Original subtitles

This is one of the great puzzles for the trader who combines structure analysis

with volume profile.

On the one hand, we know the importance of trading levels, which identify the

extremes of the structures.

These price inflection points generate the creation of the most important

trading areas in the market, based on the principle of auction and

between agents, the liquidity zones.

As we already know, these areas are expected to generate imbalances between

supply and demand that can provide us with trading opportunities.

On the other hand, as we have just studied throughout the course, we know

importance of volume in today's markets, how more and more large traders are

using trading levels to place their orders, thus creating new areas of

where imbalances are also expected to occur.

With this in mind, it is logical to ask which levels are more important, those

of the structure itself, or those of the volume profile?

The answer, not surprisingly, is both.

Both levels create areas of liquidity.

Both levels create areas of potential imbalance between buyers and sellers.

In short, both levels create areas that can provide us with trading

opportunities.

Therefore, it is best to have identified all these trading levels in order to

make our decision based on them.

Ultimately, the price will confirm which level is more important in this

particular market condition.

We should not get ahead of ourselves. Our way of reading the market is

and here lies the importance of the appearance of our entry trigger as the

trace of the intention of the big traders in that direction.

To give an example, if we are in the midst of a potential bullish breakout,

job as analysts is to identify the operational levels below which the price

likely to fall in order to perform the confirmation test.

In this case, these will be the structure's creek.

the former resistance that now becomes potential support, and the volume

profile's value area high, the trading level that corresponds to the upper end

of the value area.

Once this is done, we just need to analyze the market action at these

levels and look for the entry trigger.

The price could reach our first trade level and not develop the trigger and

instead visit the second trade level below, which it may or may not do now.

There is no one level that is better or more important than the other.

At times, and due to market conditions, the imbalance will be at the structural

level, while at other times the volume profile will be more important.

It is not a question of guessing, but simply following the price.

The problem that can be posed now is what sentiment the market will leave us

with if the price goes for the value area high instead of the creek.

At that point, the market will have already crossed the level of the

and visually it could look like we are facing a false breakout, or upthrust,

rather than an actual breakout.

What do you do then?

First, try to analyze as objectively as possible the market's previous behavior

and the traces it has left behind.

Evaluate whether it provides the best possible context based on our trading

checklist, and if so, simply wait for the price reaction at the value area

If your entry trigger appears, you should take the trade.

But as is almost always the case, There are other alternatives.

If you do not have the confidence in the trade because you have crossed the

creek, wait for a second entry after the creek has recovered.

In other words, only evaluate the possibility of entering the market after

have seen the first reaction at the value area high that pushes the price

out of the range.

From there, you can either wait for a new trigger to appear or enter the

directly.

Another option is to use active pyramid management.

If our entry trigger appears above the value area high, we will enter with a

percentage of the total position there, and if the price breaks the creek again,

we will value to complete the total size of the position.

Here, we see a real example where after the bullish breakout, the market slowly

pulls back to slightly re -enter the value area, from where a new reversal

is generated that sends the price out of the range.

After this new bullish reaction, The price develops a test on the creek of

structure, determined by the high that established the automatic rally, and

there generates the bullish imbalance out of the range.

In this example, it does not leave a clear entry in the test above the value

area high of the profile as it penetrates inside the value area.

But we know that the last level that could save the scenario is the VPOC.

Therefore, as long as the price remains above the VPOC, we should not abandon

the bullish scenario.

As it can certainly be risky to buy in these range re -entry situations, it is

best to wait for the price to develop something like what happened here, and

that is that the market reacted to the upside and positioned above the creek,

giving the signal to go long.

And in this other example, the same thing happens, but in reverse.

After the bearish breakout, the market pulls back to the low of the value area,

where it is blocked from moving higher and generates a new bearish turn.

The market then begins to fall and returns to the position below the low of

structure that was established by the selling exhaustion.

It may be that you are not confident enough to enter on the first test of the

value area low, or that it does not leave a tradable entry trigger.

The key is that we have a second opportunity after observing that the

comes back below the low of the structure, at which point we should wait

price to develop a test of the level, as it does.

The final reading is that there is no level better than another.

We must take them all into account because we do not know which one the

will use to generate the imbalance on it, if it generates it on any.

Our job is to raise all the possibilities and let the market