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Now, let's look at another use of the
volume profile tool.

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In this case, we will try to analyze the
health of the trend to determine when

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the market is likely to continue in the
direction it is heading and when a

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reversal is likely to occur.

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To do this, we will use the analysis of
value areas, the location of the VPOC,

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and the identification of P - and B
-shaped profiles that we studied

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As we have already seen, Conventional P
-shaped profiles, where the bullish

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imbalance is followed by a sideways
movement, are indicative of bottom

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They represent an upward price movement
and therefore any uptrend observed in

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terms of profiles, whether session or
other time frames such as weekly

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will show multiple of these P -shaped
profiles within them.

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Taken in isolation, this is price
behavior that suggests continuity in the

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movement. Based on the principle of
market continuity, if the market has

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moving up, it is most likely that it
will continue to do so in the immediate

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future. Therefore, observing profiles
with this type of shape is indicative of

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healthy uptrend.

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At this point, it also allows us to
determine the context and trading bias.

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A very interesting sign that the volume
profile provides us with is the

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continuous analysis of the session
profile.

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If we are observing an uptrend movement
A symptom of the health of the movement

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would be to observe that the value areas
and therefore the VPOCs of the sessions

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are generated higher and higher.

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This suggests that the value of the
asset is being accepted in the new

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areas. It is reaching and therefore the
trend is likely to continue.

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Trading in this context of control by
buyers, we should look for a pullback to

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trading areas predisposed to go long.

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The same applies to B -shaped profiles.

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These types of profiles indicate strong
market weakness and therefore suggest

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that there is a high probability that
the price will continue to move lower.

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Any bearish trend will be composed of
several of these profiles, indicating

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underlying weakness and a refusal to
trade at higher prices.

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Their identification informs us that the
bearish trend is healthy and

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establishes a directional bias to the
downside, so we should be fundamentally

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willing to look for trades in that
direction.

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An unmistakable sign of its health is
the fact that the areas of value leaving

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the seconds are observed at lower and
lower levels, indicating price

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In this bearish control scenario, the
most advisable thing to do is to

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areas of potential resistance in order
to look for short positions.

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Having seen the signs that indicate
continuity in the movement, let's look

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the patterns that indicate a turn in the
market.

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First of all, we will comment on a sign
that would alert us to the health of the

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trend. It would be to observe a certain
overlap between several value areas and

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to see that some of them are moving
against the direction of the trend,

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the momentum they had been carrying.

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At this point, we could already observe
a consolidation of the price and

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identify a change of character in which
the market moves from a state of

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disequilibrium to one of equilibrium.

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Here we see an example of where the
price moves down until it reaches a

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where there are four overlapping
profiles in the same price range.

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Obviously, this tells us that the market
is in range and downward movement is

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over. Next, we see that the location of
the next two profiles alerts us to a new

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change in market sentiment, now in a
bullish trend context.

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To determine this, we look at the value
area of both days, although the

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definitive signal is the exact level of
the VPOC.

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The value areas of these two days are
completely separate, with the first

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in a lower zone than the second, and on
the other hand, the VPOC identifies the

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total migration of the value, as it has
formed several price levels above the

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last one.

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From this point, we should be able to
declare that the context is bullish and

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therefore we should only look for buying
opportunities.

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Here is another example of this same
causistry.

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We observe that the market is in a
healthy uptrend, leaving the VPOC levels

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sequentially higher until there comes a
time when the value areas in their high

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volume levels begin to overlap.

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After that, A first value area manages
to develop beyond the congestion zone at

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its bottom, and the migration of value
to lower price levels begins.

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In this type of analysis, it is
essential to analyze in absolute terms

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location of the value areas of the
profiles compared to the previous

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and the location of the VPOC levels in
each of the profiles.

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Now let us look at the most true
representation of potential reversals

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analyzing areas of value.

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It's looking for the P and B patterns
that we saw earlier to look for changes

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value perception.

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And this potential change in value
perception is very clearly visualized by

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P and B patterns.

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If the market is in the middle of an
uptrend that is taking the value zones

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higher and higher, and suddenly a PB
pattern appears, we could be looking at

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end of that uptrend.

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The fact that the market has developed a
B pattern after the P pattern suggests

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a change in the perception of value, at
least temporarily.

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it is no longer willing to trade at
higher prices, and we may even be seeing

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beginning of a bearish trend.

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Again, it is important to note that we
are referring to the conventional B

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pattern, because if what we are seeing
is an inverted B pattern, we would

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actually have an accumulation, and
therefore the uptrend would indicate

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more strength.

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This is exactly what we see in this
example, a bullish move accompanied by

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higher value areas.

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The appearance of the P and B pattern
and the beginning of the bearish move

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profiles that indicate weakness, with
good B shapes, lower and lower value

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areas, and VPOCs that confirm to us the
migration of the security.

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Of course, not all market turns will be
the same. Some will be very visual like

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this example, and some will not.

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What we are going to do here is identify
the most genuine behaviors so that you

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can easily replicate them when you try
to analyze the market yourself.

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It is important to note that we can find
different degrees of urgency in the

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development of the pattern, which will
give us more or less confidence in the

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probability that the market turn will
eventually occur.

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This urgency has to do with the location
of the value zones of the profiles that

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generate the pattern.

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We will distinguish between moderate and
aggressive patterns.

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In the moderate reversal pattern, the
value zones mostly overlap, while in the

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aggressive reversal pattern, there is no
such overlap.

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In this case, the second profile, the B
-shaped profile, develops completely

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below the low of the P -shaped profile.

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What this suggests to us is that there
has been a strong shift in the

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of value among market participants who
have traded at an aggregate level that

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agrees with this large migration of
value.

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There will be times when we find
depictions where the profiles overlap on

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side and the other side is left out.

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We should think of this concept as
having a wide range of possibilities.

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with the moderate pattern representing
the least aggressive form of a potential

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turn, and the aggressive pattern being
the one that gives us the most

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confidence. In addition, another
fingerprint we can evaluate is the

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the VPOC at the second profile relative
to the other VPOCs.

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In this example of the aggressive
pattern, the VPOC of the second B

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profile is obviously below the VPOC of
the P -shaped profile.

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but it is also below the VPOC of the two
previous profiles.

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The concept is that the lower it falls
relative to the VPOC of the previous

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profiles, the more urgency the movement
represents.

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Here, we have the inverted pattern where
the B -shaped profile appears first and

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the P -shaped profile appears second.

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This type of configuration alerts us to
the possible change in market sentiment,

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where the market would move from a range
or bearish trend to a bullish trend.

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It is important to emphasize that we
should not necessarily observe the

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appearance of the profiles together.

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As we can see in the example of the
moderate pattern, the B -shaped profile

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appears first, then a traditional
profile, and then the P -shaped profile.

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The reading is exactly the same, with
the only difference that these types of

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representations need more time before
generating the final turn of the market.

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The profile or profiles that may remain
in the middle of the pattern indicate a

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range context where the cause for the
subsequent trend movement is being

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Do not dismiss the reading of the
potential reversal by the fact that the

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profiles do not appear one after the
other, as is the case in the example of

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aggressive pattern.

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As we have said, the aggressive pattern
is the representation that suggests the

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most urgency and that confirms a large
shift in the migration of the VPOC.

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Therefore, it is the representation that
gives us the most confidence in

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assessing the imminent presence of the
market turn.

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But this does not mean we should limit
ourselves to looking for such perfect

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patterns. As we know, the market behaves
erratically most of the time, so

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looking for the appearance of perfect
patterns can be a waste of time.

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It seems more interesting to stay with
the dynamics within them, what is

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implicitly suggested by this type of
behavior as a whole.

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Here, we have a very interesting example
where, beyond looking for the perfect

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and true representation, we apply the
same concepts in a more flexible way to

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identify the same turning pattern as a
whole.

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The price comes down and starts to
develop several B -shaped profiles

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practically in the same price range,
where value areas and the VPOCs overlap

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a very narrow space.

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This is a sign of acceptance by the vast
majority of participants at these price

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levels. and therefore indicates that the
market has changed its character from a

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bearish trend state to a sideways one
where a rotation process begins we see

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that more price action follows leaving
profiles of different shapes until the p

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-shaped profile is generated which shows
a strong refusal to continue falling

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identified by this two candlestick
pattern which suggests to us that this

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failed price discovery commonly known as
a liquidity search false breakout or

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trap. What happens next is that the
market changes its character again and

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from a sideways state to a trend state,
creating the bullish imbalance.

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The curious thing is that we could have
gotten exactly the same reading if we

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had started a manual fixed range profile
of all this lateralization.

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As we can see, at the aggregate level,
all of this price action is represented

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in a P -shaped profile, where the failed
breakout is the action that generates

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the P column.

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This is an extraordinary example where
we can bring together some of the

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different concepts that we have learned
during the development of this course.

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One of the recommendations is that after
looking at the overlap of several value

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areas of the session profile, you start
a manual profile of all that price

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action as a whole, as I have done here.

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This can give you a better perspective,
especially when looking for a market

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entry. In this case, we see how the
price returned to the value area after

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Bullets breakout and was rejected at the
VAH, identifying the potential entry

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there.