I want to discuss a trading concept that many people tend to overlook but is especially practical—POI, which stands for Point of Interest. Simply put, POI refers to those key areas on a chart where price may react strongly, such as rebounds, breakouts, or liquidity entries.

How is a POI formed? Usually, it’s left by some abnormal price movements, like a large candle with a long wick, price gaps, false breakouts, or obvious supply and demand zones. In essence, a POI is like a magnet for price; the price often revisits these areas to either bounce or break through.

The most common types of POIs include several. The first is a breakout candle—when you see a high-volume, strong candle, it indicates genuine liquidity entering the market. The second is a rejection candle—a candle with a long wick and clear rejection of price (such as a hammer or shooting star). There are also liquidity gap areas, where little interaction occurs, and the price tends to fill these gaps. Lastly, supply and demand zones—areas with dense buy or sell orders.

How to profit from POI? First, wait for the price to return near the POI, then look for reversal signals. Enter the trade and set stop-loss 10-15 points above or below the POI. Many traders like to combine indicators—for example, if the price approaches the POI and RSI is in the 70s (overbought zone), that’s a good sell signal. Targets can be set at the next resistance level or previous highs and lows.

Let me give you a practical example. Suppose on a 15-minute chart, you see a huge upward candle pushing the price from $1.95 directly to $2.00. The $1.9500–$1.9600 area becomes a clear POI, a launch point for the price. Two hours later, the price returns to this zone, which is worth watching. If a reversal candle like a hammer appears, it could be a signal that traders are interested in this area, and the price might attempt to test the $2.00 high again. Of course, downside risk should also be considered, such as breaking support at $1.9450.

Although POI is just three letters, using it effectively requires combining with other tools. First, determine whether the overall trend is bullish or bearish, so POI works in harmony with the trend rather than against it. Check if the POI is above or below the 50/200 moving averages (acting as support or resistance). Trading volume is also crucial—rebounding from a POI with high volume provides additional confirmation.

Finally, a few common pitfalls to watch out for: don’t rush into a trade without confirmation signals. Don’t ignore the overall market trend. Don’t rely solely on POI without proper risk management. Also, choosing the right timeframe is important—15-minute charts work best for short-term trading. These POI trading methods may seem simple, but mastering them requires patience and discipline.