 Hi everybody and welcome to the webinar hope you have all spent nice Eastern holidays and today we will go deeper into the volume profiling principles we have already introduced last time. By the way, today S&P 500 is giving me the perfect scenario and act as a brilliant example of what I'm about to show you. Let me just show you briefly how it looks like. Before we get started, let me just quickly remind you the promotion still on by volumetrica trading and tick mill, which allows you for those who are already tick mill customers to get the bolses licensed at a special price. For those who are not customers already you can still request a temporary free demo emailing info at volumetricatrading.com. Let me just write down the email address in the chat so you can have it. Here it is. This is for if you want to request free demo and this is the link to access the promotion. Once you get, once you click the link, you'll get to this page where you can purchase a license for a special price reserved for all of you who are tick mill customers already of course terms and conditions apply. Oh, and another important thing just in case you want to get in touch with me and maybe make ask me some questions about the thing we are talking about during this series of webinar. This is my email address so you can email me and just in case you want to ask me something about the profile about the web about the things we will be talking about. Okay, so let's get started straight away and let's have a look at the S&P 500 today is trading. So last time, basically, we were talking about the volume profile basic principles like what acceptance is what value area means what the POC is and what it's what you represent in terms of representation of volume. Okay, and right at the end before before the webinar was ending, we started introducing the concept of balancing. Okay, what do I mean for balancing balancing is the process, according to which the market is facilitating trades around a specific area. Okay, specifically what I'm talking about is when price acceptance when when price starts to get accepted around a specific area. What happens to the volume profile a volume histograms, they become always thicker. Okay, so you will see you will notice that the volume that the high volume note basically are getting always very important. Of course, that makes a huge difference compared to the low volume areas we were talking about last time, which as we were saying, they tend to behave as a rejection area. Okay, unlike high volume area where we tend to have more price acceptance. So basically what happens when we have balancing balancing is the process where market is facilitating trades. So basically, an area gets probed. The price gets to explore a specific price area, and it starts building some volume around the area. Okay, but of course, that volume, the building of volume around the area of the volume profile is a process that takes some time. It doesn't happen straight away. Price tend to accept and make it to distribute to make a distribution a proper distribution around the specific area over and over. And price moves. That means we, every time we see specific volume profile areas with some volume, which have which which has traded around that area within that area. We will tend to see price going back and forth moving around that area so basically price is tends to make range around that area. This is the basic principle of distribution and of course the basic principle of balancing. So why do does market tend to balance price area, basically just because if we talk about volume volume is often a synonym of liquidity. The fact that much volume is traded over a specific area. That means that their market participants are willing to trade willing to exchange to buy or sell. Okay, so what happens, all of this volume that we can see here which has traded is the result of this participants willing to trade. So basically what happens is that this is the basic principle of which we can use in terms of trading volume profile and how to use it in order to recognize immediately which price area we have as cold or less interest by market participants is to spot whether we have volume traded or not. Okay, because wherever we have some volume traded, like here, for example, we can tell price was here accepted. Okay, so basically market was facilitating trading trades here. But then, what happens, we can see, as is in this example, we have much more volume above this area, I am highlighting here. So that should mean we we have even more accept acceptance here on the top of the day. Okay, it is, it is actually it is true. But we still can tell by this particular shape of the volume profile that right below this high volume area at the high of the day, we still have an area where price was accepted so market participants were willing to trade. But this is this area is not 100% properly balanced. What do I mean for that. Normally, we can consider a balanced area. All of those volume profile, all of those market areas where volume profile indicates us something similar to a belt shaped curve. Okay. Because this is the standard model of the distribution. That means lots of volume is traded here at the middle. And when we get far away from the middle, we tend to have always less volume. Okay, until we get to a point where we have zero volume at the top and zero volume at the very bottom. This is the basic model of the distribution of volume. And of course applies to and to some other many other things. But let's talk about volume. And when we don't have a profile shape reminding us of a belt shaped curve, then we can tell that that area is still an unbalanced area. And that indicates us that price will be trying maybe to go back into that area in order to complete the process of balancing that area. And that gives us many important indication for our trade, especially in terms of understanding what the price structure is of the market. Let's, let's, let's analyze, for example, the day what what today's okay, you can, you can see we have lots of volume here at the top. And POC was shifted here. Why? Because of course, S&P 500 started trading here at around 4390 and started moving upwards and with not that much volume and then starting to started to build some volume right here. And we are still trading in that area. Okay, so right now we are trading in the most trading area of the day on the POC, the point of control as we were saying last time. What does that mean? Considering the point of control is supposed to indicate is supposed to tell us and balanced price for the day and equilibrium price for the day price where both sellers and buyers are willing to are happy to trade because both of them are they're sure they're gonna make a good trade and can make money out of it. Actually, since this POC is completely unbalanced according to the range of the day that already shows us an anomaly. Okay, why? Because POC is normally supposed to be in the middle of its value area. Okay, of course, I'm not saying that it has to be right in the middle at the exact center of the value area, but let's say every time POC is not really placed in the middle part of the value area, that shows that there is something wrong with the price. I mean, not really, there's not really something wrong. Is it a distribution of volume that is telling us something? And in this specific example, what is price telling us? I think shifted POC right here. It can mean two things actually. The first, and of course, we have to find out the one that applies the most of the at the scenario of the day. The first thing is that maybe all of this volume can either stop the price or give the price of support to go back to go, sorry, to make an upward continuation. Okay, and of course, that makes sense because since there is a lot of volume trading here, this volume can act as a support, as a temporary support for the price. But in this case, or sorry, let me just tell you that in a couple minutes. Second scenario, it can happen that this high volume area will act as a resistance and then price will start to trade lower. And in this case, of course, what would happen to this profile? It will be slowly filled over this area. Of course, if price would start moving this way, volume will grow right here. And this area of the volume profile will be balanced. Okay. And maybe in such a scenario, at the end of the day, we will get a daily volume profile getting this kind of shape like this, or maybe like this. Trying to balance, to make a similar, it's shaped similar to a bell curve, because price will always tend to look for its balance point. Okay. So, of course, that kind of confirms what we were saying last time about POC. POC should never be traded. Why? Right? Because we can't predict what is going to happen from its point on. Okay. And exactly at this moment right now, we can't tell. I'm not able to tell if price is going to move higher or lower. Okay. We need to look for price confirmation. And how can we look where? What kind of confirmation we can have by the price? First of all, we need to see how price moves away from the POC. Because as we said, high-volume nodes, high-volume nodes, and of course POC is the most important high-volume node of the day, it needs to move far away from it, and then it needs to make a small pullback on it. On the pullback, we will have the confirmation, even by its price action, of what price is willing to treat this high-volume node if it wants to treat it like a support or as a resistance. In this case, of course, as many of you have understood already, balancing is one of the first strategy we can apply to the volume profile analysis. Because right at this stage, what we could think about, we could look for price to move maybe below the POC. This first leg moving below the POC will give us the first clue of price acceptance right per year, and some volume maybe a company price during its first leg. And with a pullback, which would respect the POC as a resistance, then we will have a confirmation that this POC is being treated as a resistance. And with the POC as a resistance, of course, our scenario of balancing all of this area below the POC will of course be confirmed, or at least move that price, an evidence given by the price, which can give us a clue of what a possible scenario would be. Let's talk about the other possible scenario. What if that won't happen and POC will be treated as a resistance? Something like that will happen. Price will move upwards, will come back here to this level, and make a pullback before continuing higher. In this case, why? How? Can volume profile help us in order to track the market structure? Personally, let me just tell, personally, I don't think that will happen. I am more, let's say, confident about the first hypothesis, but let's assume price wants to continue higher. We said POC, in this case, it doesn't express equilibrium at all. It doesn't express a balanced volume area at all. But if POC is supposed to stay here, that means that maybe, maybe this volume profile will have to be extended. Let's imagine the shape of a bell curve. That could be just the lower part of an hypothetical bell curve, which will have an extension up to here. In both cases, volume profile helps us to tell according to its structure, and if it tells us, if it suggests us an unbalanced structure, what the price is likely to do in the next, in the next minutes, in the next hour. And of course, that takes a very important skill, the ability of perceive what its next shape is going to be like. Of course, we can't try to predict things and trade on them. I'm perfect. I'm perfectly aware of that. And let me be honest, as I was telling you, I always like to enter trade with the most certainty and so because I want to have tight stop losses. Okay, but this is the reason why volume profile, it is a fantastic tool to track and have an idea of what market structure is like, but it's not enough as a tool to then trigger the trade. Because if we want to validate scenarios got by volume profile, like it is, we need two things basically, we need the price action to confirm what the volume, if the scenario we have thought at is really happening is about to take place. And then we need another flow too. So something that we will open right at the moment when our scenario is about to happen, and we will use it to validate our scenario. For example, for instance, as I was telling you, as I was perceiving price is moving below POC right now. So I could tell I can tell that price is already building as light acceptance over here over this area of the profile. So, as we said, I'll have to wait in order to validate a short trade pullback on this level, right at this level on the POC, back to the POC. When price will be back, will be back at that level, then what I'm going to do is getting another flow tool like, for example, footprint chart, which we will be talking about in the next webinars, and actually check if volume are trading exactly as I thought, so showing weakness of buyers and strength of sellers for short trade, and of course, the opposite for long trade. In that case, I'm using the market structure in order to get the direction of what my trade is supposed to be. The entry point, the entry, the entry area, let's say the entry area, and the perfect timing to execute the trade. Of course, volume profile still helps me with this kind of analysis to get what my target profit is more likely to be. Let's have a look at this together. Let's assume this price area here really will be balanced, as I'm expecting it to be. So, at the end of the day, I will maybe have distribution area that means a high volume area like this, which will be balanced by the price moving up and down around it. But if I take this short trade where I'm supposed to take profit and not try to push my trade further, of course, using the volume profile principles I was talking about last time. Where do we have the most important low volume area in front of me if I'm going short? I would say, maybe here, I have one here, and I have another one here. My perfect target, let's say, will be given by the high volume notes immediately before the most prominent low volume area, which could represent a rejection for price, so it can reject price against me. That, of course, gives me the clue of what the distribution area is about to become. I know there are many variables about volume profile analysis, there are many new ones, there are many details to be looking at, and of course it is very hard to explain them all in just an half an hour. That's why if you, in case you have some questions, just email me and we'll be glad to reply to you. Let me just know if you have some questions right now, apparently no. I hope that wasn't too difficult, that's why there are no questions. Anyway, let me just remind you my contacts again. So if you want to request free demo of the Volsys platform, you can email info at volumetricartrading.com, and if you are already a TickMeal customer, you can get the offer at the link I've just put in the chat. Okay. So, thanks for your participation and see you at the next webinar next week. Have a good evening and good trading.