making traders expect a bullish continuation. However, the market fails to sustain higher prices and quickly moves back into the value area.
What does this tell us about market acceptance and rejection?
Can Market Profile concepts such as VAH, VAL, Point of Control (POC), Initial Balance (IB), and poor highs or lows help identify potential reversals, breakouts, and trading opportunities?
Let’s discuss how to interpret market structure, recognize acceptance versus rejection, and use Market Profile to build a logical trading plan with clear entry, stop-loss, and target levels.
Fast moves out of value that fail lead to fast moves to the other side of value.
Don’t chase breakouts blindly. Wait to see if time builds outside the Value Area. If no time builds, trade the move back to POC.
I usually watch how price behaves around VAH and VAL. If price breaks above VAH but quickly falls back into the value area, I’d look for a short setup once it shows weakness, with a stop above the failed breakout high. Similarly, if price breaks below VAL and reclaims it, I’d watch for a long entry. POC can act as a target when price moves back into value. For me, we should wait for confirmation and avoid trading every breakout.