medium · Volume Profile Analysis trading-strategies
A volume profile trader enters short at the prior session's VAH at 5645 after observing rejection there — the developing profile shows the POC settling 20 points below entry at 5625. Price drops to 5630 and the developing session profile builds a new intraday POC at 5628.
Where should the profile-based trailing stop now be placed?
- Move the stop to the intraday VAH of the developing session, since a profile-based trailing stop should always sit at the highest accepted price the auction has printed
- Trail the stop to just above the intraday developing POC at approximately 5630-5631 — a close back above the developing POC would invalidate the short's structural thesis
- Leave the stop parked at the original 5645 entry level, because a structural trailing stop should only ever be advanced once price has actually reached the trade's original profit target
- Reset the stop to 5645 minus twice the intraday range, since a disciplined profile-based stop is always derived from a fixed multiple of the session's current trading range
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