Definition of 'Rotation Factor'
The Rotation Factor for a single bar (Market Profile bracket) can be one of five values from -2 to +2 and is very easy to calculate. Compare the high of the current bar to the high of the previous bar. If the current bar has a higher high then assign a value of +1, if it has a lower high then assign a value of -1, if the values are the same then assign a value of 0. Do the same comparison with the lows and then add the two values together.
Look at the image and calculate the rotation factor for the second bar. It's -1 because it has a lower high and an equal low (-1 + 0 = -1). The third bar has a rotation factor of 0 because the higher high's value of +1 cancels out the lower low's value of -1 for a net value of zero. The fourth and fifth bars have rotation factors of -2 because they have lower highs and a lower lows.
During the day you should keep tracking of the running (cumulative) total of the rotation factors. So after the second bar has completed we have -1 etc. This is how it looks like:
Post a comment if you are still confused.
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