Time Price Opportunity

The Time Price Opportunity (TPO) study depicts market activity through the use of time and price (sometimes known as Market Profile). TPO Profile (also known as market profile) is comparable to volume profile. Time-Price-Opportunity (TPO) depicts the price distribution over a particular time period and highlights the levels where the price has spent the most time. TPO profiles are commonly used in conjunction with volume profiles to detect regions of support and resistance.

What is Time Price Opportunity?

It serves as the beginning point for generating market profiles and graphically displays the market as distinct auctions allow trading to have a more dynamic and current image of value perception in the absence of any other information. Simply said, Time Price Opportunity indicates that time regulates pricing, creating opportunity. Market Profile is another name for this notion. Created in the 1960s by Peter Steidlmayer for Dealers on the Chicago Board of Trade to have an easier graphic depiction. It is a popular professional tool among professional traders and many professional platforms are supported. The CME and other futures exchanges support this trading strategy.

TPO Study Overlay Example on S&P Mini Futures Contract
TPO Study Overlay Example on S&P Mini Futures Contract

General Settings of the TPO

The “General” tab contains basic setup settings.

  • Timeframe – The standard timeframe for a TPO study is one day, although there are other alternatives, such as intra-day values and weekly/monthly bar sizes. The time frame specifies the tick data range (start/end times) for each TPO graph. A one-day time period, for example, would begin at the start of the trading day and end at the end of the trading day (defined in the trading hours).
  • Tick Interval – This specifies the price range for each row in the TPO graph. A tick interval of one will generate a row for each price. A tick interval of 4 in the instance of the S&P mini futures contract will display a row for every point of price movement because the minimum tick is one quarter point (ie: 0.25). When trading an instrument with a broad range of movement (very volatile) or a very small minimum tick value relative to its average range, the tick interval can be quite useful (such as FOREX or high value stocks).
  • Sub Interval – This specifies the length (in time) of each cell in the TPO chart. This is usually set at 30 minutes on a daily chart. Each cell in this scenario covers 30 minutes of trade activity at the particular price interval. If 1 or more trades occurred for that price interval in that slice of time, a cell is drawn at that price interval.
  • Number of TPOs – You could use this to limit the number of TPOs drawn on the chart. In terms of computer resources and network activity, loading past tick data might be costly. You could click the “Show All” box to see all TPOs in the chart’s time frame.
  • RTH Data Only – If selected, this will only load tick data from the instrument’s regular trading session. This parameter will be ignored if no regular trading session is established for the instrument.
  • Use Historical Bars – You could enable the use of minute bars to build TPOs; this is great for longer time frame profiles because tick data for the entire range does not need to be retrieved.

Conclusion

A TPO chart allows you to analyze the quantity of trading activity for each price level the market traded at during a specified time period. The TPO Profile Chart research shows you where the market is trading the majority of the time. The TPO Profile Chart analysis determines the Point of Control, which is the price level at which the majority of trading occurs over time, as well as the surrounding Value Area. It can be utilized independently or in conjunction with the Volume by Price study. You can combine and separate TPO profiles for each period of time.

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