medium · Volume Profile Analysis reference-levels-migration

A volume profile practitioner is reviewing EUR/USD. The current session has developed a balanced D-shaped profile with the POC at 1.0865 and the value area from 1.0850 to 1.0880. Price is at 1.0880 — the Value Area High. The practitioner knows that a prior session's Naked POC sits at 1.0920.

What is the most structurally coherent volume profile interpretation of this situation?

  1. The Naked POC at 1.0920 is the single primary trade target here, so the practitioner should enter long immediately at the VAH of 1.0880 because the overhead upside reference flatly demands that an immediate long position be taken right now
  2. Because the current session has formed a balanced D-shaped profile, the overhead Naked POC at 1.0920 is now effectively cancelled out by that internal balance and should therefore be removed from the chart entirely as a reference
  3. A responsive buy at the VAH of 1.0880 is the correct play here, because in balanced two-sided markets an overhead Naked POC will always override the current session's own developing internal value-area structure entirely here
  4. In a balanced session, the VAH at 1.0880 is a responsive sell zone targeting back toward the POC at 1.0865; the Naked POC at 1.0920 only becomes relevant if price breaks out of the current session's value area and accepts above the VAH

Sign up free to see the explanation and track your rank →

More Volume Profile Analysis reference-levels-migration practice

KomFi: Test Prep Made Easy

KomFi: Test Prep Made Easy — free adaptive practice for GMAT, GRE, SAT, ACT, National Real Estate Exam, Investment Banking, and finance with full explanations.

KomFi Academy is free GMAT prep and personalized GMAT help built as a training platform: 75,000+ practice questions, 26,500+ flashcards, on-demand video lectures, podcasts, and 4K slide decks. Flagship tracks: Free GMAT Prep, Free GMAT Resources, National Real Estate Exam Prep, Investment Banking Prep, Finance Prep, GRE, SAT, ACT, LSAT, MCAT, Financial Accounting, Private Equity, Private Credit, and Quantitative Finance.

Free GMAT Prep & Personalized GMAT Help

What's inside

Topics

View pricing · Read testimonials