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The next confluence we refer to as
reinforced levels. A reinforced level is
when a high volume node develops directly
on or adjacent to a key volume profile
level. And what this is doing is
indicating market acceptance of that key
price level. Now when price breaks away
from this reinforced level, we can more
confidently use that level as support or
resistance on the retest depending on
which side price breaks. So if we look at
the example on the right here, we have the
white dotted line which is the previous
day's value area high. And what we have
here, this profile is our developing
session profile. And you can see that we
have a high volume node here developed
right across the top of the previous day's
value area high. So it's created a bit of
volume here earlier in the session. It's
broken down, come away from that level.
Price is now trading below the previous
day's value area high. When price comes
back up to test that previous day's value
area high, we can now more confidently
trade and take a short from this level
being as we're coming from the underside.
Because the previous day's value level has
been reinforced with a high volume node.
So we see when price came up here the
first time, tapped the previous day's
value area high. Tapping also the high
volume node highlighted in green. We get a
first short play there. Then it comes up
again, trades into the previous day value
area high and into that high volume node.
And then if you have a sharp eye, you'll
notice a third confluence here as well,
which is the session value area high. And
then it comes off and trades down to the
downside again. So this is another key
confluence you can look for is watch for
the high volume nodes in the developing
profile. Watch for them to develop around
any value level from past data and use
that as an extra confluence to turn a C
trade into a B trade. And then try and
find that third confluence to turn it into
an A trade. Because remember, recent high
volume nodes when traded back towards
often cause price to slow down, bounce or
reverse. And when lining that up with a
logical value level gives you good reason
to trust the trade when these develop. So
that is how you find reinforced levels.
Now let's move on to the final confluence,
which is all about building context around
the auction.
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