Original subtitles

One problem with plotting profiles in structures has to do with how these

profiles are updated.

That is, at what point should we determine the end of the plot and when

we update it again?

The key is that as long as the market remains between the upper and lower

of the structure, the volume profile should be continuously updated until the

last candle stick on the chart.

And if we are using fixed range profiles, this update will have to be

manually. As we have already mentioned, the last point to which the profile is

plotted is until the time of the breakout.

But what happens if the price leaves the breakout move as a failed breakout and

then trades back into the previous sideways move?

This is exactly what happens in this example.

The end of the profile will be right at the moment of the bullish breakout of

the structure.

After this event, the market generates a small sideways movement above these

upper levels of the structure.

But eventually, the selling pressure forces the price back into the sideways

movement.

Until then, there is no reason to change the profile, as we know that the price

could react on the value area high or on the VPOC of this structure.

A priori, it does not seem that this price action that generates the

breakout movement is actually a real breakout.

But we cannot really know. We have to leave it to the market to confirm our

suspicion. And how do we confirm this?

by waiting for at least one sideways move below the VPOC.

At that point, we will have to update the profile down to the last candlestick

shown on the chart and continue until another breakout above or below the

structure occurs.

The rule will therefore be that the moment the market actually breaks below

VPOC, we should update the volume profile to include all the price action

caused the failed discovery.

This is what the volume profile with the bullish false breakout would look like.

In most cases, the trading levels of both profiles will not vary much, as in

this example, where the VPOC stays practically in the same place.

Some traders uptrade the profile as soon as there is a re -entry into the range

after the potential breakout.

But as I said, at that point we have no confirmation that we are actually

looking at a breakout.

Both scenarios should be considered.

That's why those who decide to enter after the range re -entry, expecting the

market to visit the opposite extreme, should do some management once VPOC is

reached, because until VPOC is definitely lost, the continuation

remains in place.

In terms of trading term principles with value areas, upon re -entry into the

range, we trigger the reversal scenario, but we know that upon reaching VPOC,

there may be enough reaction to trigger the failed reversal principle.

Once the loss of VPOC is confirmed, we assume that all the recent behavior must

also be included in the profile, so we continue to update it.

In this example, it finally broke its bottom and generated several tests on

value area low before continuing the imbalance to the downside.