Market Profile: Intro to Key Contextual Levels (Point of Control, POC)

all right guys what's going on this is Ryan AKA Kenner and Clark and in this video we're going to be talking about trading naked points of control so we're talking about volume points of control and the TPO chart point of control as well and a lot of times these two are going to be right on top of each other all right we definitely want volume to be confirming price so when we're looking at a TPO chart we also want to see that the volume distribution is confirming it as well but the profiles might not be

identical okay in terms of how volume was distributed throughout the day compared to where we spent our time throughout the day but you'll more often not see that the point of control on a volume based profile and a TPO chart are going to be almost identical all right and there is a problem if they aren't so they actually used to calculate where we spend volume or considered where we spend volume before they're able to calculate it during the day and before they you know in the beginning what they were doing was just adding up end

of day volume and you get the volume from that but they were calculating volume based on where we spent the most amount of time so the area where we had the where we spent the most amount of time if you're looking at a TPO chart that was how they calculated volume just about over 20 years ago okay this is actually over 40 years ago now now that I think about it so we're talking about trading naked points of control all right and I think it's important that again we talk about points and control real quick

all right and down here we have a volume profile again a very a very balanced volume profile and a TPO chart with Divine profile within it and the value area is where we spent 70 percent of the time and where seventy percent of the volume occurred okay so this is fair value when you're talking about the point of control this is essentially the most agreed upon price within the value area so normally the way I will trade a value area will be you know when prices are falling below value it's often a good time to

buy because this is uh this represents a trade that will probably revert back to the mean which in this case is the point of control and when price is above value this represents often a good time to sell because this is more often than not an extension from the pointer control that eventually does return back to the point of control so this is why because it is the most agreed upon area this is why taking trades from the center of a range is not necessarily the best idea okay because there's really not a high probability

of it going either upward or downward the same way that you know when we're extending away from the point of control we're at the exterior of a range you could say with a little bit more conviction that we're likely going to return back to the fair value price all right so you can have a little bit more conviction in selling something when it is above value and buying something when it when it is below value then selling it when it is at the most agreed upon price so the point of control is often a place

that we return to and this is why that it's a good you know it is a potential good support and resistance from a distance when we're approaching it it does represent a good area to take profits into and that's one of the reasons why this trade tends to manifest itself the way it does and that's why also it tends to be more useful on the shorter time frames on an intraday basis and again for for some type of scalper some type of more in and out Trader okay so this is an area that we have

a high probability in returning to all right but there's many times times when this area is left naked okay so a naked point of control is when we have if we're looking at a daily session or a weekly profile this is a point of control from that profile that has yet to be interacted with okay so it is completely uninterrupted so if we're talking about a daily profile and we're talking about the daily point of control maybe we've gone three four you know more than that days without coming back to this area so it's considered

naked it's never been interacted with whatsoever okay it has not been and you'll see when I talk when I when I show you a chart what I mean by that so often again the volume profile opponent control is going to be in the same exact place as the TPO chart point of control so if you don't have a TPO chart using a volume session will be just fine all right and we're going to be using in this example we're going to be using the daily sessions so if you go on to trading View and you

do session profile to immediately pull it up and it will extend the points of control and show you which ones are naked and which ones aren't okay so which ones have been interacted with and which ones have not so these are areas that are likely to have resting bids and offers okay and it's not necessarily because these represent you know primaries to get back into but it's likely because these represent areas to take profit into okay so when we are talking about moving upwards towards a naked point of control this is likely going to be

coinciding with the most dense area of a previous cluster that we formed and this is for that reason likely going to be an area where Traders are going to be taking profit so this represents a good area that is sometimes unmarked because it does sometimes form in that it forms in a way that it's not a Clear candle close or Wick or Confluence of those two that really defines a line it's where most of the volume or you know time was spent so it can be in a pretty ambiguous area within a cluster all right

so putting on the point of control and having a naked point of control extended makes it way more discernible in this manner so this is great for short-term scalps because we likely see at least a decent percentage interaction off these and if we don't we want to be out of them immediately all right so what we're looking for all right is something that has not been interrupted on the daily if we're talking about the daily for at least two sessions all right if we're talking about an uninterrupted weekly point of control it could be the

previous week's point of control and we would likely expect that it will there will be some some type of measurable interaction when we come back to it okay and that's because it's not going to be interrupted until this week that we're currently in comes back to it because it is just the most the most near-term weekly point of control right so we form this week uh the week that closed that point of control you know when we come back to we are likely to see a meaningful reaction off of it we've talked about this in

previous videos but in this video we're going to be talking about taking intraday trades off of previous daily points of control that are naked for the most part we're going to be isolating within those uh those parameters so as far as entry goes this is a limit order entry trade okay um absolutely not a market order entry they say in my opinion is a trade that you placed a resting limit order um to enter all right so if you're looking for a short and you're targeting a naked pointer control that's above us uh it's what

I do is I will often front run this point of control by anywhere from half a percentage okay uh to a full percentage okay so I'll often front run the point of control and then my stop will be no greater than one point one percent away okay from the point of control in the opposite direction I absolutely don't want to be in this trade if it does not show an immediate sign of rejection since many times this area can be in a really freely floating you know middle of nothing type of zone right so sometimes

like I said these are areas where it's not necessarily discernible right away that this is going to be a supporter resistance that we're going to interact with and because of that it's you know it's likely that it might not be that close to the most obvious Market structure that a lot of Traders might be looking toward words so if we completely start making our way through this area I would not hold on to the trade all right this is the type of thing that you need to see a meaningful reaction with and this is the

type of trade that you're not going to be in long anyway all right for the exit as far as the exit goes with this trade I'm only going to be holding it until the most the the the closest sticky area and by that I mean if we came from a cluster that is only a hundred dollars away all right this is going to be the area that I'm going to Target unless okay so if we're talking about where we're going to take profit it's going to be the cluster that preceded the area that we that

we left from okay rather the cluster that we left from before heading into the naked pointer control the only other time that I would say not to hold it at the first sticky area or the first or hold it to the first area we're going to experience friction is if it is enforced or rather substantiated by Major other other major factors rather okay so other things that are confluent with it being a more important support or resistance in that case that we could see a more meaningful reaction from but in that case you're likely going

to be paying attention to that detail first you know this might be an opportunity to look for that area that we could front run that location but in my opinion if you are taking a trade and you're looking at that you're going to see that major area first and you're going to know based on previous Market structure context whether or not this trade is going to be worth hanging on to before you even enter into it okay so when you see a floating area that's you know a naked point of control that's floating there's really

nothing backing it up Beyond it right if you're looking to take a bounce off of it and you're looking to take a bounce off you know if you're longing as we're approaching a point of control that's naked below us if you don't see a meaningful reaction there you want to probably be out of it because this might be the last level before we you know move rather rapidly or accelerate through that point and you should be looking for any signs of stickiness right away in this case when I say stickiness what I mean is you

want to see some type of meaningful reaction to begin with and if you don't see that stickiness and you start to see some type of acceleration through the level this is why you really want to have a stop that immediately invalidates this that is kind of just a fixed stop so that's why I only use something like a one percent stop maybe a two percent stop maximum but in that case if I'm using a two percent stop this is probably going to be informed by other factors as well so let's take a look at a

chart and I'm going to show you what this looks like on the market profile chart but then we're going to look at the trading view chart because that's where all of you can just add your session profile and you'll be able to see where all the naked points of control are right away all right so here's the market profile chart and we have three examples right away of naked points of control so this is the current week right here all right and we have three points of control that are still naked in this case they're

still yet to be interacted with and this makes sense right the most recent trend is uh strongly up and the first two days were one time frame days we had one side in control pretty much from open to close this leg up out of this range you know we have not come down here because this trend has not changed yet so these are naked we have not interacted with them and that's why they are extended all the way to the right so we do have some more as you can see when we move down you

can see that we have a naked point of control that more or less corresponds with a three-day range where we have a really inside three-day range so this point of control down here might be pretty useful and this is probably a key area within the weekly structure regardless because we have a major Confluence of price action ranges within this area to begin with but just giving an idea naked point of control still yet to be interacted with this was a naked point of control okay so for two days this was a naked point of control

until we came up and interacted with it on January 11th and you can see this is a perfect example of that okay so this is a daily session in this case we came up and interacted with this point of control and immediately came back to the in this case area that we left from which was this cluster and that's why I say try to take profit into the most recent sticky area or write the most recent area that you left from that would be sticky and returning to again just giving you some more examples before

I show you the trading view chart another point of control over here that was naked for a long period of time I'm not even sure if this was one that had a good interaction off of this one had maybe a hundred dollar interaction off of again but you know what you're doing is you're taking it down to the most recent sticky area which would take you down to this high so yeah this trade would have worked in your favor but again that's not really the best outcome right so in this case if you held on

to this longer and you didn't take profit at the last area that we left from again the most recent cluster you would have probably held on to this trade and if you didn't have a proper stop placement Market would have moved pretty pretty heavily against you but we have a bunch of cases where naked points of controls are are on this chart so right here again right up here again right up here all right so more often than not we'll see an immediate reaction off of these and if you're looking to scalp it'll be a

really good trade to get in and out of but again here's a really good way of looking at it on the trading view chart because some of you don't have that market profile chart and tradingview actually offers this indicator it's called session volume and with them what they do is they do the same thing saying where naked points of control are going to be left on and they will be extended all the way to the right side of the actual chart that you're looking at so until they are interacted with they will remain into uninterrupted

and it's going to be pretty obvious to see these so I have a few examples here of areas where it might not have been as obvious that these would have been areas that we would have interacted with but you're looking for the first touch that's what's one of the most important details right so we're looking for the first touch after spending a good amount of time away from this so in this case we have a point of control that is from I think it's November 29th you know we have one profile two profile three profile

four profiles before we actually come back to this area before we have any interaction with this area so in this case I'm going to be front running this trait I'm going to be placing a limit order at this point of control I see that the market is moving through this range and this is going to be an area that I'm going to be paying attention to okay and in the event that the market is moving up in anticipation of the market coming to this area yeah I'm going to be placing a stop that is just

one percent away all right in this case we fall within it just happens to be in this example we are 80 basis points right so under a percentage uh it tends to work out really well for us in this case because we actually come all the way back down to the area we left from but I would not say that you know this is how it's going to happen all the time another case where we have multiple touches multiple areas where we could have front ran a point of control you have this naked opponent control

extending all the way forward and in this case if you front around the point of control you can see the right here if you just front ran it by a third of a percentage you would have been in this you could have gained gained entry rather in this quite a few times all right again not an area that is necessarily an area that you might look to because this is kind of No Man's Land over here but this is an area where we did agree on and have not interacted with since but because of that

it's likely narrow where we'll have some resting bids and offers right in this case resting bids and again I would not be holding on to this trade because it is extremely dangerous to be holding on to a trade in a low volume area so we have our one percent stop distance as a margin for error in this case if we're front running these we're gaining entry into any long that we would have initially taken here now I have to say that the first long is probably going to be the only long that you should take

because if you are seeing that this area is interacted with you take your entry and you take your exit at the area that we left from you're likely not going to want to get into this trade if we revisit this area given the fact that it's kind of in no man's land so you get your first trade you're looking for in and out all right you're not looking to abuse these areas so again naked point of control we have one two three days that we don't interact with it and we have our first interaction down

here and you actually can't see with this green box but we come right into this area come right into the point of control and where do we return to all right again and probably should have my drawing tool out here the area that we return to is the area where we had a previous cluster so you're looking at the previous lows in this case the previous cluster we come down from this point of control and in this case I actually that's not the point of control excuse me I drew on the wrong part of the

chart here is the point of control we come to the previous closing cluster all right so previous cluster is you're going to be your first sticky area so you're looking at very small trades right you're looking at small scalps again this trade is only right we're looking at a percentage trade it's a very even trade so this is why you need to have extremely quick invalidation right more often than not you're going to look at this rather and you're going to say if in this case I'm looking for this point of control to interact is

this trade even worth taking right there's many trades that are not even going to be worth taking because in this case our Market structure is really not attractive right from Aristo returns a risk to return standpoint right we're looking at a stop distance that is maximum one percent away you know you could put a tighter stop on this but you'd be taking a little bit more risk of being stopped out early right so this is a one-to-one maybe not an attractive trade to take to begin with okay here we have again that point of control

Revisited so in this case maybe you re-enter on this trade because this has yet to be interrupted and we've painted this entire Market structure above it so you might be looking for other Confluence in this area that might be even a swing failure pattern right we're coming through a major swing area within Market structure this might be a good opportunity at this point to get back into the trade right again we're still uninterrupted we spend a good amount of time above this structure right we have this major swing into this structure what do we do

we break the low this is a swing failure and a touch of this naked point of control so again this represents an area that might be an attractive area to place a limit order into all right because we have this area that's being approached that represents a potential swing failure pattern and you're looking at this and you see that we have a session point of control that is yet to be interrupted now this trade is probably you know the creme de La Creme in terms of points of control we have an uninterrupted point to control

point of control from this cluster over here major cluster all right the last day of this cluster before the breakdown you have this point of control extending all the way from one two three four five six seven eight nine days in the future all right now in this case we're looking for an area that's uninterrupted and we're not taking the last two days or anything before the last two days so you can see that you have your point of control right here the Merit or rather the reasoning for taking a trade into this area if

you're looking to short this area is just purely based on structure but I'm looking up at this point of control that has been extended for over five days now all right and in this case this represents an area that is maybe not as easy to spot all right with the naked eye because we're looking at if we're looking at a daily chart or a weekly chart or a four hour chart we might have an open or in this case we might have a closed cluster that doesn't really look to be compliment with that point of

control so you're looking up here okay in this case that's the point of control again extended but again we're looking at a four hour chart if we're looking at a daily chart see again we don't really have anything that shows us that this is the obvious area that we want to get involved in the trade again these are not lining up whatsoever you know maybe you want to go on the last day maybe you want to go on the Wix you're really not certain you're going off of the daily profile if you go on to

the hourly chart now it becomes a bit more obvious a bit more specific where majority of that trading took place within that structure now you have a key area where you could be placing limit orders to enter into if you're looking to a looking to enter into a rejection of this area so we're looking to enter into a short we're not really not sure when we're looking at a naked point of control now we have a bit more clear of an idea as to where to get involved and again stop one percent away in this

case you're taking this trade back to the most sticky area which is great for this case because we have nothing that occurred down here until at least here so if you're looking at this trade you're at least looking first place to take profit would be right here some people might consider taking it down to this cluster here that we broke out from all right but at least in this trade you're looking to take it down to this structure which sets you up with a really reasonable trade all right you're looking at a three to one

in this case so again you get the idea extending these moving forward you can see all of the uninterrupted points of control and the point is that you're taking intraday trades based off of these okay you're taking lower time frame trades you're looking for a quick ins and outs all right if the trade does not go in your favor immediately you can likely cut the trade with confidence that you're not going to be stopping yourself out prematurely all right even if you're front running these positions a little bit early and by early I mean maybe

a third of a percentage so moving this forward all right into the most recent history uh you see again we have these points of control that are still yet to be interrupted so we're looking at 9020 area okay 8626 8575 and remember I said there are times when you might consider that these pointer controls are sub or rather these naked points of control are substantiated by other factors so again what might be a good area that that might occur probably down here right because we mentioned that 8750 would be an optimal area that's right above

this area and it's 87.50 to me or 86.50 right so I mentioned those two areas and again these naked points of control in this case if we did come down into this area why not stagger some orders in the in this in this area or rather look at it this way if you're looking at placing a stop for this structure this might be a good area to place your stop outside of okay because at this point we have major Confluence between Market structure between volume profile points of control and the value areas for previous weeks

all right guys so hopefully this been has been effective again remember naked points or controller areas that we have not interacted with these are fair value areas previously these are likely going to be areas where we will see a meaningful initial reaction you're going to want to see an immediate reaction if anything this was an area where buyers and sellers really agreed on previously will likely see that there'll be dormant orders to take profit here and what we want to do is at least front run that slightly so that we could get in with that

group taking profit prematurely and be able to capture a little bit of action so this is primarily intraday trade shorter time frame scalper Type move and again you're going to be putting a very tight stop on this because if it moves against you you do not want to be stuck in the trade more often than not these can be in no man's land right so pretty much No Man's Land all right so that's that guys hopefully this has been informative if you have any questions as always feel free to reach out it's been a pleasure

this is Ryan with block Roots exercise proper risk management and trade effect