Recently, I’ve noticed that many traders still don’t fully understand what POI is, even though it’s one of the most useful technical analysis tools. POI – short for Point of Interest – basically refers to areas on the chart where the price tends to interact strongly. It’s not a complicated concept, but understanding it correctly can help you trade much more effectively.

When we talk about what POI is, we’re referring to areas identified from previous abnormal price movements. For example, huge candles with long wicks, price gaps, false breakouts, or strong supply and demand zones. I often call it a “price magnet” because the price tends to revisit these areas for recovery or to break through.

There are several common types of POI you need to know. First is the breakout candle – when you see a strong bullish or bearish candle with high volume, that’s a POI because real capital is entering. Second is rejection candles with clear long wicks, like hammer candles. Third are liquidity gap areas – price levels that have been interacted with multiple times and often attract revisits. Lastly are supply and demand zones where many buy or sell orders are concentrated.

Now, how to leverage POI in actual trading? First, wait for the price to revisit the POI and watch for reversal signals. When entering a trade, place your stop loss about 10-15 points below or above the POI. I usually combine it with other indicators – for example, if the price is near the POI and RSI is around 70, that’s a selling opportunity. After entering from the POI, set your target at the next resistance levels or previous highs and lows.

Let’s take a real example with XRP on the 15-minute chart. Suppose a huge candle pushes the price from 1.9500 up to 2.0000 within a minute. This indicates a clear POI around 1.9500 – 1.9600. When the price returns to this area after a few hours, you need to observe the interaction. If a hammer candle appears at 1.9550, that could signal trader interest and a potential rebound. At this point, you might predict the price will try to rise back to 2.0000, with a stop loss below 1.9450.

An important point is to combine POI with other tools. Determine whether the trend is bullish or bearish so that POI works in your favor rather than against you. If the POI is above the 50/200 EMA, it acts as support; if below, it’s resistance. Trading volume is also very important – a rebound from POI with high volume further confirms the signal.

A common mistake I see is entering trades before confirmation, ignoring the overall trend, relying solely on POI without risk management, or using POI on inappropriate timeframes. I recommend using the 15-minute chart for scalping, and always remember that POI is just a supporting tool, not a guarantee of profit. Understanding what POI is will help you trade smarter, but discipline and risk management are still the key factors.