Market Profile: Anomalies - Ledges

Alright, so let's talk about another type of structural anomaly. And these are ledges. So just as the word implies, this is where activity literally just falls off a ledge, right where two way activity is abruptly cut off. And we don't have an even distribution within the structure. So at a high like this, this is a ledge, but it helps form a poor high. When we're talking about ledges, for the most part we're talking about within the structure, more towards the interior of the structure. Although this is still a ledge. So it's an area where activity has been abruptly cut. And what we need are more than two TPOs. So here you can see that you have six TPOs outside of this single TPO right here. And what we have is again a non even distribution. So this would be a more gradual even distribution. And then as you get towards the low, you can see that it begins to pick up and become a little bit more sharp, becomes a little bit more blunt. So ledges are areas where again, activity is abruptly cut off and the trade is seen as incomplete. What you're going to see is something that looks like an abnormality within the structure. So for an example, right here, this is a ledge. This is a ledge, alright? You're going to have multiple ledges within a structure. Okay? You'll have some that again are more drastic than others. And these are the ones you're going to want to pay attention to. Because remember, market profile is again, it's a data organization tool. So what we're doing is really we're just taking the activity throughout the day, the micro support and resistances that were formed. And when we're compressing them into a profile, we're seeing them much more obviously because we're starting to see where the high was, for example. So right here, while this was the initial high into that level, this was the ledge that was created afterward. So the market came into this level for 1, 2, 3, 4, 5, 6 periods. So six rotations up towards this. Obviously we didn't spend the same amount of time at each one of these, but this is where trade was abruptly cut off for those periods. So what it shows us when we're looking at a profile is the immediate sign where support or resistance was, for example, of where support or resistance was, for example, in this case it being resistance. So a ledge sets up two different types of opportunities. It sets up, for example, since this was at the high multiple times, it sets up a stop run. And then from that it sets up a breakout with the help of A stop run. So for the most part, when I'm looking at very obvious ledges, I'm looking for potential breakout trades. So if Price trades back into them from the high, you know, if we're already past a ledge, well, then maybe it's potentially a, in this case, a support zone. But on the way back through a ledge, I'm looking for a breakout trade. So, for example, here is a ledge right here. This is an area where activity was abruptly cut off multiple times. But more than likely, as the market revisits this level for the, in this case, seventh time, we're going to have some type of run through this liquidity. So when you're looking at a ledge, you're more often than looking, more often than not looking at a potential breakout opportunity in advance. So what you should be doing is mapping out your structure according to where you currently are and where you sit with respect to previous ledges. So in this case, we're looking at an example where we're actually through this ledge. But Price did take out these highs. So this was a breakout through this ledge. But you can see that after the ledge was taken, it was treated as support. So remember, we're just looking at, when we're looking at ledges within structure, we're really just looking at areas where Price came into multiple times and it held up. So it acted as resistance multiple times at that precise point, or it acted as support at multiple times at that, at that precise point. And if we keep an idea of where these are in the future, we could have an idea of where maybe potential liquidity sits on the other side of that. So if we're looking to again, take some type of breakout or breakdown trade.