Volume profile trading strategy: Bulls safeguarding S&P 500 PoC at apx. 3970

Bulls are protecting the Volume Profile Point of Control (POC) in the S&P 500 technical analysis, signaling a bullish market trend. This technicak analysis from the ForexLive.com Youtube channel focuses on the volume profile and how to trade it to improve your trading tactics:

Volume Profile? Watch 3970 on ES (S&P 500 Emini Futures)

Volume Profile is a technical analysis tool that shows total volume traded at each price level over time. It shows traders where most trading volume has occurred in a specific time frame using a graphical representation. Traders use the POC, the price level with the largest volume, to trade Volume Profile. The POC and other major levels are critical support or resistance levels because traders and algorithms react to them.

The S&P 500's POC is 3970, and the blue lines within the above vide, reflect the value area low and high. 68% of trading volume occurred between the blue lines, this is the 'value area'.

The S&P 500 has dropped 5% in 25 trading days as a normal retracement. Despite market volatility Volatility In terms of trading, volatility refers to the amount of change in the rate of an index or asset, such as forex, commodities, stocks, over a given time period. Trading volatility can be a means of describing an instrument’s fluctuation. For example, a highly volatile stock equates to large fluctuations in price, whereas a low volatile stock equates to tepid fluctuations in price. Overall, volatility is an important statistical indicator used by many parties, including financial traders, analysts, In terms of trading, volatility refers to the amount of change in the rate of an index or asset, such as forex, commodities, stocks, over a given time period. Trading volatility can be a means of describing an instrument’s fluctuation. For example, a highly volatile stock equates to large fluctuations in price, whereas a low volatile stock equates to tepid fluctuations in price. Overall, volatility is an important statistical indicator used by many parties, including financial traders, analysts, Read this Term, bulls are defending the POC, and while price stays above, it remains bullish, IMHO.

Traders can set stop-loss orders below the POC as a support level Support Level A trading support or support level represents a given price that acts as a temporary barrier for an asset. In particular, this level ensures an asset’s price will not fall below it or will encounter difficulty in doing so.All assets can utilize supports, be it forex, equities, commodities, etc. A given asset's support level is created by buyers that enter the market whenever the asset falls to a lower price. Basic support levels can be calculated and charted by identifying the lowest lows for a A trading support or support level represents a given price that acts as a temporary barrier for an asset. In particular, this level ensures an asset’s price will not fall below it or will encounter difficulty in doing so.All assets can utilize supports, be it forex, equities, commodities, etc. A given asset's support level is created by buyers that enter the market whenever the asset falls to a lower price. Basic support levels can be calculated and charted by identifying the lowest lows for a Read this Term.

In conclusion, the S&P 500's POC is a critical support or resistance level for traders and algorithms. Trading techniques might be based on protecting the POC, which implies a bullish trend. Understanding and applying Volume Profile helps improve your trading methods and results.

If ES closes 2 consecutive days below 3925, then I will change my bullish premise.

Trade ES at your own risk and visit ForexLive.com for additional views.