Markets in Profile explores the confluence of three disparate philosophical frameworks: the Market Profile, behavioral finance, and neuroeconomics in order to present a unified theory of how markets work. The Market Profile is an ever-evolving, multidimensional graphic that gives visual form to the market's continuing auction process, revealing the myriad underlying dynamics that influence market activity. Behavioral finance posits that investors are driven more by emotional factors and the subjective interpretation of minutia than by "rationality" when making investment decisions. And neuroeconomics is the study of how investor psychology permeates and affects the financial markets. Mr. Dalton explicates the ways in which irrational human behavior influences the market's natural auction process, creating frequently predictable market structure, which results in opportunities for investors to ameliorate risk. The book will improve investors ability to interpret change in markets, enabling better, more confident investment decisions.
Markets in Profile
and over one million other books are available for Amazon Kindle. Learn more
| |||||||||||||||
Are you a finance, investing, economics or accounting professional? Find books, read blog posts, and discover new authors and thought-leaders in Money & Markets, a new home for finance industry professionals on Amazon.com. > Shop now |
Book Description
Frequently Bought Together
Editorial Reviews
From the Inside Flap
Fifteen years since publishing Mind over Markets—their seminal work on markets and investor behavior—Dalton, Jones, and Dalton have greatly expanded their scope, delving deeply into the ways in which the auction process reveals the actions of all investor time frames. They believe that by understanding timeframe behavior through developing market structure, it is possible to identify asymmetric opportunities that can ameliorate risk and help ensure financial dominance.
This book is a bold call to action for all investors—from day traders through the longest-term individual investors, to traditional asset managers and hedge funds that control trillions of dollars. It challenges serious traders, investors, and researchers to reach beyond price-based market analysis and traditional fundamental research for a more contextual approach . . . an approach that translates the principles of behavioral finance into actionable reality by examining the relationship between price, time, and volume.
The authors take a profoundly different approach toward the traditional separation between day, short-, intermediate-, and long-term investors, pointing out that even the longest-term professional investor is a day trader on the day they enter, exit, trim, or add to a position. Lead author Jim Dalton and coauthor Eric Jones—having been heavily involved in selecting hedge funds and traditional managers for a leading Wall Street financial services firm—can attest to the importance of each basis point of performance in a world where one quarter's results can trigger financial triumph or a quick exodus.
In May of 2006, two months before the book was to be delivered to the publisher, the U.S. stock market broke eight percent in a matter of days—sending investors and the media into a tailspin. The authors saw this as an opportunity to demonstrate their theories in real-time, as opposed to cherry-picking historical events that supported their claims. The event unfolds in Chapter 6 and the authors offer sound advice and strategies on how to navigate market activity yet to unfold. The results are summarized in the Appendix, which was written after the book was submitted to the publisher. You be the judge.
Filled with in-depth insight and expert advice, Markets in Profile teaches you the market's basic auction process, redefines how to view and conduct research, separates the markets into different time frames, illustrates the importance of inventory imbalances, and, in sum, demystifies market behavior by showing you how to organize the market's auction process in a scientific, systematic way.
From the Back Cover
Praise for MARKETS in PROFILE
"Good books teach, but the best books enlighten. Markets in Profile is much more than a lucid explanation of the Market Profile and its application; it is an enlightening perspective on auction markets and the principles underlying all trading, regardless of time frame. Clearly written with many practical examples, Markets in Profile moves seamlessly from trading how-to's to trading psychology and back again, emphasizing the trader's dual challenge of understanding markets and understanding self. In so doing, authors Dalton, Dalton, and Jones have produced a worthy successor to their classic Mind over Markets."
—Brett N. Steenbarger, PhD, author of The Psychology of Trading and Enhancing Trader Performance
"Markets in Profile is a brilliant, insightful work that should be required reading for any trader. Dalton, Dalton, and Jones will transform your trading technique through their unique knowledge of the markets and understanding of trading psychology."
—Martin Sheridan, commodities trader, NYMEX member
"This book provides a fresh approach to behavioral finance—ideas that I have used to great benefit."
—Gregory A. Ehret, Senior Managing Director, State Street Global Advisors
"Few people understand the dynamics of the auction process as well as Jim Dalton. Market Profile offers a graphic representation of this process and Markets in Profile illustrates Jim's mastery of it."
—Steve Dickey, Vice President of Market Data Products, Chicago Board of Trade
"Market data speak volumes and Jim Dalton has deciphered the code. In Markets in Profile, Jim shares his techniques of profitable trading in a most readable and entertaining format. Serious traders, both professional and amateur, should benefit from the application of Jim's volumetric approach to reading what investors are telling us through their collective buy-sell transactions."
—Walter Sall, professional investor
Product Details
Would you like to update product info or give feedback on images? |
More About the Authors
Discover books, learn about writers, read author blogs, and more.
Customer Reviews
Most Helpful Customer Reviews
64 of 66 people found the following review helpful
Format:Hardcover
When I initiated an internship program for new traders at a proprietary trading firm, I began by providing students with a conceptual overview of markets and the factors that make markets move. That overview drew heavily upon the book "Mind Over Markets" by James Dalton, Eric Jones, and Robert Dalton. Quite simply, that book is the most readable, lucid, and insightful work on the auction process underlying trading markets that I have yet encountered.
You can imagine, then, my delight when I had the opportunity to read an advance copy of the authors' new work, "Markets in Profile" and provide a review statement for the book's cover. I turn down these endorsement requests rather often. Frankly, many of them are simply favors being done by buddies and don't reflect an actual reading of the text. The least authors can do for their readers is keep it real.
There was no problem in my keeping it real when I wrote that "Good books teach, but the best books enlighten". Markets in Profile is one of those enlightening books, because it takes the conceptual framework from the first book and applies it to concrete trading time frames and trading scenarios. In that sense, I would say it is a worthy bridge between theory/understanding and practice.
A core theme of Markets in the Dalton, Dalton, and Jones text is the following nugget: "If you can correctly identify which timeframe is in control of market activity, and you have a good understanding of how the individual timeframes generally behave, then you are in a stronger position to trade, invest, and effectively control risk." The practical aspect of the book is that it illustrates how to read the Market Profile to grasp the long-, intermediate-, and short-term auctions and place current market activity into a proper context.
Time and again I have observed that a trading edge comes from understanding what is happening at the timeframes greater than the one you're trading. If you're in a trading range, you might want to be prepared for a breakout. Which way is it likely to break? Using price, time, and volume to see how value is being established at those larger timeframes provides invaluable clues.
As the authors also explain, observing volume patterns as the market moves away from value at one timeframe is very important to understanding whether or not we will return to value or reprice value (perhaps in line with the longer-term auctions). Seeing these dynamics evolve over time helps traders understand what is likely to occur, but also *why*.
I find the authors' use of examples, charts, and Market Profile diagrams to be quite helpful. This is not an encyclopedic work; it's a very readable 200 pages. By the end, however, readers will have a solid understanding of how to apply auction-based principles across timeframes and frame their trade ideas with that broader understanding. A particularly practical chapter is the one on day-trading, which shows how these principles are relevant to the active trader.
The authors make clear that Market Profile is not a trading system, but a framework from which trading ideas can be derived. My analogy isn't perfect, but perhaps it will make sense: Just as the periodic table helps chemists organize their understanding of elements and predict how elements are likely to interact with one another, the Market Profile organizes data on price, time, and volume to help traders anticipate market behavior. We have types of elements (metals, non-metals) and combinations of elements, and we have types of markets and combinations of markets: knowing type provides invaluable clues as to likely behavior in various situations.
It's rare that I don't have some reservations about a book. This one is clearly written, straightforward, and doesn't get away from its topic. There's no fluff, and (mercifully) there's no chest-beating self-congratulations from authors who try to make themselves out to be gurus. Markets in Profile is simply a guide for putting theory into practice at different time frames. That, in itself, is unique in the trading literature.
You can imagine, then, my delight when I had the opportunity to read an advance copy of the authors' new work, "Markets in Profile" and provide a review statement for the book's cover. I turn down these endorsement requests rather often. Frankly, many of them are simply favors being done by buddies and don't reflect an actual reading of the text. The least authors can do for their readers is keep it real.
There was no problem in my keeping it real when I wrote that "Good books teach, but the best books enlighten". Markets in Profile is one of those enlightening books, because it takes the conceptual framework from the first book and applies it to concrete trading time frames and trading scenarios. In that sense, I would say it is a worthy bridge between theory/understanding and practice.
A core theme of Markets in the Dalton, Dalton, and Jones text is the following nugget: "If you can correctly identify which timeframe is in control of market activity, and you have a good understanding of how the individual timeframes generally behave, then you are in a stronger position to trade, invest, and effectively control risk." The practical aspect of the book is that it illustrates how to read the Market Profile to grasp the long-, intermediate-, and short-term auctions and place current market activity into a proper context.
Time and again I have observed that a trading edge comes from understanding what is happening at the timeframes greater than the one you're trading. If you're in a trading range, you might want to be prepared for a breakout. Which way is it likely to break? Using price, time, and volume to see how value is being established at those larger timeframes provides invaluable clues.
As the authors also explain, observing volume patterns as the market moves away from value at one timeframe is very important to understanding whether or not we will return to value or reprice value (perhaps in line with the longer-term auctions). Seeing these dynamics evolve over time helps traders understand what is likely to occur, but also *why*.
I find the authors' use of examples, charts, and Market Profile diagrams to be quite helpful. This is not an encyclopedic work; it's a very readable 200 pages. By the end, however, readers will have a solid understanding of how to apply auction-based principles across timeframes and frame their trade ideas with that broader understanding. A particularly practical chapter is the one on day-trading, which shows how these principles are relevant to the active trader.
The authors make clear that Market Profile is not a trading system, but a framework from which trading ideas can be derived. My analogy isn't perfect, but perhaps it will make sense: Just as the periodic table helps chemists organize their understanding of elements and predict how elements are likely to interact with one another, the Market Profile organizes data on price, time, and volume to help traders anticipate market behavior. We have types of elements (metals, non-metals) and combinations of elements, and we have types of markets and combinations of markets: knowing type provides invaluable clues as to likely behavior in various situations.
It's rare that I don't have some reservations about a book. This one is clearly written, straightforward, and doesn't get away from its topic. There's no fluff, and (mercifully) there's no chest-beating self-congratulations from authors who try to make themselves out to be gurus. Markets in Profile is simply a guide for putting theory into practice at different time frames. That, in itself, is unique in the trading literature.
30 of 34 people found the following review helpful
By John Forman
Format:Hardcover|Amazon Verified Purchase
At only 200 pages, Markets in Profile isn't exactly a hefty tome. Don't let its length deceive you, though. This is an intellectual book which incorporates a fairly wide array of topics, including some common academic theories, in to the mix. While there are loads of graphics included to provide visual examples in support of the text, which serves to cut down the actual amount of textual content, do not expect to breeze through this book in an afternoon sitting. It delves in to the heart of trading in a way that will force you to examine how you approach the markets.
One of the things that most, if not all of us forget when we're analyzing and trading the markets is exactly what's going on. We see the movement of prices and fail to remember what is really happening to create that price movement. That's the auction process. To quote the authors, "... price and volume move over time to facilitate trade in the pursuit of value."
A great deal of effort is expended by market participants to determine value. Fundamental stock market analysts spend hour upon hour trying to come up with a figure that represents the worth of a company based on earnings, book value, and other factors. That is all fine and good, but it is the market, in the end, which defines value. And it does so on a running basis.
The problem we market participants have is that we focus too much on price, which the authors indicate is merely the advertising side of the auction process. They demonstrate how price is just a way for the market to seek value. There's an important distinction here. Price is not value. It is just a way for the market to find value, which is defined as the price area where volume is generated because buyers and sellers meet in agreement.
To help us understand that process, the authors use some easily understood examples to define the basic mechanisms of the financial markets. They are the same as in other markets, after all. The process might operate faster and on a broader scale, but otherwise it is the same. Sellers are trying to recieve the highest possible value in the sales price, while buyers are trying to minimize the price they pay in relation to the value the expect to recieve. When there is disagreement between the two, little trading takes place. When they agree, lots of trading happens. It doesn't matter if the product is automobiles, banannas, or stocks.
About the first half of Markets in Profile is laying the kind of mental groundwork needed for really getting in to the analytic method known as Market Profile. Market Profile is the technique the authors use to identify the levels where the market has found value and when the market is in search of value. It is an approach first developed by Peter Steidlmayer (see Steidlmayer on Markets) at the Chicago Board of Trade (CBOT) for the futures market, and which they spent considerable time defining and outlining in their previous book, Mind Over Markets.
On the surface, Market Profile appears to be just another way to present price history in graphic form. The authors, however, demonstrate how the Market Profile distribution patterns put "market-generated information" to excellent use in identifying value and the market's pursuit of it.
Using numerous examples, the authors explain in detail the ways Market Profile can be used to identify what they refer to as "asymmetric opportunities". These are market set-ups where not only do the odds more favor a move in one particular direction, but the situation is such that a move in that direction is likely to be substantially larger than were the market to go the other way. Think of it as you would a trading system that has a win rate incess of 50% and a high average winner to average loser ratio. That's a pretty good combination!
This is a book that can make a huge difference in the way you look at the markets, and by extention, the way you trade, but only if you let it. The authors challenge quite a few elements of trading. Some readers may put up walls where that happens. The open-minded reader, though, will find themself thinking along completely new paths and gaining massive insights in to the way they see price action.
(For the record, years ago, when I was a professional analyst focusing on the futures market, I used Market Profile extensively and with considerable success. In the intervening years I fell away from it when I shifted market focus, but I'm now making a move back.)
One of the things that most, if not all of us forget when we're analyzing and trading the markets is exactly what's going on. We see the movement of prices and fail to remember what is really happening to create that price movement. That's the auction process. To quote the authors, "... price and volume move over time to facilitate trade in the pursuit of value."
A great deal of effort is expended by market participants to determine value. Fundamental stock market analysts spend hour upon hour trying to come up with a figure that represents the worth of a company based on earnings, book value, and other factors. That is all fine and good, but it is the market, in the end, which defines value. And it does so on a running basis.
The problem we market participants have is that we focus too much on price, which the authors indicate is merely the advertising side of the auction process. They demonstrate how price is just a way for the market to seek value. There's an important distinction here. Price is not value. It is just a way for the market to find value, which is defined as the price area where volume is generated because buyers and sellers meet in agreement.
To help us understand that process, the authors use some easily understood examples to define the basic mechanisms of the financial markets. They are the same as in other markets, after all. The process might operate faster and on a broader scale, but otherwise it is the same. Sellers are trying to recieve the highest possible value in the sales price, while buyers are trying to minimize the price they pay in relation to the value the expect to recieve. When there is disagreement between the two, little trading takes place. When they agree, lots of trading happens. It doesn't matter if the product is automobiles, banannas, or stocks.
About the first half of Markets in Profile is laying the kind of mental groundwork needed for really getting in to the analytic method known as Market Profile. Market Profile is the technique the authors use to identify the levels where the market has found value and when the market is in search of value. It is an approach first developed by Peter Steidlmayer (see Steidlmayer on Markets) at the Chicago Board of Trade (CBOT) for the futures market, and which they spent considerable time defining and outlining in their previous book, Mind Over Markets.
On the surface, Market Profile appears to be just another way to present price history in graphic form. The authors, however, demonstrate how the Market Profile distribution patterns put "market-generated information" to excellent use in identifying value and the market's pursuit of it.
Using numerous examples, the authors explain in detail the ways Market Profile can be used to identify what they refer to as "asymmetric opportunities". These are market set-ups where not only do the odds more favor a move in one particular direction, but the situation is such that a move in that direction is likely to be substantially larger than were the market to go the other way. Think of it as you would a trading system that has a win rate incess of 50% and a high average winner to average loser ratio. That's a pretty good combination!
This is a book that can make a huge difference in the way you look at the markets, and by extention, the way you trade, but only if you let it. The authors challenge quite a few elements of trading. Some readers may put up walls where that happens. The open-minded reader, though, will find themself thinking along completely new paths and gaining massive insights in to the way they see price action.
(For the record, years ago, when I was a professional analyst focusing on the futures market, I used Market Profile extensively and with considerable success. In the intervening years I fell away from it when I shifted market focus, but I'm now making a move back.)
17 of 18 people found the following review helpful
By Tom Wilson
Format:Hardcover
Having read all the books on Market Profile, I have to say this is the most informative and best-written guide on the subject. I studied Market Profile when it first surfaced in the mid-1980s. In retrospect the problem I had in using the Profile was my focus on the single day time frame and my inability to detect the transistion from trending to bracketing markets. Dalton and co-authors provide a clear explanation of how markets change conditions and show how to use the profile to interpret market behavior in different time frames. The Market Profile remains the single best way to organize and interpret market action and this book is an excellent addition to the literature.
Most Recent Customer Reviews
5.0 out of 5 stars
Dalton is the man
First: if you are looking for a book to give you some magical system to trade this isn't your answer (that doesn't exist by the way). Read more
Published 9 months ago by M. J. Bonney
5.0 out of 5 stars
UNBELEIVABLE!!!!!!
I read the first book "MIND OVER MARKETS" about 10 times till I finally got it. But after reading this book once I can honestly say it was the missing link. Read more
Published 16 months ago by Percy Kent
2.0 out of 5 stars
No value at these prices. Let the initiating selling commence.
This book seems to be mostly re-hash of Dalton's books from the late-1980's and early-1990's. Wait for it to be in the Bargain Bin before buying it.
Published on October 15, 2010 by SeedMeister
4.0 out of 5 stars
Good follow up to Mind Over Markets
It's been noted in other reviews of this book that you should read Mind Over Markets first. This book is a bit more theory than Dalton's original, but very valuable. Read more
Published on December 18, 2009 by Aaron Parks
1.0 out of 5 stars
Skip this one and go for the authors' "Mind over Markets" instead
People giving feedback on amazon are sometimes very stupid. This review gets negative feedback and the other book by the same authors that I liked gets positive feedback. Read more
Published on November 28, 2008 by Jackal
5.0 out of 5 stars
this book and mind over markets are the best book for daytrader
I have a big libray and Dalton books are the best for daytrader and swingtrader but to get all the edge from the books you must have experience in the market. Read more
Published on July 4, 2008 by bercovich egon
5.0 out of 5 stars
good to gain logical thinking
I`m a scalper, and I used to trade with no previous day homework and just relying on my intuition. But since I hit a pretty huge drawdawn, I started to study and learn about,... Read more
Published on March 18, 2008 by Kainuma Mitsushiro
1.0 out of 5 stars
Save your money
This book is a waste of money but more importantly it is a waste of life. There is very little in this book that is of any consequence in a trader's quest to better his/her... Read more
Published on January 23, 2008 by R. Dibs
3.0 out of 5 stars
Very Interesting Read IF you already have market profile charting
I bought this book based on the 5 star ratings in amazon. After reading to about halfway through, I was already questioning why it was rated so high. Read more
Published on January 20, 2008 by fengdefied
5.0 out of 5 stars
Essential
I am a fan of the Dalton (and Jones) Gang. See my review of their other superb work, Mind Over Markets.
I am not an author, like some of the reviewers here. Read more
I am not an author, like some of the reviewers here. Read more
Published on August 21, 2007 by ProTrader
Front Cover | Front Flap | Table of Contents | First Pages | Index | Back Flap | Back Cover | Surprise Me!
Citations (learn more)
What Other Items Do Customers Buy After Viewing This Item?
Listmania!
So You'd Like to...
|
|
