medium · Volume Profile Analysis profile-shapes

A volume profile trader is long EUR/USD at 1.0850 with a structural stop at 1.0820 based on the Value Area Low of the prior three-day composite profile. The prior three-day POC is at 1.0840.

Which stop placement principle is most consistent with volume profile methodology?

  1. The structural VAL stop at 1.0820 is the correct choice; invalidation of the accepted value area is the profile-based signal that the trade idea is wrong
  2. Any stop below the POC at 1.0840 is far too tight; the correct stop is always a fixed 50 pips beneath the entry price regardless of profile structure
  3. The prior three-day POC at 1.0840 should be used as the stop; any move that trades beneath the highest-volume node means the long trade idea is now invalid
  4. Volume profile methodology does not use price-based structural stops at all; instead every stop must be governed strictly by elapsed time in the trade, never by level

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