Recently, I’ve been reviewing discussions among traders about technical analysis and noticed that many people don’t have a deep understanding of the POI concept. POI actually stands for Point of Interest, simply put, it’s a specific area on the chart where price may interact strongly—rebound, breakouts, liquidity entry, and so on.

I’ve observed that successful traders pay close attention to this because price seems to be attracted to these areas, often returning to retest them. The underlying logic is quite straightforward: previous abnormal price movements (such as a large candle with a long wick, gap openings, false breakouts, or obvious supply and demand imbalances) leave traces on the chart, and these traces are the POIs.

The most common situations include: first, breakout candles accompanied by high trading volume indicating genuine liquidity entering; second, rejection candles with long wicks and clear rejection signals (hammer, shooting star); third, liquidity gaps, where areas with little price interaction tend to get filled; fourth, supply and demand zones, where large clusters of buy and sell orders gather.

How to use this? First, wait for the price to revisit the POI, then look for reversal signals. My approach is to set stop-losses 10-15 points below or above the POI, making the risk very clear. If the price approaches the POI and RSI shows overbought conditions (above 70), then a sell signal becomes very strong. After entering, target the next resistance level or previous highs and lows.

Taking XRP as an example, suppose on a 15-minute chart, a huge upward candle appears, pushing from 1.9500 directly to 2.0000. The 1.9500-1.9600 area is a clear POI. Two hours later, the price returns to this vicinity, which is worth paying close attention to. If a hammer forms at 1.9550, it likely indicates traders’ interest in this zone, possibly bouncing back to the previous high of 2.0000, but caution is needed if the price drops below 1.9450.

However, when using POI, avoid common mistakes: don’t enter before confirmation signals appear, don’t ignore the overall market trend, and never rely solely on POI without proper risk management. Choosing the right timeframe is important; for scalping, 15 minutes is ideal.

Finally, I recommend combining other tools: first, analyze market structure to determine trend direction, so POI aligns with the trend rather than against it; EMA 50/200 can help identify whether a POI is support or resistance; high-volume rebounds can provide additional confirmation for POI. Overall, this integrated approach can significantly improve your trading success rate.