medium · Volume Profile Analysis trading-strategies

During an RTH session, DAX futures have a prior-day value area: VAH 18,320, POC 18,270, VAL 18,220. Price opens at 18,330, above the prior-day VAH. The opening 30-minute volume is light and the developing session profile shows very thin TPO distribution above 18,320. After 45 minutes, price slips back through 18,320 and the session POC has formed at 18,268.

What is the profile interpretation and most likely next significant price target?

  1. Price will immediately resume its advance higher from here, because an open above the prior-day VAH is always an outright bullish signal in profile terms that stays completely valid and reliable for the entire remaining duration of the trading session today.
  2. The light volume and thin TPO distribution above the prior-day VAH, followed by the return below 18,320, indicate a failed auction; the prior-day POC at 18,270 becomes the primary mean-reversion target with the VAL at 18,220 as the next objective if the POC cannot hold
  3. The session POC at 18,268 is the single final downside target of the entire day, and once that developing session POC has been firmly established the market simply cannot trade beneath it again under any circumstances for the whole remainder of the regular cash session.
  4. The volume profile framework can no longer provide any meaningful or actionable guidance whatsoever once price has slipped back inside the prior-day value area; from that moment forward only raw, discretionary price action alone can determine the next directional move and target.

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