medium · Volume Profile Analysis trading-strategies
A trader identifies a rejection setup on EUR/USD. Price touches a Weekly VAH (+3 points), rejects with a long upper wick on 2.5x average volume, and price closes in the lower half of the bar. The 14-period ADX is 18.
How should this trade be sized relative to the regime?
- Half position size; the ADX is too low to support a trending move.
- Full position size; rejection is an initiation signal.
- Skip trade; low volatility suggests lack of participation.
- Full position size; rejection setups are favored in low-ADX regimes.
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