medium · Volume Profile Analysis trading-strategies
What is the structural implication of 'Excess' on a TPO profile, and how does it inform the placement of a Stop-Loss order?
- Excess simply marks a 'High Volume Node' that will later go on to act as a powerful magnetic support or resistance level whenever price returns to it.
- Excess indicates 'unfinished business' that price must eventually revisit, so protective stops belong placed far away to dodge the structural magnet pull.
- Excess is just a retail-driven spike, so the protective stop-loss should rest right at the Point of Control while the trader awaits later institutional confirmation.
- Excess represents a completed auction and a 'true' extreme; a stop-loss should be placed just beyond the excess tail as it is unlikely to be tested soon.
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