All language subtitles for 2. Rotation patterns

One of the uses we can make of the
volume profile is to analyze it

its distribution over the candlesticks
to identify price rotation patterns.

This is especially useful for a scalping
or day trading trade where we are

analyzing and trading in lower time
frames.

We will return to the previous chart
where we showed the profile within a

candlestick and we will explain the
details of each individual action.

In candlestick number 1, we can already
see the exhaustion of the sales.

as evidenced by the small shift that it
has, and it is already beginning to show

a possible absorption of the sales by
the location of the VPOC.

If the candlestick is bearish, but the
high is in the lower third, this

that there may be passive positioning in
the opposite direction.

A good bearish candlestick should have
the high trading point at the top.

This is what we should treat as the most
genuine behavior and what would allow

us to identify such behavior as
harmonious.

In candlestick number two, we see an
even more obvious action of possible

absorption.

It is a wide candlestick that manages to
close at the bottom of the candlestick

where a large volume was traded.

But how curious that most of this volume
is at the bottom of the candlestick,

distributed at different price levels.

This is an even clearer sign of possible
absorption.

The most significant reading of
candlestick number three is that it is

After observing that candlestick number
2 was traded on high volume and the

reaction of the next candlestick is to
the upside, this is another sign of

divergence and begins to suggest that a
market bottom is likely to form.

On the fourth bar, we see the same
action again.

This candlestick even breaks the low of
the previous candlesticks in the form of

a jerk and quickly reverses, leaving a
large wick at the bottom.

It is also accompanied by relatively
high volume.

and is again located at the lows.

The fact that the volume trades mainly
on the lows of the candlesticks and that

the VPOC is also located there is a very
strong signal of possible absorption.

But as we know, passive positioning is
not enough to turn a market.

Aggressive positioning is needed.

And that is exactly what is happening on
candlestick number five. A strong

appearance of buyers after the takeover
finally causes the price to move quickly

higher. This example is particularly
visible because it shows the price level

which this buying initiative takes
place, a very real behavior at the

level of what is a market turn by
analyzing the price action and the

profile.

We return to this example to observe the
same thing but with a different tool,

in this case the periodic volume profile
configured by candlesticks from

TradingView.

Candlestick number 1 is the first signal
that alerts us to a possible reversal.

The fact that a bullish candlestick with
a good displacement and closing on the

highs leaves the VPOC located at its
upper end is a divergence that could

suggest us the first entry of the bid to
stop the upward movement.

Action that we confirm with greater
confidence if we look at the second

candlestick. In this case, it leaves a
prominent wick at its top, identifying a

clear refusal to trade at these prices.

In addition, The fact that the VPOC is
also above the closing price is another

sign of possible absorption.

This bearish reversal action as a whole
is confirmed by the appearance of

candlestick number 3, a candlestick that
denotes great weakness, with a good

displacement, closing at lows and whose
VPOC position suggests there was

continuity in the movement.

This is the representation of a
candlestick that indicates harmony

action and volume.

Regarding the bullish reversal,
candlestick number 4, although it is

it seems to denote a lot of weakness
because of its huge displacement, it is

curious that the VPOC is at the bottom.

This kind of traces is very interesting.

What it suggests to us is that it has
reached a sufficiently attractive level

for buyers who have begun to position
themselves.

A small aside, at the level of VSA
analysis, These types of very large

candlesticks usually alert us to a
possible positioning in the opposite

direction. They are very extreme
behaviors whose rapid movement usually

the interest of the opposite side of the
market.

What happens after seeing such a
candlestick is key to anticipating a

reversal.

In candlestick number 5, we again see a
potential absorption of the sell -off

due to the VPOC at the lower end and the
WIC at the lower end.

Candlestick number 6 is a candlestick
that might initially make us doubt that

possible bullish reversal is being
prepared.

It has the VPOC at the top and has a
bearish continuation.

The market loves to give false signals.
In this type of situation, we need to

open the context and prioritize the
development as a whole rather than a

particular candlestick. It could be a
sufficient representation to quarantine

the scenario.

But what happens at candlesticks 7 and 8
is that they again alert us to a buying

presence through passive positioning,
and candlestick 9 and 10 definitely

confirm the rotation.

Candlestick number 9 leaves the first
appearance of buyer aggressiveness, and

the next candlestick confirms this
action by stopping the fall at the same

of the VPOC and generating the upward
imbalance from there.

This is another interesting footprint.

Many times the VPOC levels will be
tested next to really assess the

in that direction, as is the case with
candlesticks 9 and 10.

Remember that the VPOC is also used to
determine control in the shorter term,

in this case the fact that the price did
not break this level suggests to us

that the presence of traders with
bullish interests is predominant.

Finally, in the subsequent bearish
reversal, we observe traces of passive

positioning in candlesticks 11 and 13,
mainly due to the position of the VPOC

and the Wix at the top.

Again, we find false signals in
candlesticks 12 and 14, whose VPOC and

the bottom might suggest some underlying
strength.

This example is perhaps a bit more
complex to read correctly.

In this case, it would define the
appearance of the cell initiative,

in candlestick number 16, which leaves
the VPOC in the upper third and has a

large bearish continuity.

In any case, it is important to
emphasize that many times we will not be

read the market action correctly, or we
may have enough doubts about what is

most likely to happen.

In these cases, it is important to
realize that the best thing to do is

The main goal of a trader or investor
should be to preserve his capital. So,

a somewhat diffuse scenario, the best
thing to do is not to trade.