DislikedMy conclusion too is that it cannot predict on it's own, as you said, where price will go. What it can certainly do is with other fundamental / technical indicator give us a probability of where it MIGHT go.
By using the various levels, I got some good support and resistance line. When it forms a confluence with other MA's etc, it does suggest a good entry or exit point.
When it breaks a certain level, and by looking to the equity market sentiment, one can eventually put a target at the next level. ( also a stop loss too )Ignored
So by simply watching price in relation to it's mean over x amount of time, trades on lower time frames can develop with a high degree of probability when price has deviated from the mean on multiple time frames.
Market profile is a good concept, but I think it's presented in the worst possible fashion. Not easy to use practically. But by plotting the distribution using regression to establish the mean line and standard deviation lines, it's a lot easier to see how current price is behaving against recent distribution.
If you look at my excel screen shot, it's kinda messy if you don't know what the stuff is. But it's actually quite simple. Each time has a channel constructed from simple price distribution of 24 periods. The green line is price, red a simple ema, and the yellow is a regression ma. When price is at the -1 deviation or higher and the channel or price distribution is sloping up, that is a signal to go long and target at least the mean and probably the +1 or higher. Furthermore, the +1 will typically be the mean of the next higher time frame.
In a heavy trending market, the higher frames might have a sloping channel and price hugs the mean. That means that price is changing at an equal rate to the change in distribution. When that happens, it's set it and forget it time and ride it till runs out using the oscillating action on lower frames as add-on oppurtunities.
