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Trading Double Distribution Days in Market Profile

• By MarketProfileHQ Team
Trading Double Distribution Days in Market Profile

Double distribution days are a specific Market Profile pattern that occurs when the market creates two distinct Value Areas during a single session. Understanding and trading double distribution days can provide unique trading opportunities on Indian exchanges.

What is a Double Distribution Day?

A double distribution day occurs when the market creates two separate Value Areas with a low-volume area (single prints) between them. This pattern indicates the market found value in two different price ranges during the session.

Characteristics of Double Distribution Days

Double Distribution Features:

  • Two Value Areas: Two distinct Value Areas
  • Low volume gap: Low volume area between them
  • Two POCs: Two Points of Control
  • Unusual structure: Unusual market structure
  • Significant move: Significant price move occurred

Visual Identification

Look for:

  1. Two Value Areas: Two separate Value Areas visible
  2. Single prints between: Single prints between Value Areas
  3. Two POCs: Two distinct POCs
  4. Gap area: Low volume gap between distributions
  5. Unusual shape: Unusual profile shape

Types of Double Distribution Days

Upward Double Distribution

Upward Pattern:

  • Lower Value Area: First Value Area at lower prices
  • Upper Value Area: Second Value Area at higher prices
  • Gap between: Single prints between them
  • Bullish move: Price moved up significantly

Characteristics:

  • Price moved from lower to higher Value Area
  • Strong upward move
  • Two distinct value areas
  • Gap filled or not filled

Downward Double Distribution

Downward Pattern:

  • Upper Value Area: First Value Area at higher prices
  • Lower Value Area: Second Value Area at lower prices
  • Gap between: Single prints between them
  • Bearish move: Price moved down significantly

Characteristics:

  • Price moved from higher to lower Value Area
  • Strong downward move
  • Two distinct value areas
  • Gap filled or not filled

Why Double Distribution Days Matter

Market Psychology

Double Distribution Indicates:

  • Value shift: Significant value shift occurred
  • Strong move: Strong directional move
  • Two equilibriums: Market found two equilibriums
  • Unusual session: Unusual trading session
  • Potential reversal: Potential for reversal

Trading Implications

Double Distribution Provides:

  • Two Value Areas: Two distinct trading ranges
  • Gap area: Gap area to watch
  • Reversal potential: Potential reversal areas
  • Range trading: Range trading opportunities
  • Breakout potential: Breakout opportunities

Trading Double Distribution Days

Strategy 1: Value Area Trading

Setup:

  1. Identify double distribution
  2. Identify both Value Areas
  3. Trade within each Value Area
  4. Watch for gap fill

Entry:

  • Enter at Value Area boundaries
  • Trade rotations within Value Area
  • Use tight stops
  • Target opposite boundary

Exit:

  • At opposite Value Area boundary
  • When gap fills
  • At stop loss
  • On reversal

Strategy 2: Gap Fill Trading

Setup:

  1. Identify double distribution
  2. Identify gap area
  3. Wait for price to return
  4. Enter on gap fill

Entry:

  • Enter when price returns to gap
  • Confirm with structure
  • Use tight stops
  • Target Value Area

Exit:

  • At Value Area
  • When gap filled
  • At stop loss
  • On continuation

Strategy 3: Breakout Trading

Setup:

  1. Identify double distribution
  2. Identify current Value Area
  3. Wait for breakout
  4. Enter on breakout

Entry:

  • Enter when price breaks Value Area
  • Confirm with volume
  • Use tight stops
  • Target extension or other Value Area

Exit:

  • At extension target
  • At other Value Area
  • At stop loss
  • On reversal

Common Patterns

Upward Double Distribution

Pattern:

  • Lower Value Area: 19,000 - 19,100
  • Gap: 19,100 - 19,150 (single prints)
  • Upper Value Area: 19,150 - 19,250
  • Price: In upper Value Area

Trading:

  • Trade within upper Value Area
  • Watch for return to gap
  • Watch for return to lower Value Area
  • Use both Value Areas as reference

Downward Double Distribution

Pattern:

  • Upper Value Area: 19,200 - 19,300
  • Gap: 19,100 - 19,200 (single prints)
  • Lower Value Area: 19,000 - 19,100
  • Price: In lower Value Area

Trading:

  • Trade within lower Value Area
  • Watch for return to gap
  • Watch for return to upper Value Area
  • Use both Value Areas as reference

Common Mistakes

1. Not Recognizing Double Distribution

Problem:

  • Missing the pattern
  • Trading incorrectly
  • Poor entries
  • Lower probability

Solution:

  • Learn to identify pattern
  • Recognize double distribution
  • Trade appropriately
  • Improve probability

2. Ignoring Gap Area

Problem:

  • Not watching gap
  • Missing gap fill opportunities
  • Missing reversal signals
  • Lower probability

Solution:

  • Always identify gap
  • Watch for gap fill
  • Use gap as reference
  • Improve opportunities

3. Trading Only One Value Area

Problem:

  • Focusing on one Value Area
  • Missing other opportunities
  • Incomplete analysis
  • Lower probability

Solution:

  • Identify both Value Areas
  • Trade both areas
  • Complete analysis
  • More opportunities

Real-World Examples

Example 1: Upward Double Distribution

Setup:

  • Lower Value Area: 19,000 - 19,100
  • Gap: 19,100 - 19,150
  • Upper Value Area: 19,150 - 19,250
  • Price: 19,200 (in upper Value Area)

Analysis:

  • Double distribution identified
  • Price in upper Value Area
  • Gap below
  • Potential for return

Trade:

  • Trade within upper Value Area
  • Watch for return to gap
  • Enter on gap fill
  • Target lower Value Area

Example 2: Gap Fill Trade

Setup:

  • Double distribution with gap
  • Price: Returns to gap area
  • Volume: Increasing

Analysis:

  • Price returning to gap
  • Gap fill potential
  • High probability
  • Reversal or continuation

Trade:

  • Enter on gap fill
  • Confirm with structure
  • Target Value Area
  • Use tight stops

Advanced Techniques

Multiple Timeframe Analysis

Using Multiple Timeframes:

  • Daily: Identify double distribution
  • Intraday: Find entry points
  • Confirmation: Confirm across timeframes
  • Better entries: Better entry timing

Volume Analysis

Volume Patterns:

  • High volume in Value Areas: Strong Value Areas
  • Low volume in gap: Weak gap area
  • Volume on gap fill: Confirms gap fill
  • Volume divergence: Potential reversal

Tools for Double Distribution Trading

Professional double distribution trading requires:

  • Market Profile visualization
  • Value Area identification
  • Gap area recognition
  • Historical pattern analysis

Vtrender provides professional Market Profile tools to help you identify and trade double distribution days on Indian exchanges.

Best Practices

  1. Identify pattern: Learn to identify double distribution
  2. Identify both Value Areas: Identify both Value Areas
  3. Watch gap: Always watch gap area
  4. Trade appropriately: Use appropriate strategy
  5. Manage risk: Always use stops

Conclusion

Double distribution days are unique Market Profile patterns that provide distinct trading opportunities. By learning to identify double distribution days and trading both Value Areas and gap areas, you can find profitable trading opportunities on Indian exchanges.

Start identifying double distribution days with Vtrender’s professional Market Profile tools and improve your trading on NSE and BSE.

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