Lesson 3 – TPO Basics Explained | Made Easy for Beginners
Understanding TPO: Time Price Opportunity
Introduction to TPO
- TPO, or Time Price Opportunity, is a representation similar to volume profile, providing context for trades and levels.
- It visually displays data through letters representing time intervals (e.g., 30-minute sessions), creating a bell curve of price action.
Key Components of TPO
- The chart illustrates areas where time has spent the most volume, indicating significant transaction points.
- Value area high and low are defined; these represent the extremes of fair value within the 70% balance area.
Objective vs. Subjective Analysis
- Unlike subjective methods used by ICT traders for determining premium and discount levels, TPO offers an objective approach based on price behavior.
- This objectivity helps identify whether prices are operating in value, premium, or discount zones.
Understanding Single Prints and Excess
- Single prints appear as one-sided moves with no overlap in periods, indicating imbalances that need to be filled later.
- Excess refers to areas at the tails of the TPO where multiple rows form at extremes; these serve as support and resistance levels.
Pull Highs and Pull Lows
- Poor highs/lows indicate weak rejections from levels and are often seen in NASDAQ markets as more reliable than ES markets.
- These concepts help traders understand unfinished auctions and potential market movements based on previous price actions.
Practical Application of TPO Concepts
- Traders should utilize tools like corn towers to mark value high/low while considering single prints for bias creation.
- An example scenario illustrates how single prints can influence trading decisions regarding price movement back into value areas.