and Point of control significantly.

Below we divide the range by 1 ATR , Thus we a use non – arbitrary number of bins. If the range = 50 ATR , then we will have 50 bins etc.

Below we manually set the number of bins to 50: As you can see setting it to ATR far improves the calculation in terms of trend changes and level identification.

Here we create the number of bins in terms of points. Thus 1 bin per 1 Point.

Below we define the number of bins by all the Significant Support and Resistance levels that were relevant during the period under review. We now have a smart way to define the Bins instead of just choosing an arbitrary number of bins our determination of the POC, HVL and LVL are far more accurate! These bins now represent SR levels and Heat zones that are very significant in the future.

We also define the Point of Control inside each bin that helps to pin-point the exact support/resistance level inside each bin.

As these bins / profiles can overlap and make your charts seem cluttered we have added a setting to determine how wide the bins plot in terms of number of bars. You can make them 5 bars big or larger.

*** The Bin Color is determined by the Delta of each bin.

We calculate and display the probability of the price reaching each of the 3 levels, POC, HVL and LVL. This is from below in an uptrend and from above in a downtrend.

The Value Area is where a defined percentage of all the volume / heat traded in a distribution. We have added a setting to customize the percentage. The default value is 68.2% in line with statistical rules. You are welcome to adjust this setting to your liking. The color of the Value Area rectangle is determined by the delta for that profile / distribution. This is also fully customizable.

Since Heat profiles give us the best info to determine support and resistance we use past and present POCs to create a grid of SR levels.

These levels are only added to the list if they meet a certain criteria and we remove these levels when the market proves that they are no longer valid.

The levels are projected upon every trend change or if the price exceeds the furthest level.

We also calculate the probability of the price reaching each of the 4 Support and 4 Resistance levels in each trend movement. This is extremely helpful in setting Profit Targets, calculating Risk reward etc.

Armed with all the levels, probabilities, HVL, LVL, POC and Micro – Structure we are able to determine much better trends. a Lot less false signals. a Lot less whipsawing. The Trend changes don’t aim to find the top or bottom of each cycle but rather when the market has decisively shown that it has changed direction. We will rather be late and be more certain of the move than get stopped out too often.

The dashboard gives us some quick and easy stats to determine our trading plan.

1. It starts by making a potential profit forecast based on the probabilities of the SR and other levels. This gives us the potential reward. This method is statistically far more sound than using X ATR or other methods as it builds on the probabilities we determine and learn from,
2. It calculates the risk by looking at the trailing SR level, the trend plot.
3. Finally, it calculates the Risk to Reward ratio. Reward / Risk.

We also calculate and display the probability of the target being reached in the trend cycle.

We calculate the probabilities of all the significant levels being reached in each trend cycle. We calculate it for all these levels :

1. Resistance Levels 1 – 4
2. Support Levels 1 – 4
3. Point of Control
4. High Value Level
5. Low Value Level
6. Long And Short Forecasts

Excellent for setting targets, entries and determining risk.

The Heat Profile also incorporates a signal that displays the Heat for the most recent cycle compared to the previous cycle when the trend flips.

Relative scaling: The widths of the rectangles are scaled against each other, so you instantly see which timeframe’s heat is dominant.

This indicator is fully customizable in terms of calculation methods, settings and visualization. There is a user manual included in the download that explains all of this fully.