A Basic Guide to Trading a Balanced Volume Profile
Basic Principles of Trading a Balanced Node
Rule 1: Unless the price breaks and holds Value High or Value Low we should expect buyers and sellers to maintain the current balance.
Rule 2: If we break and re-bid from Period Value High we should treat that level as supportive until it is reclaimed ( buy-side acceptance outside of balance)
Rule 3: If we break and push away from Period Value Low we should treat that level as resistance on retest until it is reclaimed (sell-side acceptance outside of balance)
Rule 4: If we recover Value Low and it becomes supportive we look for our Period POC and Period Value High as our targets above ( return to balance)
Rule 5: If we fail to hold Period Value High and sellers make it resistance on re-offer we look for our Period POC and Period Value Low as targets (return to balance)
Balance between Value Low and Value High will remain between buyers & sellers until we see a value shift and acceptance above/below on one of our "edges".
Utilizing these rules we can look for opportunities around our Value Edges and have a better understanding how to trade around them.
Rule 1: Unless the price breaks and holds Value High or Value Low we should expect buyers and sellers to maintain the current balance.
Rule 2: If we break and re-bid from Period Value High we should treat that level as supportive until it is reclaimed ( buy-side acceptance outside of balance)
Rule 3: If we break and push away from Period Value Low we should treat that level as resistance on retest until it is reclaimed (sell-side acceptance outside of balance)
Rule 4: If we recover Value Low and it becomes supportive we look for our Period POC and Period Value High as our targets above ( return to balance)
Rule 5: If we fail to hold Period Value High and sellers make it resistance on re-offer we look for our Period POC and Period Value Low as targets (return to balance)
Balance between Value Low and Value High will remain between buyers & sellers until we see a value shift and acceptance above/below on one of our "edges".
Utilizing these rules we can look for opportunities around our Value Edges and have a better understanding how to trade around them.