1 00:00:00,270 --> 00:00:04,790 Another use of the volume profile tool is in impulse trading, where we are 2 00:00:04,790 --> 00:00:06,190 trying to enter a trend movement. 3 00:00:06,650 --> 00:00:11,350 In this case, the key is to correctly identify the impulse movement, to know 4 00:00:11,350 --> 00:00:15,190 to determine when the end of it has occurred, in order to correctly launch 5 00:00:15,190 --> 00:00:16,189 profile. 6 00:00:16,250 --> 00:00:20,770 In this case, we use the fixed range volume profile, where we manually define 7 00:00:20,770 --> 00:00:23,170 the beginning and the end of the range to be analyzed. 8 00:00:23,650 --> 00:00:25,590 Here is an example of a bullish impulse. 9 00:00:25,870 --> 00:00:29,800 After seeing the beginning of the correction, We launch the profile from 10 00:00:29,800 --> 00:00:34,680 of the movement to the high and it identifies the two big zones to be taken 11 00:00:34,680 --> 00:00:37,540 account, the value area high and the VPOC. 12 00:00:38,320 --> 00:00:43,100 As we can see, the price reacts up to three times above the value area high 13 00:00:43,100 --> 00:00:45,440 before generating a new upward impulse. 14 00:00:46,380 --> 00:00:49,740 Here is another example, but this time in the opposite direction. 15 00:00:50,020 --> 00:00:54,480 We have a bearish impulse and once we have determined its end, we start a 16 00:00:54,480 --> 00:00:58,420 profile from the high to the low of the impulse movement to identify the trading 17 00:00:58,420 --> 00:01:03,040 levels. In this case, the market again reacts to the lower level of the value 18 00:01:03,040 --> 00:01:06,740 zone, from where it starts to develop another new bearish impulse. 19 00:01:07,740 --> 00:01:12,660 In addition to the value area limits, we can also consider the VPOC as a trading 20 00:01:12,660 --> 00:01:15,220 level above which market rotation can be expected. 21 00:01:16,040 --> 00:01:17,600 This chart is an example. 22 00:01:18,100 --> 00:01:22,550 After the upward impulse ends, the market begins to correct downward until 23 00:01:22,550 --> 00:01:27,110 reaches the VPOC area, from where it again creates sufficient cause for a new 24 00:01:27,110 --> 00:01:28,430 upward impulse to develop. 25 00:01:29,010 --> 00:01:33,710 In this example, this happened because the value area remained at the top of 26 00:01:33,710 --> 00:01:37,850 impulse, so the corrective movement has already started within the value area. 27 00:01:38,590 --> 00:01:43,130 Ideally, the impulsive movement should leave the value area at the origin of 28 00:01:43,130 --> 00:01:45,490 movement, as we saw in the previous two examples. 29 00:01:46,270 --> 00:01:50,070 This is exactly the same as we discussed earlier about the use of rotation 30 00:01:50,070 --> 00:01:52,910 patterns where we analyzed the intra -bar profile. 31 00:01:53,670 --> 00:01:57,830 We said that the most genuine representation of an initiative in favor 32 00:01:57,830 --> 00:02:02,130 movement must leave the high volume at its origin, so that the continuity in 33 00:02:02,130 --> 00:02:03,890 that direction is subsequently demonstrated. 34 00:02:04,290 --> 00:02:09,330 In this case, since the impulsive move ends with most of the volume traded at 35 00:02:09,330 --> 00:02:12,880 the end of the move, the first trading level you will encounter when the 36 00:02:12,880 --> 00:02:15,500 pullback begins is always the VPOC. 37 00:02:16,340 --> 00:02:21,700 If the bearish corrective move loses the VPOC, i .e. develops further price 38 00:02:21,700 --> 00:02:26,520 action below the VPOC level, the price will most likely target the value area 39 00:02:26,520 --> 00:02:27,680 low of that profile. 40 00:02:28,420 --> 00:02:33,300 At that point, once the VAL is reached, there will likely be some kind of 41 00:02:33,300 --> 00:02:37,840 reaction to the upside, but the market has already shown enough weakness to 42 00:02:37,840 --> 00:02:41,540 looking for a continuation of the uptrend at least for the time being. 43 00:02:42,160 --> 00:02:44,760 This is exactly what happens in this example. 44 00:02:45,080 --> 00:02:49,640 The price develops an upward impulse and quickly corrects to the VPOC zone. 45 00:02:50,260 --> 00:02:55,100 This manages to support the price for a moment, but in the end it loses this 46 00:02:55,100 --> 00:02:59,640 level and begins to move sideways below it as a sign of acceptance of these new 47 00:02:59,640 --> 00:03:02,880 levels. This in itself is a sign of market weakness. 48 00:03:03,640 --> 00:03:08,790 As we noted when we introduced the VPOC, This level also serves to establish 49 00:03:08,790 --> 00:03:13,270 short -term market control, so the fact that it loses the VPOC effectively 50 00:03:13,270 --> 00:03:17,570 indicates that sellers are more active than buyers and that the short -term 51 00:03:17,570 --> 00:03:18,610 sentiment is bearish. 52 00:03:19,090 --> 00:03:23,890 Therefore, at this point, it is very likely that the market will visit the 53 00:03:23,890 --> 00:03:28,070 zone first and the origin of the move second, as in this example. 54 00:03:28,870 --> 00:03:33,070 The market reaches the bottom of the VAL zone as an obvious sign of weakness, 55 00:03:33,290 --> 00:03:37,600 and while it is true there is some reaction at this level, it should be 56 00:03:37,600 --> 00:03:39,980 to evaluate a buying opportunity there. 57 00:03:40,580 --> 00:03:45,380 The underlying weakness is so latent that the most likely outcome at this 58 00:03:45,380 --> 00:03:49,220 is that the market will go to the lows that gave rise to the uptrend.