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We will now look at the last use of the volume profile in terms of calibrating

position management, profit -taking.

For profit -taking, we will mainly look for those levels or trading zones that

indicate interest or acceptance by participants.

As we have already mentioned, these are the high pre -trade zones and the VWAP

levels. Both create an attraction on the price and this magnetism makes them

excellent locations for profit -taking.

As we have seen, A very important use of the visible range volume profile, which

shows the volume distribution of all the price action we observe on the chart,

is to identify large volume nodes from a bird's eye view.

The basic idea of these acceptance zones is that since they are expected to

attract some price, the market may continually rotate between them, making

excellent areas for establishing profit taking.

This means that if we are at any point on the chart, We can use this analysis

identify the volume node immediately above and below us and use it to place

profit taking there.

Imagine that we are at the point I have marked, within the volume node where the

cause of the next trend movement is being built.

Now, if we confirm that the effective imbalance will be generated by the top,

the market will most likely go for the volume node that is more immediately

above.

Similarly, if the imbalance is seen to be occurring at its bottom, it is very

likely that the market will visit the volume node located at its bottom.

The previous example is useful when we have references, when we have already

developed such high volume nodes.

But what happens if we do not have such references?

This is what happens in this example.

The market generates a distribution and we do not observe any volume nodes on

the downside, mainly because the upward movement was very fluid.

Or, You may even find yourself in a context where the price is trading at

historical lows and there is absolutely no reference to take.

In this case, you could take profits according to the principles of another

methodology you are using, but if you are only using the volume profile

levels, we can use the VWAP deviations for these cases.

Here we have the same chart showing the second negative deviation of the weekly

VWAP. As we can see, after actions that leave us with short entries, The price

will look for this deviation before generating a corrective upward movement.

Obviously, this is not the best way to take advantage of large trends, but it

certainly effective for short or medium -term trades where we are trying to take

advantage of trend movements of shorter duration.

Here is an example of intraday trading with session profiles.

After the buy entry and stop loss placement, we identify the volume node

top of the previous session.

This would be a good point to take profit.

It does not have to be the entire position.

It could be a partial profit -taking while letting the other part run to

targets. The key is that when a break -even zone is reached, it is convenient

do some kind of position management.

As a low, we should protect it and move the stop to break -even.

Another more complex example, the market generates a sideways movement at the

top that creates a bearish trend movement.

This movement is stopped with the appearance of a B -shaped profile.

followed by another profile that overlaps the value areas, and finally

-shaped profile that finally defines the bullish reversal pattern that we

studied earlier.

After this, the market begins to move higher, and the P -shaped profile is

positioned above the value area.

In this bullish context, we should start looking for potential buying

opportunities until our entry trigger finally appears with this bullish

candlestick. We set the entry and stop loss orders according to what we have

learned. and now it is time to determine the location of the take profit.

Obviously, we do not see a high volume node in the immediate vicinity of the

current price, so the most logical thing to do at this point would be to place

the take profit in the lateralization at the top of the chart.

As we can see, this lateralization covers three different profiles, which

us wonder where exactly we should place the take profit.

In this type of situation, it would be best to draw a manual profile that

the entire sideways movement.

This way we would have a single large value zone that would identify the

trading level, and it would be there, in the VPOC of this manual profile, where

you should set the profit taking.

Technically, I recommend placing the TP a few levels ahead of the exact level

that determines the VPOC.

Sometimes you will see that the VPOC is missed by a few ticks.

This is because we actually want to take advantage of the magnetism exerted by

the entire volume knot, not just the VPOC in isolation, but the area to which

the VPOC belongs.

As mentioned earlier, we need to treat these levels as zones.

Let's take another example.

Short entry after a rejection at a low volume node.

After setting the entry and stop loss orders, we identify the high volume node

at the bottom, which should be used to do some kind of position management on

it. take partial profit or at least protect the position.

This range trade is a bit more delicate.

In this example, we enter the market to buy after the rejection of the price

above the low volume node, which is located below the value area low of the

profile.

The problem with this type of trade is that the entry is inside the value area.

And what happens inside the value area is that the equilibrium is such that

there is an equal probability that the market will go up or down.

This is assuming that the valuations of the participants have not changed,

because if they have changed, and at the aggregate level it is considered that

price and value at that point no longer converge, the market will necessarily

start an imbalance in search of a new value zone that generates a new

between the participants.

This is what is happening in this example.

After the rejection from the downside, the market starts the imbalance from the

upside, and, of course, this imbalance must first go through the entire value

area of the profile.

So in this context, there would be no big problem to take the trade.

The problem is that we will always have this dilemma because we cannot know in

advance if we are really facing the event that will cause the market

We will always have the doubt whether the market is still in equilibrium or

In any case, and under this premise, What we have to do then is to manage the

position more aggressively.

Since we know that in a market in equilibrium, the price is most likely to

between the extremes of the value area, the most conservative assumption we will

make in this particular example is that it is most likely that the market will

react after reaching the upper end of the value area.

With this baseline scenario, we will take partial profits there or at the low

end and protect the position at break -even.

That is the key.

We're not dismissing the opportunity, but we're managing it more aggressively,

as if the trade were range -bound and not trend -bound.

We will talk about this later when we present the principles of trading with

value areas.

Ultimately, this type of trading has a higher risk, but also a higher potential

for profit.

If we are right and it is the total imbalance of the structure, the profit

potential will be relatively high.

On the other hand, If we are wrong and the market is still in balance, we will

protect ourselves with more aggressive management.

In this other example, we would have long entry on the test at the value high

area of the lower sideways.

It leaves a good bullish candlestick that would activate the entry trigger

we would set the stop loss just below the low of the pattern that identifies

entry signal.

In this case, we cannot move the stop loss location much further away as it is

relatively close to the VPOC of the lower structure.

In fact, the current stop -loss location would already be within the value area

of that profile, so it is not a location we are very comfortable with.

The problem is that there is no more suitable location that allows us to

maintain a controlled risk.

These situations will arise at other times. The key here for stop -loss

placement is to rely on the end zones of the two profiles.

Both extremes of the profiles identify a rejection zone.

so we have no choice but to rely on their strength.

Regarding the take profit, it is the right situation to zoom in and analyze

overall context through the visible range profile or view the manual profile

that we have previously pulled, as is the case.

Fortunately, we have a clear reference to the left of the price, so we will use

the high volume node of that profile for the take profit location.

Again, you can decide to take profit on part of the position or close it

completely there.

Finally, let's look at another example of profit taking in the VWAP.

In this case, it is the monthly VWAP.

The VWAP is a very important trading level that also allows us to get a sense

the anatomy of the trends based on how far the price is from the VWAP.

In this case, as we can see, the price is far away from the monthly VWAP.

This could be a fingerprint that tells us that the trend movement could be

overextended, which puts us in a position to favor a reversion to the

If we have managed to enter one of the market trading zones, a good place to

take profits would be when the price reaches the VWAP zone.

We have already talked about creating a position management where partial

profits are taken when a trading zone is reached and the rest of the position is

left to run.

Well, part of the position could be left open until it reaches an area further

away from the price, such as the VWAP.

As we will see later, the magnetism that the VWAP exerts on the price is

confirmed with this test that occurs to give rise to the continuation of the

bearish movement.

For more intraday trading, it can be very useful to identify the developing

volume point of control.

These are price levels that were the VPOC of a session at a given time.

whether or not they were the final VPOC of that session.

To have them displayed on the chart, we simply go to the Style tab of the

session profile and check the Developing POC box.

As we know, the VPOC of the session changes based on the trades that are

and this level represents the footprint of that change.

In this example, we see the price being attracted to these levels, virtually all

of which are being tested.

This is normal because we are dealing with a level that has been traded a lot

and is therefore likely to have some magnetic behavior.

The highlight of these levels is that we are only considering those that have

not been tested.

The same is true for naked VPOCs.

Naked VPOCs are VPOCs from previous sessions that were not tested.

Unlike DVPOCs, naked VPOCs were the last VPOC of the session.

To include them in the chart, we simply go to the Data Entry tab of the session

profile and check the Expand POC box on the right.

There is a statistic that VPOCs from previous sessions have a high

of being tested in the following days.

Therefore, they are very interesting to consider.

In this example, we see the magnetism of these levels attracting the price and

even generating a subsequent reversal.

Especially useful, as I said, for intraday trading.