POC and volume

lucacrebbe

Active Trader
Jun 26, 2017
108
1
32
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Hello I have some questions about this volume profile.
I am trying to identify zones ''where the price could fall to, after a great pump'' including in the volume profile into the analysis .

As you can see here (pic below) the longest bar of the volume profile is in the zone of resistance... I'd have two questons:

1) -- Is the volume profile a dynamic tool so for example the ''most traded price of today'' could not be equal to the most traded price of 2 days ago?

2) -- In that case the most peack of volume has happened near to an important resistance area...

POC near to an important resistance area = SELL SELL SELL?


3) (the most important)-- Since these are zone levels where there is the greatest ammount of volume
My question is : Should I focus on points of control for volume? How does the price behave around these points?
 

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Enivid

Administrator
Staff member
Nov 30, 2008
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Odessa
www.earnforex.com
1. This is something you should ask the indicator's author about.
2. I don't see that. It looks like the POC is near the current support level.
3. Such volume profiles even when built on actual volume data (not on tick volume), don't show the actual distribution of current volume over price. All they do is plot volume of the trades that happened at the prices they happened. The current volume of limit orders isn't shown by such indicators. And of course, it cannot show the volume of traders who will add or remove orders in the next minutes/hours depending on how the price goes.
4. It is believed that the POC will act as a strong level of support/resistance, however, that's not always the case.
 

Uaredaty

Trader
Jan 19, 2019
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I think that you are complicating analysis a little bit. Major rule in forex is keeping it simple as possible. From my experience, this is the best trading strategy.