Abstract:

Our article deals with the issue of financial market prediction, specifically for finding a fair price of a financial instrument on the financial market and its use in the trading process. Today we can find a lot of research focused on methods of analyzing financial instruments with a focus on their effectiveness of prediction and the effectiveness of their use in trading systems. Therefore, we would like to focus our article on pointing out the connection between the analysis tool and the structure of the functioning of the financial instrument pricing process. The aim of our article will therefore be to describe in detail the Volume Profile indicator and identify its connection to the basic microeconomic processes of interaction between supply and demand. In the first chapter, we described in detail the interaction between supply and demand. We also dealt with the theory of the auction process. In the next chapter, we described in detail the Volume Profile method and its use in the process of predicting future price movements of financial instruments in financial markets. In the last chapter, we identified and clarified the connection between the function of this method and the basic microeconomic processes of mutual interaction of supply and demand. We consider the goal of our article to be fulfilled and we believe that it will be valuable in the research process in this area.