What China want is too big and difficult to be given and literally left nothing for surrounding countries... so yea we might see escalating tension/conflict in that region.
Infinitus as profile trader yourself what would your comment be on: low volume area in profile-trader should expect price to go quickly trough or bounce.
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That statemnt makes little sense to apply it on real trading. Do you have additional view to that? Just curious not that i would trade it. How would you apply low volume area as practical approach to trade.
It is due to the auctioning process. A low volume area (no-business area) was build in the past, because only very few traders saw value in that area. For the buyers the price was too high, or for the sellers too low.
So when price is approaching this area again, price usually gets quick rejected or jumps through. Keep in mind: in the past there were only few positions build on this place, so also from a supply side a poor place.
With this in mind, question is how we can trade it.
If we let aside all our other tools like EW, momentum, channels, fibs, price action etc., and would only play it by volume profile (or market profile), one could countertrade, when the price pierces into the low volume area.
Now you have to look, what on the other side of the low volume area is:
either you have a longer zone of low volume, or the next high volume zone is developing
In the first case you would be now in a dangerous situation with your counter trade. Because price could test out the whole length of the low volume zone.
The latter case is more convenient to trade, because when price decides to run against your countertrade, price will find constantly enough fodder, so that the movement is (could be) more slowly. In this case you can set a SL for example beyond the next POC of the high volume zone, or you take the SL beyond the area of the next low volume zone.
But it is much more wise to combine the profiles with, for example, price action. The profile gives you a good guidance, where to look for specific movements, specific PA. That makes life easier. With a profile you can sense what will/might happen where.
Also you can use the profiles for your TP's. When you was able to get a trade entry right, a good place for a TP would be near the low volume zone. But do not set the TP into the low volume zone. You will want to distribute your holdings, where you can sense some buyers/sellers left. When your TP is right in the low volume zone, price may never reach it.
In the video they were talking about the long term distributions. They told about the seven year distributions.
I think, this long running distributions only make sense, when you are in an area, where price did not trade for the last few years. We had such a situation, when EURUSD came down to the bottom, or went below 1.18. In this situation we had price not for many years. So we were literally forced to look at very old data.
But as you surly can remember, I told several times, that price seemed to not too much interested in this very old volume levels often enough.
In such a situation of such a strong unidirectional move, you use the developing profile much better, when looking for opportunities in certain areas, when price retraces from the trend direction. Then you can spot the opportunities in the fresh data.
When looking at volume profiles and deciding which data has to be taken, I decide by the swings having developed. I like to have the data of the last major swing processed into the profile (high to low), and then the profile of the new developing swing. That gives you two major distributions. You can handle them separately or merge them into another with a color code.
That is for the bigger picture.
Additionally to that you can build daily distributions or other short term distributions to make your judgements.
Hi Jan, sorry for answering so late. Was too busy........ The statement in question is true. It is due to the auctioning process. A low volume area (no-business area) was build in the past, because only very few traders saw value in that area. For the buyers the price was too high, or for the sellers too low. So when price is approaching this area again, price usually gets quick rejected or jumps through. Keep in mind: in the past there were only few positions build on this place, so also from a supply side a poor place. With this in mind, question...
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Thx that answers it well. Its important to watch also other development zones in relation to low volume zone, to expect move where and how far could it go.
The following volume profile was created since the top at 1.1444
we can see a POC at 1118 and a low volume zone surrounding 1060
should price overjump the 1060 area, we may see churning mode towards the 1118 POC. Break of 1118 will most likely lead to test of 1218-1236 area
{quote} Thx that answers it well. Its important to watch also other development zones in relation to low volume zone, to expect move where and how far could it go.
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Yes, indeed. As they also noted in the video, it is important to look the short term distribution in a long term distribution. In other words:
when in a long term high volume zone: does the short term distribution also show higher volume distribution, or is price kind of running towards the tails of the long term distribution (and so on)
EU The following volume profile was created since the top at 1.1444 we can see a POC at 1118 and a low volume zone surrounding 1060 should price overjump the 1060 area, we may see churning mode towards the 1118 POC. Break of 1118 will most likely lead to test of 1218-1236 area {image} {image}
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For longer term positioning one can do the following now:
start building short positions here up to the 1060 low volume zone.
SL either behind 1118 POC, or better behind 1236 low business zones
Keep in mind: we are trying to catch a several hundreds pip move to the downside here. So a SL of 100-200 Pips is normal. So adjust MM accordingly.
If you like to be more aggressive, try to get a healthy short near the 1050-1060 zone, but watch PA carefully. But keep in mind that one can miss the move down. But every here and then a new train will start
{quote} For longer term positioning one can do the following now: start building short positions here up to the 1060 low volume zone. SL either behind 1118 POC, or better behind 1236 low business zones Keep in mind: we are trying to catch a several hundreds pip move to the downside here. So a SL of 100-200 Pips is normal. So adjust MM accordingly. If you like to be more aggressive, try to get a healthy short near the 1050-1060 zone, but watch PA carefully. But keep in mind that one can miss the move down. But every here and then a new train will...
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This would be pure volume driven trade decision
Combine it with PA and the decisions get better and more precise
In middle of high volume area atm. Structurally it would be a bit wierd and unusual to see that break 1000 now. And since we cleared very nicely 1000 on fbo and closed down down direction is better chance, however bulls are really stubborn pushing still strong. But if lows give away h1 it should cement it.
