medium · Volume Profile Analysis auction-market-theory
The Rotation Factor (RF) for a session is currently calculated as +14 across the first 10 half-hour periods. Each period has printed a higher high and a higher low than the preceding one.
How does this influence a practitioner's approach to the VWAP?
- Use the VWAP as a target for a short reversal trade, as +14 is an 'overbought' extreme.
- Enter long only when price retraces 50% below the VWAP to secure a discount.
- The RF and VWAP are unrelated because RF uses TPO and VWAP uses volume.
- Avoid 'mean-reversion' trades to the VWAP, as the high RF indicates strong 'One-Time-Frame' initiating flow.
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