1
00:00:00,240 --> 00:00:04,400
Let us now discuss how we can use the
information provided by the volume

2
00:00:04,400 --> 00:00:05,920
to locate the stop loss.

3
00:00:06,560 --> 00:00:10,580
To set the stop loss, we want to
identify areas where there has been a

4
00:00:10,580 --> 00:00:13,320
rejection, and these are the low volume
nodes.

5
00:00:13,900 --> 00:00:17,960
The price generated a reversal on them,
and we expect them to behave in the same

6
00:00:17,960 --> 00:00:18,939
way in the future.

7
00:00:18,940 --> 00:00:21,980
Therefore, it is an excellent area to
place our stop protection.

8
00:00:22,960 --> 00:00:27,060
The exact location of the stop should be
at a level that coincides with the end

9
00:00:27,060 --> 00:00:29,980
of the low volume node and the beginning
of the high volume node.

10
00:00:30,620 --> 00:00:34,820
Since the low volume node is a zone, the
price can generate the final inflection

11
00:00:34,820 --> 00:00:37,200
point at any of the levels that make up
the zone.

12
00:00:37,560 --> 00:00:42,000
That is why the most precise location of
the stop loss should be at the end of

13
00:00:42,000 --> 00:00:43,000
the low volume node.

14
00:00:43,620 --> 00:00:47,300
This will give us some room for the
price to turn around before reaching our

15
00:00:47,300 --> 00:00:48,300
stop.

16
00:00:48,640 --> 00:00:50,940
This chart example shows this very well.

17
00:00:51,450 --> 00:00:55,770
If we had entered this rejection on the
LVN, the stop loss would have been

18
00:00:55,770 --> 00:00:59,970
placed approximately at the marked
position, at the end of the low volume

19
00:00:59,970 --> 00:01:02,110
and at the beginning of the high volume
node.

20
00:01:03,010 --> 00:01:05,630
We will now work with the examples we
saw earlier.

21
00:01:06,270 --> 00:01:10,470
In this case, we identify the low volume
node and the stop loss would be placed

22
00:01:10,470 --> 00:01:14,530
at the point where it is marked, just at
the end of it and at the beginning of

23
00:01:14,530 --> 00:01:16,190
the high volume node, as we have seen.

24
00:01:17,000 --> 00:01:20,320
We have always been told that the stop
loss is on the other side of the

25
00:01:20,320 --> 00:01:23,400
inflection points that mark potential
supports and resistances.

26
00:01:23,820 --> 00:01:27,080
But we have never been told exactly
where and why.

27
00:01:27,360 --> 00:01:31,340
And the reason is this. The exact level
where it should be placed is at the

28
00:01:31,340 --> 00:01:34,800
point where the end of a low -volume
node and the beginning of a high -volume

29
00:01:34,800 --> 00:01:39,560
node zone coincide, so that the price
has enough margin to generate a

30
00:01:39,560 --> 00:01:43,820
at any of the levels that make up the
low -volume node before moving in our

31
00:01:43,820 --> 00:01:44,820
direction.

32
00:01:45,160 --> 00:01:46,800
Here, we have another example.

33
00:01:47,000 --> 00:01:51,000
The price generates the rejection at the
low volume node and offers us the entry

34
00:01:51,000 --> 00:01:55,260
trigger. If we had taken the opportunity
to buy, the stop loss would have been

35
00:01:55,260 --> 00:01:59,000
placed below the price and exactly at
the level where the beginning and the

36
00:01:59,000 --> 00:02:01,260
of the high and low volume nodes
coincide.

37
00:02:02,020 --> 00:02:05,480
And finally, in this other example, the
situation is the same.

38
00:02:05,760 --> 00:02:10,419
Short entry on a low trading zone and
set the stop loss at the end of this

39
00:02:11,000 --> 00:02:16,090
As in this case, if the low volume knot
is relatively narrow, the stop loss will

40
00:02:16,090 --> 00:02:20,550
be closer to the end of the price.
However, the concept will always be the

41
00:02:20,550 --> 00:02:22,210
regardless of the size of the knot.

42
00:02:23,110 --> 00:02:27,270
It should also be noted that in addition
to the low volume nodes, the more

43
00:02:27,270 --> 00:02:29,670
trading levels we have in favor, the
better.

44
00:02:30,230 --> 00:02:34,230
There will be times when there is no
clear low volume node on which to place

45
00:02:34,230 --> 00:02:35,109
stop loss.

46
00:02:35,110 --> 00:02:39,370
For these special cases, it is
especially useful to use the rest of the

47
00:02:39,370 --> 00:02:44,360
levels. One point to note is that in
order to place the stop loss, we should

48
00:02:44,360 --> 00:02:49,000
take into account the BPOC due to its
own nature and implications, which we

49
00:02:49,000 --> 00:02:50,000
discuss again.

50
00:02:50,580 --> 00:02:55,580
In this example of trading on the value
area high of the profile, if we look

51
00:02:55,580 --> 00:03:00,320
closely, all this area is part of a
large node of low volume, so a correct

52
00:03:00,320 --> 00:03:04,120
location of the stop loss would have
been at the point where the nodes

53
00:03:04,200 --> 00:03:08,220
which would also be below the value area
high, as it is logical.

54
00:03:09,160 --> 00:03:13,180
I mentioned earlier that the VPOC should
not be used for setting stop losses.

55
00:03:13,620 --> 00:03:18,540
The reason is that this level suggests
balance and is part of a high -volume

56
00:03:18,540 --> 00:03:22,240
node, and this means that the price is
likely to visit this area.

57
00:03:22,740 --> 00:03:26,920
The concept is clear. The stop loss
should be placed in areas where the

58
00:03:26,920 --> 00:03:31,060
has previously generated a rejection,
not in areas where it has generated an

59
00:03:31,060 --> 00:03:32,060
acceptance.

60
00:03:32,160 --> 00:03:36,220
Therefore, in this example, if we also
wanted to place the stop loss below the

61
00:03:36,220 --> 00:03:41,520
VPOC, the ideal location would be the
one shown below, which would be anchored

62
00:03:41,520 --> 00:03:43,100
at the end of this low volume node.

63
00:03:43,580 --> 00:03:48,460
And as we can see, this would be a
location too far away from the entry, so

64
00:03:48,460 --> 00:03:49,460
should be discarded.

65
00:03:49,820 --> 00:03:54,220
This will not always be the case. At
other times, the best location, due to

66
00:03:54,220 --> 00:03:58,060
proximity of the price to the trading
levels, will be at some low volume node

67
00:03:58,060 --> 00:03:59,340
below the VPOC.

68
00:04:00,080 --> 00:04:03,820
The key is that we select the most
favorable location while maintaining the

69
00:04:03,820 --> 00:04:04,960
logic of these principles.

70
00:04:06,000 --> 00:04:09,900
In this other example, we have an entry
where the price is trading above the

71
00:04:09,900 --> 00:04:13,280
VPOC and generates a rejection at the
low volume node.

72
00:04:13,620 --> 00:04:18,100
We would identify the end of this low
volume node and place the stop loss

73
00:04:18,779 --> 00:04:21,000
This should be the most conservative
position.

74
00:04:21,260 --> 00:04:26,820
As we can see, this node is quite wide,
so the stop loss would be relatively far

75
00:04:26,820 --> 00:04:30,920
away. We should evaluate whether this
distance is sufficient for our position

76
00:04:30,920 --> 00:04:34,880
management. We could decide to shorten
it and place the stop closer.

77
00:04:35,260 --> 00:04:37,600
but this would increase the risk of
being hit.

78
00:04:38,740 --> 00:04:42,860
Finally, here is another example of
where the entry occurs in a confluence

79
00:04:42,860 --> 00:04:45,340
of the VPOC and the weekly VWAP.

80
00:04:46,040 --> 00:04:50,180
We identify the nodes at the bottom and
place the stop loss at their limits.

81
00:04:50,500 --> 00:04:54,780
As mentioned before, this type of entry
has a high probability due to the

82
00:04:54,780 --> 00:04:55,800
confluence of levels.