Who this entry is for — Anyone who wants the «why» behind Market Profile and AMT, not just POC/VA labels. Steidlmayer and Koy (Markets and Market Logic, 1986) compress market structure into principles testable on the real auction.
Source: Steidlmayer & Koy, Markets and Market Logic (1986), Section I, ch. 2. Raw:
raw/sources/steidlmayer/ingest-markets-and-market-logic.
Prerequisites
Steidlmayer tradition introduction, Auction Market Theory.
Operating equation
Steidlmayer separates what the market offers from what depends on you:
| Factor | Meaning |
|---|---|
| Market understanding | Reading market-generated information (not external news alone) |
| You | Discipline, timeframe, risk tolerance |
| Strategy | Rules consistent with that understanding |
Book formula — Results = market understanding × (you + strategy). Even with excellent profile reading, without personal execution results collapse.
Principles outline (I–X)
| # | Principle | Operational takeaway |
|---|---|---|
| I | Free market = voluntary participation | Price reflects aggregate choice |
| II–III | Product + need → purpose: facilitate trade | Venue + exchange timeframes |
| IV | Price promotes activity via excess; time regulates | Spikes away from value = auction advertising |
| V | Absent, responsive, or opposite initiating response | |
| VI | Price/time distribution → balance (fair area) | Value Area, two-sided trade |
| VII | Base unit: TPO (time-price opportunity) | |
| VIII | Participant timeframe mix → volatility | Day vs other timeframe |
| IX | Price + time → acceptance/rejection → volume | POC = maximum acceptance |
| X | Same forces in every organised market | Logic transfers beyond CBOT futures |
Accepted vs rejected price
The market distinguishes two price types in the same timeframe:
- Accepted — much time + volume: both sides trade «fairly»
- Rejected — little time + volume: price seen as unfair by one side
This bridges candle charts (executed price only) and Value Area (where consensus forms).
Common mistake — Treating every breakout the same. Without reading responsive (return to value) vs initiating (new value) activity, rotation is confused with trend.