Auction Market Theory (AMT) & Market Profile

Overview

Auction Market Theory (AMT) views financial markets as continuous two-way auctions where price discovery occurs through negotiation between buyers and sellers. Market Profile is the visual representation of this theory, showing where and for how long prices traded throughout a session.

Core Philosophy: Markets constantly seek fair value through price discovery. When buyers and sellers agree on value, the market consolidates (balance). When they disagree, the market trends (imbalance).

Use this skill when:

• Building trading bots that use volume analysis
• Understanding value area and point of control (POC) concepts
• Coding market profile algorithms for Discord bots
• Implementing auction-based trading logic
• Analyzing market balance/imbalance

Current as of: January 2025