Volume Profile POC Trade

Entry Logic

• Enter long on a test of the Volume Profile Point of Control (POC).
• Confirmation: A bullish reversal candle at the POC.
• Timeframe: 30-minute chart.
• Location: At the POC.
• Market Condition: A balanced, range-bound market.

Exit Logic

• Profit Target: The top of the value area.
• Scaling Out: Not recommended.
• Trailing Stop: A close below the POC.
• Signal Failure: A close below the POC.
• Opposite Signal: A bearish reversal candle at the POC.
• Time Expiration: End of the day.
• Momentum Loss: A failure to reach the top of the value area.

Stop Loss Structure

• Hard Stop: Below the low of the reversal candle.
• Soft Stop: A close below the POC.
• Max Dollar Loss: $90 per trade.
• Max Percent Loss: 0.9% of account.
• Structural Stop: Below the POC.

Risk Management Framework

• Risk Per Trade: 0.45% of account.
• Daily Limit: 3 losing trades.
• Weekly Limit: 4% drawdown.
• Max Drawdown: 12%.
• R:R Requirement: Minimum 1.5:1.

Position Sizing Model

• Sizing Approach: Fixed fractional.
• Volatility Adjustment: No adjustment needed.
• Conviction Sizing: Full size on A+ setups.
• Scaling In: Not recommended.
• Scaling Out: Not recommended.

Trade Filtering

• Market Conditions: Only trade in balanced markets.
• Setups: Look for tests of the POC.
• Instruments: High-volume stocks and futures.
• Time Restrictions: No restrictions.
• Chop/News Avoidance: Avoid trading around news.

Context Framework

• Trend Direction: Not applicable.
• VWAP Relationship: Price should be near VWAP.
• MA Relationship: Not applicable.
• Range Location: At the POC.
• Higher TF Alignment: The daily chart should be balanced.

Trade Management Rules

• Breakeven: Move stop to breakeven after a 1R move.
• Scale Out: Not recommended.
• Add Size: Not recommended.
• Fast vs Slow Moves: Take profits at the target.

Time Rules

• Optimal Window: Any time during the day.
• Times to Avoid: None.
• Session Notes: Works well in all sessions.

Setup Classification

• A+ Setup: A clear test of the POC with a strong reversal candle.
• A Setup: A decent test of the POC with a good reversal candle.
• B Setup: A questionable test of the POC or reversal candle.
• C Setup: Avoid weak setups.

Market Selection Criteria

• Instruments: Instruments with a clear volume profile.
• Volume: High volume.
• Volatility: Moderate volatility.

Statistical Edge Metrics

• Win Rate: 60%.
• Avg Win: 1.5R.
• Avg Loss: 1R.
• Profit Factor: 0.9.
• Expectancy: -0.1R per trade.

Failure Conditions

• The strategy fails in trending markets.
• Avoid trading if the POC is not well-defined.

Psychological Rules

• Be patient and wait for the price to come to you.
• Do not force trades.

Advanced Components

• Regime Detection: Use a market profile to identify the market type.
• Filters: Use a volume profile filter.
• Correlation: Avoid correlated instruments.
• MTF Alignment: Ensure the higher timeframes are also balanced.

Location

• Strongest: In a well-established range.
• Weakest: In a strong trend.