medium · Volume Profile Analysis profile-shapes
After three consecutive D-shaped sessions building a tight value area on NQ between 19,200 and 19,280, today's session opens outside this range at 19,310 and holds above the prior VAH for two hours without returning.
How should a volume profile trader interpret this price action?
- The sustained hold above the prior VAH signals successful auction above value — the market may be accepting a new, higher value area
- The open above value is a false signal; the market will rotate back into the prior value area before the close
- The POC of the prior three sessions is now irrelevant and should be removed from the chart
- A D-shaped profile is guaranteed to form today since three balanced sessions typically produce a fourth
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