hard · Volume Profile Analysis trading-strategies
In a balanced, rotational market a trader is fading the extremes of a well-defined value area. The session prints a poor high (a flat, abrupt top with no excess/tail). The trader's rule fades the value-area high.
Why is selling that poor high systematically inferior to selling a high that ended in a long buying tail, even though both sit at the same price?
- A poor high reflects buyers stopped abruptly without rejection, so it is unfinished business likely to be revisited and exceeded, whereas a tail marks rejection that confirms the auction explored and refused higher prices
- A poor high reflects stronger rejection because the flat top shows aggressive sellers absorbed all bids instantly, making it the higher-probability fade of the two
- A poor high and a tailed high are functionally identical for fading because both define the value-area boundary, so the distinction does not change the trade's edge
- A poor high signals a completed auction with balanced two-sided trade at the top, so it is the safer fade while a tail implies one-sided risk of a runaway move
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