Original subtitles

The point of control, this is the single

price level with the highest traded volume

in a session or profile. Now this level is

best used in conjunction with other

confluences rather than by itself. That's

an important note to make when you are

going to use and trade the point of

control, as opposed to using value highs

and value lows. You want to have a bit

more context around the point of control

instead of just blindly trading it.

Because in its nature as the fairest

price, the point of control often has a

lot more what we would call noise or back

and forth action. But the point of control

can be used in multiple ways. So the first

way to use it is as basic support and

resistance for a quick reaction. So as

price moves towards the point of control

from above, you can look to use it as

potential support. As it moves towards

point of control from below, potential

resistance. Now this works best in

rotational markets where value is holding

steady. The second way to use it is to use

it as a retest area after a breakout. So

if price breaks above or below the point

of control with some sort of momentum,

then returns to test it, we can use that

retest to confirm the breakout. So a basic

example on the right here, we have the

previous day's point of control. During

the overnight session, it held below point

of control as it came up to retest that

previous day's point of control level.

That is where you can get a good short.

And whether you take that for a quick

trade or you held that for longer, that is

an example of using point of control as

resistance. As it broke below. Now there's

many ways you can use the point of

control. But again, this one must be

paired with some other sort of confluence

ideally. Because using it alone will not

fare well over the long term simply

because of its nature. Now why does the

point of control work as an area of

potential entries? Well, because of

auction market theory, the point of

control is where buyers and sellers agreed

most during the auction. Therefore,

there's heavy volume. And heavy volume

means lots of open positions. So

participants often will defend these

levels. And you're bound to get some sort

of reaction at point of control as price

approaches that level. The second reason

is order flow. A lot of transactions occur

at the point of control, which means a lot

of stop orders, a lot of take profit

orders, and a lot of resting liquidity are

often clustered around that point of

control level. So when price returns,

these resting orders often create friction

that slows down or temporarily reverses

price, therefore acting as either support

or resistance. Again, giving you pretty

high chance of getting some sort of

reaction at the point of control. The last

thing is the memory of the market.

Traders, remember the fair value area. It

is a very, what we would call, high

attention level. And if price moves away

and then returns to fair value, many will

use the point of control as a decision

point for either re-entering or exiting.

So point of control can be both a great

take profit or exit level for your trade,

or with the right context, a great level

to enter a trade. So it's one of these

levels you're going to want to pair with

extra confluences, which is why the next

module we're going to go into is how to

find extra confluences. It can be an

extremely powerful and potent level to

trade. You need to be able to have some

sort of context around it for using this

level to trade. But it's important to know

why point of control is so important and

why it is such a powerful level. But that

is the last basic setup that you will come

across using the volume profile. And

you'll be using a variation of all three

of these setups for every single trade you

take using volume profile. So those are

the basics. Now, of course, you don't want

to just come in and trade these levels

blindly. Of course you can because you're

almost certain to get some sort of

reaction around these levels. However, to

make it truly work long term, you're going

to need to build extra confluence and

context. So the next module will go into

how to do this and how to actually wrap

this up into one package and how to hunt

high probability setups using these

concepts. So go ahead and move on to the

next lesson and let's get into adding

confluences in context.