medium · Volume Profile Analysis reference-levels-migration
A swing trader scans for high-probability reversion targets. They identify a naked POC from three sessions ago sitting 1.5% below the current market.
Which statement BEST describes the trading rationale for targeting this level?
- The naked POC guarantees a reversal because institutional algorithms are programmed to defend prior POC levels
- The naked POC is a magnet because the concentrated volume built there represents unfinished auction business that the market tends to revisit
- The naked POC is significant only if it aligns with a round number, since isolated volume levels lack institutional memory
- Naked POCs from more than two sessions ago expire and should be removed from the trader's reference map
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