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I spent a lot of time studying POC trading, and I have to say it's one of the most underrated concepts in technical analysis. Most traders completely ignore the Volume Profile, but if you truly understand where the volume is concentrated, you have a significant advantage.
So, the Point of Control is simply the price level where the highest volume has passed during a specific period. It's not complicated, but it's powerful. It represents the equilibrium point between buyers and sellers, where both were particularly active. That's why it often becomes a natural support or resistance zone.
When I do POC trading, I always look for these levels because they indicate areas of concentrated liquidity. If the price tests the POC again, there's a higher probability of a reaction. The volume indicator helps me understand whether there's conviction behind the move or if it's just noise.
To set up a sell entry, my strategy is this: first, I identify if the POC coincides with a strong resistance. If the price approaches that area, I start paying attention. Then I wait for volume—if I see a volume spike when the price retests the POC, that's the signal I was looking for. There could be an inversion or a decisive rejection from that level.
I also add candlestick patterns to the mix. A bearish engulfing or a shooting star near the POC? Perfect, it increases the probability. But I don't rely on this alone—I always consider the broader market context. If the overall trend is bearish, then POC trading becomes even more reliable.
Risk management is where most people go wrong. When I enter a short in a POC area, I place the stop-loss above the resistance level. If the market moves against me, I want to know immediately that my thesis is wrong. I don't let losses accumulate.
After entering, I constantly monitor. The market changes, new volumes arrive, and I need to be ready to adapt. I adjust the stop and take-profit levels as the situation evolves. POC trading isn't a 'set and forget' operation—it requires attention and flexibility.