Education · Stage 8 · 03
Support and resistance with a profile
A profile gives you levels that were not drawn by anybody — they come out of where trades actually happened. That makes them unusually honest, and it does not make them permanent, which is the half that gets left out.
Mak · 4 min read · Stage 8, article 3 of 4
Thick areas slow price down
A high volume node is a price where a great deal of business was done. Two mechanisms make it matter later, and both are ones this path has used before:
- People have positions there. Everyone who traded in that area has an opinion anchored to it — somewhere to add, somewhere to get out at breakeven, somewhere that felt reasonable once.
- It is obvious. Everyone drawing a profile sees the same fat section, so instructions collect around it. That is the same reason the previous day's high matters, arriving by a different route.
Which side it acts on is simply geometry: approached from above it tends to work as support, from below as resistance. Not because the level has a preference, but because that is where the business that would slow price down is sitting.
Thin areas do the opposite
A low volume node is a price nobody wanted. When price returns to it, there is little resting interest to slow it down, so it tends to travel quickly.
Worth stating carefully, because it is the most commonly over-read part of a profile: an LVN is not a target and not a magnet. It is an area where movement is cheap. Price may not go there at all — and if it does, it is likely to cross quickly rather than stop.
The point of control, honestly
The POC is often described as a magnet. It behaves like one on the condition that the market is in balance — which is not a small footnote, it is the whole thing.
In a balanced session, price rotating around the price where most business happened is exactly what «balanced» means. Saying the POC attracts price is a restatement of the observation, not a force acting on the market.
In a session that has broken away and is discovering new prices, yesterday's POC attracts nothing at all. It describes an agreement the market has already left.
The value area edges
The VAH and the VAL are the boundaries of where most business happened. They are worth marking for the same reason as everything else in this stage: they are visible to everybody who uses this tool, so they are places where reactions concentrate.
The useful question at an edge is not whether it will hold. It is the one the whole order flow stage was built to answer: when price got there, what happened? Volume arriving and price refusing to leave is a different event from price drifting through on nothing, and only one of them says the edge meant something today.
The part that gets left out: these levels age
A profile level is not a permanent feature of the market. It came from a period you chose, and it wears out.
Each time price trades through an area, some of what was resting there is consumed. A level tested four times is not the level you marked.
This is the same rule as the life of a supply zone in the previous stage, and it is the reason a chart covered in POCs from the last three weeks is worse than a chart with two. Old levels do not become stronger by surviving; they become less informative, because whatever gave them meaning has already traded.
Two habits keep it honest: use recent periods, and mark how many times a level has been tested. The second one costs nothing and changes what you do with the fourth test.