hard · Volume Profile Analysis trading-strategies
ES futures close a session with a prior-day profile: VAH 5,640, POC 5,610, VAL 5,580. The next day opens at 5,598, inside the prior-day value area but below the prior-day POC. The developing session profile begins to show heavier volume at 5,600–5,605 rather than at the prior-day POC of 5,610. As the session progresses, the session POC stabilizes at 5,602.
What does the relationship between the session POC (5,602) and the prior-day POC (5,610) indicate for mean-reversion participants?
- The session POC forming below the prior-day POC indicates short-term accepted value is below yesterday's fair price; a responsive long from below the session POC now targets the session POC at 5,602 rather than the prior-day POC at 5,610, and reaching 5,610 requires the session POC to migrate higher first
- The session POC below the prior-day POC is bullish because it shows buyers are supporting prices below the prior-day POC, guaranteeing a rally to the prior-day VAH
- The difference between 5,602 and 5,610 is too small to be meaningful; treat them as the same level for any trade
- The prior-day POC at 5,610 automatically overrides the session POC; the session POC has no significance when the prior-day POC is nearby
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