The POI, short for Point of Interest, is a specific zone on the chart where the trader anticipates strong price interaction (such as a reversal, breakout, or liquidity entry).

What does POI mean exactly?

It is a region on the chart identified by an unusual previous price movement, such as:

• A large candle with a long wick.

• A gap in the price.

• A false break.

• A significant demand/supply zone.

• A market maker entry point.

The POI is considered a magnet for price, which is often revisited for a reversal or breakout.

Most common types of POIs

1. Breakout candles:

• A strong bullish or bearish candle with high trading volume is considered a POI, as it represents a real influx of liquidity.

2. Rejection candles:

• A candle with a long wick and a clear price rejection ( like hammer or shooting star candles ).

3. Imbalance zones:

• Price areas with a lot of interaction, which tend to close.

4. Demand/Supply zones:

• Zones where buy or sell orders have been densely accumulated.

How to make use of this information?

1. Identifying optimal entry zones:

• Wait for the price to revisit the POI.

• Look for reversal signals ( such as a spinning top or price structure break ).

2. Setting a precise stop loss:

• The stop loss should be placed 10-15 points below/above the POI.

3. Combining it with indicators:

• If the price approaches the POI and the RSI is at 70 overbought, it represents a solid selling opportunity.

4. Defining objectives precisely:

• When entering a trade from the POI, you can set your targets at the next resistance or at previous highs/lows.

Practical example (cryptocurrency XRP)

Imagine you are on a 15-minute chart, and a huge bullish candle drives the price from $1.9500 to $2.0000 in one minute.

• This indicates the existence of a POI in the zone $1.9500 - $1.9600, a clear starting point for the price.

• When the price returns to this area later (for example, after two hours), it could be considered a potential observation zone for price interaction.

• If a reversal candle appears like a hammer at $1.9550, it could indicate traders' interest in this zone and a possible reversal.

• In this scenario, the technical analyst could anticipate a new attempt to rise in price towards the previous high at $2.0000, considering the risks of fluctuation below the zone, such as $1.9450.

Note: This example is purely educational and should not be interpreted as a trading recommendation.

Integrating POI with other analysis tools

• Market structure: Determine if the trend is bullish or bearish, and let the POI help you, do not go against the trend.

• EMA 50/200: If the POI is above the moving average, it acts as support, and vice versa.

• Volume: A reversal of the POI with a large trading volume provides additional confirmation.

Common mistakes

• Enter before the confirmation appears.

• Ignore the general market trend.

• Trust in the POI without risk management.

• Use POI in an inadequate time frame (preferably 15m for scalping).