Many books have been written on the subject of market profile and volume profile. As I have always stated, I do not use the textbook theories when I use VP.

Instead, I perform my own statistical research and observations of historical patterns to gain an edge.

On today’s post, I’m going to show how I trade the P-shape profile pattern

Typically I’m bullish on these days and I look for extensions up to the TD (trend day) fibs of balance.

Unlike a lot of other profile structures, I tend to look for entries at LVN’s and LVA’s (low volume nodes, low volume areas) on P shape profiles.

You can see from the image above there are 2 LVN’s of interest, when price rotates to these zones I look for clear rejection. Once balance has formed first 1hr and 15 minutes of trade (0700-0815 London), I project the balance levels for the NV and TD.

Taking partial profit at the NV or at least securing profit at the NV is recommended, however the main objective is for price to rotate to the TD.

Lets take a look at another example…

In this example we can see that price rotated down to an LVA (low volume area) which was rejected for a move up to the TD.

You should be fairly comfortable placing a stop under the LVN or LVA once a clear rejection has taken place. Very often this profile structures and trade locations provide great risk reward situations.