Who this entry is for — Anyone reading Market Profile who wants an objective filter on capital-flow direction, beyond day-type labels. CBOT Study Guide, Part V (1996).
Source: CBOT, Market Profile Home Study Guide (1996), Part V. Raw:
raw/patrimonio-emiciclo/studio-steidlmayer/cbot/part-05-decisioni-trading.
Prerequisites
Distribution process, Equilibrium and imbalance.
Definition
Market activity has two phases: distribution (directional move = capital flow) and development (balanced rotations = reaction). Minus development = missing development after distribution: only capital flow remains active.
| Form | What it signals |
|---|---|
| Clean directional move (single print) | Most obvious form |
| Space to emerging market activity (4+ TPO) | Position erodes if space narrows |
| Parameter (control price) not violated | Backward or forward influence pending |
| Session gap | Flow not «offset» |
| Missing reaction to news | Objective sentiment vs headline |
Steidlmayer — «Minus development is the common denominator of all the indicators I have ever used. It is what I am always looking for.»
Six critical questions
| # | Question | Implication |
|---|---|---|
| 1 | Price or market activity in control? | Price control → fade; market-activity control → go with move |
| 2 | Direction of capital flow? | Money in/out shifts equilibrium |
| 3 | Control price in longest timeframe? | Commands until unfair high/low breaks |
| 4 | Average of intermediate control prices? | Value in intermediate horizon |
| 5 | Near-term activity? | Will the parameter hold or fail? |
| 6 | Current condition (1st or 3rd std dev)? | Balanced → fade; imbalanced → trend |
Development vs distribution
| Phase | Control | Influence | Strategy |
|---|---|---|---|
| Development | Price | Backward → return to control price | Fade (buy dips, sell rallies) |
| Distribution | Market activity | Forward → new equilibrium | Go with the move |
Splitting a session into sub-distributions reveals flow reversals hidden inside the overall balance area.
Three reference points
Each distribution creates levels the market passes through or reverses at: unit high/low, control price (widest part of forming value area), developing value area high/low. At each: will the parameter hold or fail? → Control price.
Common mistake — Using minus development as an entry/exit trigger. It shows sentiment *direction*, not precise timing.
Links
- Liquidity Data Bank (flat top/bottom = volumetric minus development)
- Range extension
- Market Profile