Original subtitles

The next confluence we use is we look at

developing value. So we use multiple

profiles to help determine our bias and

which trade direction is more probable.

This should be the final confluence for

any trade that you take wherever possible.

Look for things such as where is the

current session's developing value area

relative to yesterday's value. And that

could be either the regular trading hours

or the overnight profile. Where are the

high volume nodes aka pockets of value

developing relative to the previous day's

profile levels? And what side of the high

volume nodes is price holding? If you see

that price is holding above the developed

high volume nodes then we can be more

bullish. If we see that price is holding

below the high volume nodes then we can be

more bearish. And if we see that price is

just developing fairly even across the

board then we can consider price to be

ranging instead of trending. And lastly

where is price holding or rejecting

relative to yesterday's value? So there

will be many examples of how to use this

and the best way to see this in action

will be to look at the trading playbook

section. Which is available alongside this

course. But as an example based on the

profiles we see in the developing auction.

We can sort of start to build a story

around price and reinforce our trade idea

with some volume based logic. So to start

off you can see the white dotted line

represents yesterday's value levels. So

the previous regular trading hours. We

have previous day's value area high. We

have previous day's point of control. And

here's how we form an analysis around this

trade idea which is highlighted in green.

Number one we can see this is the

overnight developing profile we've drawn

from 6pm through to current time. Or the

time of the example trade. And what we can

see is that when price opened up here just

after 6pm it tried to reach below the

point of control of the previous day and

was immediately bought up. It came above

the value area high of the previous day

but failed to hold above and was sold back

into the value area. So there was a lack

of buyers above value highs and a lack of

sellers below the previous day's point of

control for the time being. So price pulls

back into the upper portion of yesterday's

value area and builds value across the

range here. The fair value point for the

current session is basically in the middle

of yesterday's value high, yesterday's

point of control. And the value area high

is almost aligned with yesterday's value

high and the value area low is basically

aligned with yesterday's point of control.

And what we can see on this profile is

that each time prices try to extend beyond

these value levels from yesterday there

was an attempt to find value at these

levels. However the market rejected these

levels and came back in to this range on

both sides. You see on the downside here

it attempted to go below fair value of

yesterday was bought back up. On the

upside attempted to go above was sold back

down but developed a little bit of value.

But the main portion of value has been

found in the midpoint of this range. So

what that tells us is that participants

are more willing to trade around the

midpoint of this range. So the best play

to look for is to look for fades of the

extremes. Now what we have is when we come

up to our time of trade here we have a

couple of basic confluences first of all.

We have the current session value area

high. We have the previous day's value

area high in the white dotted line. We

have a high volume node which you can see

here which has reinforced the previous

day's value area high. So we have three

confluences sitting at the zone as price

pulls up towards it. And then we have the

fourth added confluence of expecting a

range bound market across this range.

Seeing that value has been found in the

middle with very little amounts of value

being found at the extremes. With price

rejecting back to the midpoint. We want to

use what we know about this profile and

there is a lot of value being found in the

midpoint of this range. And play the

extremes fading back towards the center.

So with three confluences that play up

here we can build a short position in this

small pocket here. Highlighted in green.

And sell back towards the midpoint of the

range. With a take profit target at the

current session point of control. And that

is a mean reversion play because we have

been able to identify a range bound market

using this profile. Identify which areas

of price that range is most likely to

develop across. Now why would we fade the

upper portion and not fade the lower

portion? Well number one playing the

extremes of two profiles is better than

playing the extreme of one profile but the

fair value point of another. So although

this is the value area low of the current

session profile it was point of control of

yesterday's profile. So although that can

be a good confluence it is not as high

probability as trading where two value

area highs are. You have a previous day

value high a current session value high

and it's reinforced. Whereas down here

this high volume node only developed when

price traded down here. So in this case up

here there was already a high volume node

which had developed earlier in the day

over here. Versus down here this profile

if we were able to drag this back to the

time price dipped into this level. There

would have been no volume at this low.

There would have been all new volume only

developing then. So the high volume node

here would only help reinforce this level

on a retest. Right because it didn't exist

when price first came down into that

point. Whereas for our trade example up

here the high volume node existed before

we even moved up into that price point. A

high volume node that's developed right on

top of the previous day's value high. With

the current session value high also in the

same area in the same pocket. This is

where it gets a bit more advanced and

where the most skill building will be

required in your journey as a volume

profile trader. Learning to read a volume

profile in this way and use the context of

the developing profiles to understand

what's going to be your most likely play.

Your most likely trade. And you can see

how using all those concepts we've used in

the course so far. We kind of piece

together a story around the current market

around the current profile. And determine

what would be the better trade trading

this area down here or trading this area

up here. And that can help us to filter

out what would be potentially a losing

trade or a trade with a lot of drawdown

versus a winning trade with minimal

drawdown. And over four confluences at

play. So this is where things start to get

a bit more advanced and where time is

going to be the key factor. Putting in

conscious screen time. Going through the

playbook trades that you see uploaded

alongside this course. And investing in

your continued learning by putting in time

both on the charts and in this community.

So that's a little preview, a little

overview of what you'll be able to analyze

the more proficient you become with volume

profile. And how we use these developing

profiles to build a story and find higher

probability trades. And filter out

potentially losing slash higher drawdown

trades versus more accurate pinpoint

trades. So those are the key confluences

you're going to be looking for every day

when hunting trade setups. Let's now move

on with the course and move on from

confluences. And we'll cover a key lesson

on confirmations before moving into risk

management. Let's run byonds of demand for

investment. But even just since we've