VOLUME PROFILE | How to Trade Point of Control (POC)

Hello everyone, it's Dale here. In this video, I'll show you how to use volume profile, which is a powerful tool that reveals where the big players are trading. And more importantly, we'll focus on the most critical level on the chart, which is point of control. And here is what you will learn. You will learn what volume profile actually shows and how to read it. You will learn

why point of control is the most powerful support and resistance level on your chart. You will learn how to trade the point of control both the basic and more advanced way and just as important when not to trade the point of control. I'll walk you through real trades from my own account,

show you my exact strategy and also what to do when the point of control fails because let's be honest, it doesn't work every time. And before we wrap up, I've got a small gift for you. But you

need to stay until the end. And don't skip. So, let's get to it. And let's start with a little quiz so you guys know where you are at. Okay. So, take a look at this picture right here on your screen and tell me where the price is going. Is it going to go up or is the price continue to

fall? It's pretty hard, isn't it? when you look just at this chart. Pretty hard to tell. Okay,

fall? It's pretty hard, isn't it? when you look just at this chart. Pretty hard to tell. Okay,

let me help you a bit. This is the same chart only what I've added is daily volume profiles. Now,

the same question. Will the price go up or down? Okay. So, if you look at the volume profile, this one, then right here, this is the point of control. the price hit that point of control and

made a reaction to it. As you can see with a plain chart, plain price action chart, it it was rather hard to guess where the price is going to go. But with volume profile, it's actually very easy level to spot, right? Because this is point of control. And if you guys don't understand a thing from

what I'm showing you now, don't worry. We'll get to it. But you know this is just a little quiz to get us started and to see where you are at. Okay, second question and it's the same question as before. Where is the price going to go? Up or down? Again, if we don't have the volume profile,

as before. Where is the price going to go? Up or down? Again, if we don't have the volume profile, it's quite hard to tell, right? Just looking at the price. But if we add the volume profile here,

then you can see that the price just hit the point of control which is in here. The price

just hit the point of control level. So up we go. Right? This is a reaction to the point of control.

Now let's rewind a bit and let me start from the beginning. Uh let me do a little introduction to what the volume profile is and then we'll continue to you know the setups that I use to trade the point of control. So volume profile is basically a histogram that shows volume at price. So if you

look at the volume profile, this is it. And the wider the volume profile is. For example, here the heavier volumes were traded at this price level. Right? This is called the point of control. This

level where the heaviest volumes were traded. And essentially what the profile is showing you is how the volumes were distributed throughout the whole day. So heaviest volumes were in here. Then there

is area where there were some low volumes. So at this price level, nobody was sort of interested in trading here. Same goes for this area, right? But this is the most important area because many people were interested in trading at this uh price level. All right? So volume profile shows

how volumes uh are distributed throughout the day. If it's a daily profile, if it's a weekly profile, then it will show how volumes are distributed throughout uh throughout the whole week. If

it's a monthly profile then throughout the whole month and as I was saying the point of control that's the place where the heaviest volumes were traded this is the point of control and today we are going to talk about that the volume profile can have many shapes those are the four most

basic ones but always the most important place in each shape is the point of control right So this is something called D-shaped profile because it has shape of a letter D and right here this is its point of control. If you look at the B-shaped profile then the point of control is somewhere in

here. With a P-shaped profile you can see that the heaviest volumes were traded in here. So the

here. With a P-shaped profile you can see that the heaviest volumes were traded in here. So the

point of control is in here. And then with a thin profile sometimes it's a bit hard to tell especially if there are a couple of volume clusters like here. But I think looking at this profile that the point of control the heaviest volumes were traded right here. So in this case this is the point of control here. Right? So every volume profile has point of control no matter what

the shape of the volume profile is. Right? No matter how the volumes are distributed throughout the whole day and in each of those shapes the point of control is the most important place.

So as I was saying point of control is the most important place on any chart. The reason for that is that through volume profile you basically track the big trading institutions right the big guys the guys who move and manipulate the markets right and the point of control the place where the

heaviest volumes were traded. This is basically the place where the big trading institutions were most active where they placed the most of their trades, right? So that's the most important place on the chart and as you guys probably know institutions move the markets and if you guys know

where they are positioned then I believe that you are ahead of 99% of retail traders. It's kind of interesting because professional traders so many of them almost majority of them I would say are using volume profile at least as some addition to their trading strategy. Institutional traders

also use volume profile. Like this is a standard tool of a professional trader. But if you look at retail traders, not so many of them actually use volume profile. So what I'm trying to say is that even if you just place the volume profile on your chart, if you use simple daily profiles and you just look at where the point of control is, then if you do just this, you'll be still ahead

of most retail traders, right? Because you'll see something which they simply don't which they can't see if they don't have the volume profile. Now, in this video, we focus on the point of control. And if you are an intraday trader, then you'll probably be interested in a daily point

control. And if you are an intraday trader, then you'll probably be interested in a daily point of control, you'll be trading that. If you are long-term trader, then probably it's going to be uh for example yearly or monthly point of control. Let me actually show you. Let me go to the chart.

All right. So, uh this is a intraday chart, a 30 minute time frame. If you look here, I have daily profiles, right? Every day one profile and this is the daily point of control in here. Then there's

profiles, right? Every day one profile and this is the daily point of control in here. Then there's

daily point of control in here. Then there's daily point of control in here. And if you're a day trader, you are going to be interested probably mostly in the daily point of control, right? The place where most volumes were traded in a given day, right? But on the other hand, if you

right? The place where most volumes were traded in a given day, right? But on the other hand, if you are for example long-term investor, then you know you'll use workspace for example like this. This

is my swing trading workspace where I trade on the daily charts. And in here I have yearly volume profiles. Right? So if I trade point of controls here then I'm interested in this point of control

profiles. Right? So if I trade point of controls here then I'm interested in this point of control which is point of control of the whole year. I'll be interested in this point of control because this is current year point of control. Right? So depending on the time frame you trade, you should

think of what kind of volume profile you actually want to trade. Most of you are probably going to be intraday traders. So we are going to focus mostly on trading daily point of control which you can see right here on this intraday trading workspace. Now the reason why I'm shooting this

video and why point of control is so important is that because it is a strong support and strong resistance level. Right? As I was saying, point of control is a place where institutions placed most

resistance level. Right? As I was saying, point of control is a place where institutions placed most of their trading orders. Right. So if you look at this picture at this daily volume profile and the point of control in here, then what you basically want to do is that if price revisits this place

in the future, makes a pull back to this place in the future to this level to the point of control, then the institutional traders who are active in here, who created this point of control, will become active again. They'll defend this place and they're likely to push the price up from here. This is a long trade scenario. Long trade scenario would look like this,

from here. This is a long trade scenario. Long trade scenario would look like this, right? Pull back from below the point of control and then you go short from the level. So basically

right? Pull back from below the point of control and then you go short from the level. So basically

the logic behind what I'm going to show you is institutions defending the place where they were active before which is the point of control. Okay. So let me show you long trade scenario.

Let's take a look at this volume profile. It has a very nicely visible point of control which is right here at this level. That's the point of control. Let me draw a line here. The price went up from this point of control made a pullback to it and then the buyers who are active here those

institutions started to buy aggressively defend the long positions which they placed in here and result is that the price went up. All right. So that's the long trade scenario. A short trade scenario is take a look at this profile and the heaviest volumes in this profile right here. This

is where the volume profile is the widest and this is the point of control. And take a look at this.

Price made a pull back to this level. And then the sellers who are active here, those institutional sellers started to sell and that resulted in the price going down. Right? So this is the short

trade scenario now. Here is a guide how exactly to trade the point of control. So the first step is identify the point of control. That's easy. That's where the volume profile is the widest, right? So it's this level. This is the point of control. Then you want to wait for the price to

right? So it's this level. This is the point of control. Then you want to wait for the price to move away from the point of control. Let's say that it goes up and then you wait for a pullback.

This is the pullback. And then you enter the trade at first touch. That means you go long from here.

And you also want to trade only the first test. Right? That's at least how I trade this. I only

traded the first test because in my opinion and experience uh they have higher probability of a successful reaction. A short trade scenario would be again uh you mark the point of control and if

successful reaction. A short trade scenario would be again uh you mark the point of control and if the price goes down from the point of control you wait for the pullback and when the price hits the

point of control you go short. Right? This is the short trade scenario. Now what I actually do and what I currently prefer is an alternative method. It's very very similar only you don't place the

trade entry at the point of control but at the beginning of the volume zone. Let me show you.

uh because the way I look at it is that the support or resistance is not just the point of control line but it's the whole heavy volume zone where the point of control is. So in this case this would be a whole support or resistance zone. Let me do a little drawing here. This is the

whole zone right? Support or resistance zone. Not just the point of control but the volumes around it too. So if the price goes up from there, makes a pullback, then I don't actually place my

trade at the point of control line, but I place my trade at the beginning of that heavy volume zone, which is here. This is my long trade entry at this place. Uh the reason is that I started to notice that I'm missing many trades. Uh when I was trading from the point of control from that

level exactly I was missing a lot of trades. Many times the price just reacted a little bit sooner.

So I started to place uh the level the entry level at the beginning of that heavy volume zone and my results improved a lot. So this is a little you know tweak to that strategy that I'm currently using and it works nicely for me. So this is long trade scenario. Uh short trade scenario

would be if the price went down from that point of control made a pullback then the short would be from here from the lower border of that heavy volume zone. Right? So that would be the short.

All right let's get to some examples. So first take a look at this volume profile. It has point of control in here. So let me draw a line there at the point of control. And what you do is you wait for the price to move away from that point of control. In this case it goes downwards. That

means sellers are in control. So it was sellers who were active in here accumulating their short positions here. Then those sellers push the price downwards. And currently we have the information

positions here. Then those sellers push the price downwards. And currently we have the information that at the point of control there are strong sellers, right? So we wait for the pullback.

When price hits the point of control for the first time, you hit the short and that's it.

There's also one more here. Take a look at this profile. It has point of control right here. The

price moves away from the point of control, makes pullback to it. And this is where you enter short.

Right? So this is a short trade scenario. Now here we have a long trade scenario. Take a look at this daily volume profile. The point of control is right here. Draw the line and you need to see

the price move away from the point of control. make a pullback to it and when it hits your level then you go long from there. All right. So that's the long trade scenario. From here you go long.

Now in this example take a look at this volume profile right here. And the point of control is here. Now let me show you something. If you are trading from the point of control like this,

is here. Now let me show you something. If you are trading from the point of control like this, then this would be the pullback. You'd be looking to go long from here. But as you can see, the price missed that. And this is actually what was happening to me so often. And that's why I started

to trade from the beginning of the heavy volume zone. So the way I trade this is I place the level a little bit higher to the beginning of that heavy volume zone which would be somewhere in here and actually go long from this place. As you can see price hit that level and immediately went up.

Right? So beginning of a heavy volume zone did the trick. All right. Now, this is the same chart only zoomed out a bit. And I want you to take a look at this profile. It has the point of control right

here. And if I extend the point of control like this, then you can see that after the pullback,

here. And if I extend the point of control like this, then you can see that after the pullback, this would be where I would be looking for long. But yeah, the price just missed that. It would

be missed trading opportunity. At that point, I would just discard the level. But as you now know, the way I trade this is I place the level at the beginning of a heavy volume zone. So it would be somewhere in here because this would be the area where the heaviest volumes were traded. So I would

place my entry somewhere in here and it would be a winner. Right? So this is exactly why I've altered the strategy a bit so I don't miss trades like these. All right. Now, what I wanted to show

you is when not to trade the point of control because this is also very important knowing when a strategy does work and when it does not because there's no strategy that would work all the time, right? So, when not to trade the point of control. When you notice that the market is going sideways

right? So, when not to trade the point of control. When you notice that the market is going sideways in sideways price channel like here then you don't want to trade the strategy of point of control pullbacks uh that I just showed you. The reason is that point of control in a rotation is

usually somewhere in a around the center of the rotation. So this is the point of control of the first profile. Second profiles point of controls is in here. Then there's point of control in here.

first profile. Second profiles point of controls is in here. Then there's point of control in here.

The last profile has point of control in here. So as you can see, it is somewhere around the center of that rotation channel. Right? And when the market is moving like this, what you want to do, you want to trade from the borders of the rotation, longs from here,

shorts from here towards the center of the rotation. And the center of the rotation, the point of control is actually a nice place where to take your profit. When you are going, for example, long from here, then the point of control is good place uh for the take profit, right? It's not a

support or resistance when the market is rotating. In this case, it works as sort of a magnet. The

price is moving around it and the point of control is around the center. Right? So, this is where not to trade the point of control strategy. In this case, you want to use the point of control as a takerit. Now, talking about take-profit, we also need to cover takerit and stop-loss placement for

takerit. Now, talking about take-profit, we also need to cover takerit and stop-loss placement for our strategy. Right? So uh the rules are very simple. Let me show you. Take a look at this

our strategy. Right? So uh the rules are very simple. Let me show you. Take a look at this profile. This is the point of control. So again what you do according to the strategy you print a

profile. This is the point of control. So again what you do according to the strategy you print a line here on the chart, wait for the pullback and when price hits the level then you go short. Right

now let's discuss the stop-loss placement first. Stop loss needs to go in low volume area where nobody really was interested in trading. Right? So take a look at the profile and the low volume area

would be in here. This red line, perfect spot for the stop loss, right? Because this is the heavy volume zone and this zone is a resistance. The whole zone is a resistance like this.

And you want to place the stop behind that resistance because if the price goes past the resistance, there's no way of telling where it will go next, right? So that's where you want to cut your losses. So remember, stop loss needs to go behind a heavy volume barrier like in here.

Now talking about the takeprofit, you want to take the profit before the price reaches heavy volume zone. So if you look at this profile right here, this is a heavy volume zone and that heavy volume

zone. So if you look at this profile right here, this is a heavy volume zone and that heavy volume zone could potentially represent a strong support, right? This could represent a support. And when

you are short from here, you don't really want the price to hit a support and ruin your trade, right? So when the price hits the beginning of the support, which is here, this is where you

right? So when the price hits the beginning of the support, which is here, this is where you take your profit, right? At the beginning of the heavy volume zone. So again the rule for the stop loss is stop loss goes behind a barrier behind a barrier and take profit goes before a heavy

volume barrier right simple rules. Now let me give you one more example to demonstrate this.

So take a look at this profile right here. Nice P-shaped profile with point of control in here. If

you are trading with uh the alternative strategy that I currently prefer, then you want to place the long level a little bit above the point of control at the place where the heavy volumes are beginning. So this would be the long trade entry and stop should go behind this heavy volume zone.

beginning. So this would be the long trade entry and stop should go behind this heavy volume zone.

So this red line is stop loss because this is the low volume area, right? So the stop loss goes behind heavy volume zone according to our rules. And now when the price reacts to our long, we need to look for place to quit the trade. And if you look at this profile, nice D-shaped

profile, then it has heavy volume zone with point of control in here. The beginning of this heavy volume zone is right here. And there's a chance that the price will react to it like this. You

don't want that when you are long, right? So that's why you quit your trade in here when the price reaches this barrier because the risk is that it will react to the barrier. In this case, it did not react, but it could have. And that's why you put the trade in here. Right now, let me

demonstrate this on a couple of more trades. Those are real trades which I publish for members of my trading course every day. Those levels that I publish for them are published in advance so everybody can trade them with me. So let me now show you a couple of them to demonstrate how we

uh trade the point of control. So this is a recent trade we took on the ENQ. Um take a look at this profile here. The point of control was right here and our level where we went long from was

profile here. The point of control was right here and our level where we went long from was this line. The market opened with a gap. Then the price went up from that point of control,

this line. The market opened with a gap. Then the price went up from that point of control, returned back. It was rather quick and from there reacted. We went long here and the price went up.

returned back. It was rather quick and from there reacted. We went long here and the price went up.

The stop-loss placement regarding to the rules which I showed you uh should be in here in this low volume area. But what I've done instead, I placed it a little bit lower because I want the trade to breathe and I placed it below this low. So I placed the stop in here. And

regarding the takerit, if you look at this volume profile, this one, this was the point of control, the place where the heaviest volumes were traded. And this was where I took the takeprofit, right?

Because I didn't want to risk it. I didn't want to risk that the price will react to the point of control and go downwards again, right? So that's why the take profit was in here. As you can see, this is more or less riskreward ratio. one trade. My rule for this is that I want to trade at least

with risk reorder ratio one. All right, that's the minimum. So this was risk reorder ratio one trade and yeah, this is how it went. Uh let me show you one more. This is a trade which I took recently on the US dollar Japanese yen. This is a 30 minutes chart daily profiles. And if you look

at this profile, then you know there's a point of control that stands out very nicely. This is the point of control. And again, I like to trade from the beginning of that heavy volume zone where the point of control was formed. So it was this level. The price moved away from that point of control,

made a pullback and this is where the price hit that level. And at first touch, this is uh where I went short. The stop loss for this trade was in a low volume area. It was in here.

And the takerit was based on heavy volume zone standing in the way and it was this heavy volume zone. So that's why the takerit was in here. It was a trade with positive risk-to-reward

zone. So that's why the takerit was in here. It was a trade with positive risk-to-reward ratio. So, it was quite a good trade. Okay, last one, last example. This is US dollar,

ratio. So, it was quite a good trade. Okay, last one, last example. This is US dollar, Canadian dollar. And take a look at this profile here. This is where the heaviest volumes and

Canadian dollar. And take a look at this profile here. This is where the heaviest volumes and the point of control was. I was trading from the beginning of that heavy volume zone. So,

this was my trade entry. Went short from there. My stop was in here. If I extend this line, you can see that it was behind this heavy volume zone. So, behind this barrier. And regarding the takerit, I actually didn't have a heavy volume zone standing in the way. So, I was looking for some

different barrier that would stand in the way of this trade. And uh there was a weekly VW up here.

That's the blue line. So, I quit the trade when the price hit the weekly VWAP. By the way, VWAP is also a good place for uh taking profits like this. But, uh that's another topic for another video. Uh

this is how the trade went. This is where I took the profit. If I only had the patience, I would actually be able to quit the trade before it hit the first heavy volume barrier. The price actually reached this place. So, it would be like insanely nice trade if I managed to hold it that long. But,

you know, I'm not like that. I probably wouldn't be able to hold that trade that long. So, that's

why I was searching for a closer place where the quit the trade and it was the VWAP. Right? If I

had the patience, then I would, you know, follow the rules and just quit the trade when it hit the heavy volume zone in here for me. That would be probably just, you know, too much to handle.

Anyways, as I was saying, those levels are levels which are every day in the members area. I do

updates every day and all the members have access to them and they know where I will be trading that day. Uh I give them the levels in advance. So they have hours and hours, sometimes even days before

day. Uh I give them the levels in advance. So they have hours and hours, sometimes even days before the level which I marked for them to trade gets hit and before you know they can trade it with me.

And if you guys want to join us and get a volume profile trading education, get my indicators, get access to my daily levels and swing trading levels, get access to our tech support, then visit our website. It is traderdale.com. If you click trading course and tools, then it will

take you to this page and in here you can get one of my educational and indicator packs. If you're

interested in volume profile trading, then go for the volume profile pack which includes the volume profile course. That's like 15 hours of volume profile training. It includes my trading signals

profile course. That's like 15 hours of volume profile training. It includes my trading signals every day. Includes my custommade volume profiles for various trading platforms like Ninja Trader,

every day. Includes my custommade volume profiles for various trading platforms like Ninja Trader, Metatrader or Trading View. So you can get that and join our members and uh we can trade together.

And if you guys are interested in trading with me and other proper traders every day in the live trading room, then you want to click the FTA button. It stands for Funded Trader Academy.

Here's a page where you can learn more about the Funded Trader Academy. You can book a call with us and uh we'll explain the service and then you can decide whether or not uh this is right for you.

But let's now go back uh to the presentation because there is something very important which I wanted to show you and that important thing is what to do when the point of control fails because so far I've been showing you nice scenarios and nice traits where the point

of control worked like a charm right but let's be real it doesn't work like a charm all the time so um if point of control fails that means that the there is a change of sentiment And what you can do is you can take a reversal trade. Reversal trade is that you trade the

same point of control again but from the other side. Let me show you. It will be easier if I do a little drawing here. Um take a look at this profile. Nice D-shaped profile, right? The price

moves away from that point of control. That's the point of control line. moves away from it, hits the point of control in here and this is where you go short. Right? As you can see, it is a

losing trade. So, the point of control failed. The price shot past that level. Now, what comes into

losing trade. So, the point of control failed. The price shot past that level. Now, what comes into play is the reversal trade. You extend this line a bit. Wait for the pullback and at the same level,

the same point of control, you enter a reversal trade, which in this case is a long. That's the

reversal trade. You would be surprised how often this works and how often this reacts to the pip to the point of control. Right? So what I'm always saying to my students is point of control just by itself is very very strong level. If the price doesn't respect it and just shoots past it,

it is a very very important information. It doesn't really mean that the point of control was a bad level to trade. It simply means that buyers are stronger. They pushed through and that the sentiment changed and we need to adapt. Right? So that's why you wait for the pullback and very

very often the market gives you the chance to enter at that level again right very very often there is that pullback and this is the reversal right if you previously went short took a loss then reversal would be taking a long from the same level from the same point of control let me give

you one more example of this take a look at this profile Here this is the point of control, right?

Price moves away from the point of control, makes a pullback, you go long and take a loss. The price

shoots past the level with no reaction at all. So what you do is you wait for the pullback and when the market gives you a chance to jump in a new short from here, then you should do it. As you can see, this would be just the perfect chart, right? So, this is the reversal trade. Ideal scenario is

when the price shoots past the point of control very very quickly with no reaction at all. Even

you know could be for example during macronuse. It's completely fine if it shoots past your level in macron right. So, this is the point of control. The price shoots past it. ideal scenario that you know this is aggressive candle huge candle could be macronuous candle that's fine if there's no

reaction at all that's perfect scenario for the reversal right now let's do a very very brief summary of uh what we talked about today right so point of control you should remember that it's the most important place on the chart because it shows where institutions are positioned

Because of this, it works as a strong support and resistance zone. And the way to trade this is you want to trade pullbacks to the point of control. This is a long trade scenario pullback. This is

a short trade scenario pullback. Next thing to remember is that you shouldn't trade the point of control when the market is in rotation because in this case the point of control works as a magnet, not as a support and resistance. And last but not least, if point of control fails, then you take a

reversal trade, right? So if this is the point of control, price goes up, makes a pullback, you go long, but the price continues to go down. Then you wait for a pullback and go short from

there. This is the reversal. All right, guys. So that's about it. And here is a little gift as a

there. This is the reversal. All right, guys. So that's about it. And here is a little gift as a thank you for staying until the end of the video. Uh this is my bestselling book, Volume Profile: The Insiders Guide to Trading. And uh I'm giving away free physical copies, and I'll even cover the

shipping. It's a gift from me to you for staying until the end. I'll keep sending the books until

shipping. It's a gift from me to you for staying until the end. I'll keep sending the books until they run out of stock. And if you are in the US, just click the link below, fill out the form, and I'll send it to you. No strings attached. Just enjoy the book and let me know how you like it. All right, so that's about that. Thanks for watching the video. Thanks for sticking until the

it. All right, so that's about that. Thanks for watching the video. Thanks for sticking until the end and I'll be looking forward to seeing you next time. Until then, happy trading.