A Basic Guide to Trading a Balanced Volume ProfileBasic 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.
Volumeprofileanalysis
GLD the gold futures ETF LONGOn the daily chart GLD is in a volume profile early breakout going above the jagged pruple line
representing the top of the high volume area. Price has been compressing within a
symmetrical triangle and now has broke through the descending resistance trendline portion of
that. What remains to be seen is a retest of that new support line. Of late Bitcoin has ran up
and probably taken with it market cap away from gold. ( see my idea on the Bitcoin to spot
gold ratio) Now that Bitcoin has topped and is retracing capital is freed up to flow into gold
which has been comparitively weaker. I will take a long trade here and exploit the opportunity
in the cycle between gold and Bitcoin.
UVXY the VIXX following ETF ShortUVXY the fear and volatility ETF ran up nearly 10% on the past trading day before
retracing a bit all due to the quick about-face in the market at about 1PM New York time.
It moved from the lows at the opening bell and let up with after hours profit taking.
The relative volatility indicator shows the volatility pump and then dump.
The dual signal RSI indicator shows the low time frame in blue dropping faster
than the higher time frame in black. I see this as a good setup for a short trade
that could yield half of the run-up over the next two trading days or 5% by
next Tuesday, August 1. The stop loss set at the top wicking at 17.25 while the target
the pivot low from which price began at 15.55. I have contemplated a put option
on this but have not yet reviewed the options chain. Price action down may begin
slow until price crosses under the POC line of the volume profile and then accelerate
as price drops below the high volume area into relative volume voids.
MYO can Myomo continue the push to the earnings report?MYO had impressive week gaining over 35%. It is a volatile penny biotechnology stock
with good earnings back in November new due for another report. On a 120 minute chart
with relative volatility and volume indicators and a volume profile added. The volume and
volativlty of this past week's move is obvious. Price gain has slowed on the approach to the
POC line of the volume profile which appears to be resistance. Price may break that resistance
but could get rejected there. I plan to buy MYO long on a break of resistance with
a buy stop set at 4.04 and a stop loss at 3.96. If MYO rises and gets over 4.04 the order should
fill and if it retests the POC line as support and the support fails, the stop will close the trade.
My expectation however is for the earnings run to take it to the level of the pivot high
in early January for a 25% gain.
Can INTC breakout from a trinagle ? LONGINTC on a 180 minute chart is in a flat bottom triangle since before earnings. The earnings
report was a beat of 20% on earnings and 1.5 % on revenue but apparently disappointed greedy
traders expecting more. Price has been mostly sideways. I saw the dip on Tuesday to Thursday
as an opportunity to take a call option trade for Friday which had a great return. I see INTC
ready to gain price and break out of the triangle. It has a P/E ratio much lower than some of
the high flyers in its subsector making it attractive to value-seeking investors and traders
who like to buy at the lows. Price is now above the long-term POC line where buying pressure
should predominate. Having seen the rise on Friday, some short sellers may begin to buy to
cover and close their positionons especially those with put options from which the time to
realize profits is now.
GLD , the gold futures ETF LONGGLD is shown on this 240 minute chart with a falt top triangle drawn with upper and lower
trendlines for resistance and support. A volume profile is overlaid. Text boxes comment
on the basis for the trade and the use of the relative strength indicator. Price is low
in the high volume area confluent with the support line. I see this as a long trade set up
and ready to go. Zooming into a 15-50 minute time frame will help find the best entry.
The RSI indicator would need to have its time frame settings adjusted I typically use
one half the chart time and twice the chart time to get a decent time spread,
Gold is forecasted by some to reach $3000 spot price in 2024. Gold and Bitcoin compete
for dollar attention. Things will be interesting for sure.
BA Trade Setup into Earnings by Fib Retrace / Volume ProfileBA is shown on a marked up 120 minute chart with a Volume Profile and Fibonnaci retracement
levels as well as the trend angle reversal at the consolidation upon finding support at the
bottom of the high-volume area of the profile. The fib levels suggest targets. Risk in the trade
is after earnings reports of "beats" will drive the action higher or "misses" will cause a down
trajectory. Volatility will increase as the earnings date quickly approaches. Some traders may
want to close a winning trade just before earnings or take a predominant partial close leaving
the the rest to move through the storm looking for blue sky.
I have a risk appetite here. I will take call options for February 5th striking OTM at $240.
I will cut them no later than 24 hours before earnings or when they hit 200% if that happens
beforehand.
CAn Boeing weather the storm BA LongBA on a daily chart is trading in the bottom portion of its intermediate-term trading range
having incurred a series of adverse news catalysts, FAA investigation and loss of trader
sentiment. It is now in the lower portion of the high volume area and below the POC line.
There are multiple touches of a horizontal support before and after a big earnings beat.
The question now is whether BA can mount a good fibonacci retracement of the prior
downtrend. I believe that it is quietly acumulating volume and shares at a given price for
a solid base from which to make a trending move upside to the Fibonacci levels on the chart
and perhaps in time after another good earnings head toward the pivot high of last year.
I will go long from here finding good cause to buy at this discount.
ADA/USDT Trading ScenarioBelow is the price movement scenario for ADA.
After significant consolidation of the asset in the price range between the support level at $0.2327 and the resistance level at $0.4582, an impulsive breakout of the resistance level at $0.4582 occurred at the end of 2023. This caused a subsequent establishment of a local maximum at $0.6883.
Despite the overall positive trend in the cryptocurrency market and steady growth of BTC, the asset experienced a correction, dropping by more than 30% and testing the broken level of $0.4582. This was followed by an attempt to rebound; however, from the volume profile perspective, the asset encountered volume resistance.
We expect further development of the scenario for acquiring the asset. In case of a decrease in the asset's price and subsequent retesting of the resistance level at $0.4582, as well as holding this level, together with the shift of the global POC to this mark, we will begin to form positions with further holding.
Novavax- NVAX- Medical Technology Vaccine Focused LONGNVAX on the 15 minute chart has been compressing price action volatility into a symmetrical
triangle. It in now in a breakout of the triangle and in the process when from undervalued on
Monday to the upper trendline and then down to the support trendline and then up again.
It passed through the volume profile and its high volume area. In short, it has bullish
momentum capped off with a breakout from the high volume area into a bullflag to rest the
weekend. I am in this stock going and now is an opportunity to add to the position. If a trader
wants to know what I consider to be targets upside, let me know. Medical technology is
expected to be among the hottest of subsectors for 2024. NVAX has been beaten down. I
believe it has significant upside for the long term. in the short term, earnings are expected
on February 28th so this is a trade to consider on that run up. Call options for March 2 or March
16 can be considered.
BOIL 3X / Triple Leveraged Natural Gas ETFon the 4H chart is showing a round bottom reversal at the bottom of the high voume area
and rose over the POC line of the intermediate-term voume profile. Price now has room for
a 50% move to the top of the high volume area at $ 52. The chart shows the relative
volume indicator supports a long buy as does the dual time frame RSI.
A speculative call option trade would be $60 in 4 months while a safer call option
would be in the money @ $30 in 7-9 weeks. I am also looking at UNG, LNG and XNGUSD on
forex.
UNI/USDT - Long and Short PlaysNot really sure about this one, as I'm expecting BTC to do a fat ABC retrace after the Elliott Wave that recently finished playing-out (see last two posts) - If BTC does retrace, ALTs should follow.
Ignoring all timings. I'm only focusing on the Elliott Wave counts and any confluence.
For UNI/USDT, I've got 3 x Elliott Waves to give me short, medium and long terms plays in both long and short directions.
Red EW- Long term (1D).
Blue EW - Medium term (4h).
White EW - Short term (1h).
Short term - White EW
Assuming we've already bounced off the white wave-4, I'm now looking for price to tap wave-5 @ 2.618. However, if wave-4 hasn't hit yet, price could first come down as low as the white wave-1 peak.
Medium term - Blue EW
After the blue wave-3 gets tapped @ 1.618, we should retrace to create wave-4. This could be as low as the blue wave-1 peak.
Once wave-4 is complete, we should head up to wave-5 @ 2.618.
Blue wave-5 also aligns with the Point of Control (POC) on my Volume Profile.
Long term - Red EW
After we retrace from Red wave-1 to wave-2, price should back head up to the red wave-3 range @ 1.618.
I think UNI will top at the red wave-5 range @ 2.618.
Red wave-5 also aligns with the Value Area High (VAH) on my Volume Profile.
I put a fib extension on my Volume Profile:
Red wave-3 taps the Volume Profile's 1.618.
Red wave-5 taps the Volume Profile's 2.618.
Let's see...
GRPN on a one month breakout LONGThis is to follow up my previous idea on Groupon. On the 2H chart, price is in a one month
sustained breakout from the volume profile and into the upper VWAP band lines both anchored
for end of 2023. The faster green RSI line crossed the 50 about the same time and basically
has not looked down. The slower RSI line has slowly risen from 55 to 65. This is in the consumer
discretionary sector and hot necessarily hinged to technology stocks. I see this as rock-solid
as it gets. I will load more shares now and also load more ona dip There was a big earnings
miss in November and then Goldman Sachs raised its target from 5 to 7.5 which seems like
a big adjustment after an earnings miss. I suppose GS knows their stuff.
FXS/USDT Speculative TradingBelow is a speculative deal on FXS/USDT.
After the consolidation period, the asset has begun to demonstrate an upward trend, showing a strengthening of its position in the market. During this period, the asset's price bounced off the inclined support level three times, indicating strong buyer interest at this level.
As of writing, there is a consolidation phase around the Point of Control level, which may be a sign of a temporary slowdown and accumulation of positions for further movement. At the same time, a clear support level has formed at the price of $10.916, which has already been approached three times.
Such price movements can provide opportunities to enter the market.
At the current prices, there is a possibility of buying the asset with subsequent holding of the position in anticipation of overcoming the resistance level at $10.916 and further movement towards the $12.416 mark. The expected growth will be more than 30%. If the trend strength and positive market dynamics are maintained, we plan to hold part of the position for further participation in the movement.
Elliott Wave Analysis with Volume Profiles and Open InterestMYROAnalysis. eliott wave: the price action conforms to elliot wave theory, suggesting a potential bullish move with the completion of wave 5. volume profile (January 38th - february 3rd) the initial volume profile indicates that the price has previosly visted the point of control (poc), and it appears to be retracing towwards the upper 70% line, which could serve as oyr TP3. Volume profile (february 2nd-february 19th): the subsequent volume profile suggest that the ptice is finding support around the 70% line, this support level has also acted as resistance in previous instances. Openinterest: there is a bullish and green candle observed in the open interest data, indicatng potential bullish sentiment.
LABU / LABD Ratio Anchored VWAP over /under LABU LONGOn the weekly chart a LABU / LABD ratio is plotted with anchored VWAP bands and a volume
profile overlaid. I wanted to analyze this to affirm the highest of prospects for the
Biotechnology sector for 2024. LABU is triple leveraged Up while LABD is the inverse Down.
A good unleveraged biotech ETF is XBI. The chart shows LABU in a VWAP band and breakout
through the hohg volume area and then over it beginning early November. Unusually high
relative volume and volatility ramped up about the same time.
I readily conclude that LABU is the buy right now with the ratio rising. It is a low beat ETF
with good range due to the leveraging and high forecasts for 2024. I will make buys on
LABU at regular intervals on a 60-120 minute time frame looking for the weekly lows.
I will set an alert for a falling ratio on the 3H to daily chart to assess should the supertrend
fade. I believe that this will be a safe low risk swing long trade.
ROKU runs to Earnings ROKU on the 15- minute chart with an overlaid volume profile and anchored VWAP bands
demonstrates a high volume area breakout on Tuesday last week having passed through the
entire high volume area bottom to top the previous 24 hours. On those days it had a burst of
volume. The volume is constant and consistent. Earnings are in two days. More volume
spiking has been seen in the last trading session. I see this as an excellent long trade setup
as a swing trade for the rest of the week into next if the earnings are better than they were
last November
Could TSLA short squeeze? LONGI have had two TSLA puts that have performed well. One was liquidated today to buy
a call optio. I may do the same thing to finish out the trading week. TSLA for one reason
or another while Musk announced he wants more shares from the board and pricing was
modified in Europe has stabilized its price in the market over the past 3-4 trading days.
Price is sitting one the support of a POC line from the intermediate past trading sessions.
Given the volatility and volume that TSPA commands, it is possible a short squeeze could
set up as shorts buy to cover having seen the consolidation at the bottom. New buyers
may see and entry and synergy might make for a decent uptrend. Time will tell.
I am a flip-flopper here but I see good reason to go long on TSLA at this time. I have drawn
in some horizontal pivots as reference points and will take partials along the way.
CHEF rises in price and volume for earnings LONGChef's Warehouse reports in two days. This is a slow grind it out type of stock. In the past week
volume spiking is seen on the indicator with the blue bars pointing out aberrancies in volume
otherwise called spikes. On the volume profile, CHEF fell down and out of the high volume
area of the profile for much of February but on Thursday the 8th re-entered it and pass through
it and breaking above it all in the same day. This is a rather explosive reversal pattern.
Price has maintain itself above the area in the past two trading session. The past week saw
more than a 6% rise for CHEF. This trade is best suited for investors, patient swing traders
or those trading options. This is not an intraday stock trade.
Groupon is pushing into earnings LONGGRPN on the 15 minute chart here with a volume profile overlaid hada high volume area
breakout from mid December to mid January but then retraced and broke down. It
consolidated for one week about the POC line gained some accumulation and then moved
back up again. It broke above the high volume area on January 25th then retested it with
a light touch on Feb 5th getting support in the rejection. The relative volume has picked
up consistent with Wychoff theory ( this is not a fakeout). I see this as an excellent long
trade through the upcomng earnings. The dual time frame RSI indicator can be useful to
gauge strength minute by minute and so pinpoint entries and exits.
HE - get it long before the sparks flyHE is obviously an underdog given what happened in Maui and the aftermath of the disaster.
It has that baggage and the ankle weights of litigation public perceptions, electical power
infrastructure and all the rest. Seemingly it is weathering the storm.
The 15 minute chart shows a ranging price action really going no where until last Friday when
volatility struck from a surge of volume. Price jumped out of the high volume area and volume
has persisted and so the high volume area widened. The fast RSI in green moved in quick
momentum as compared with the slower RSI in red. This is a golden cross of the lines showing
a surge of strength. I will take this long. The earnings announce BMO. The make the past
possible trade it must be done in the premarket and without a stop loss since my broker does
not offer them in the premarket. An options trade will be after earnings depending on what is
reported. This is a risky trade so the position will be small relative to buying power.
Can FSR move higher? LONGFSR on the one hour chart fell from a triple top in mid July into the lower range
of the volume profile's high volume area then bounced higher in a series of higher
highs but then rolled over and fell again/ It has consolidated sideways about
that POC line and now is above it. The indicators including Directional Index
Zero Lag MACD and dual time frame RSI all indicate a return to bullish momentum.
I will take a long trade the horizontal levels on the chart served as tiered targets
for a risk managed trade. I will take some call options contracts as well. I think FSR
may follow the market leader in TSLA for a bit.