TradersLibrary2 - anatomy of a volume profile trader

fluctuating near breakeven and stagnating. This means the momentum has been
sucked out of the trade and new participation is required for it to move. If no
new players come into the market then the existing ones will begin to liquidate.
My best trades are those that generally work out right away. This is not enough
however, I must allow those positive trades time and space to trend. This leaves
little volume footprints behind on the profile. Once the momentum dries up the
bars will begin to overlap and the profile begins to build. If the market starts
ranging wide and whippy I'll close the position and get out. If it consolidates in a
tight range I’ll stay in and bring stops in to lock some profit. If the market still
goes nowhere I’ll really tighten the stops up, or if I notice a few of my other
positions are also stagnatic I’ll flatten everything and wait until a new setup is
created. This is important, once you exit a trade you must wait for a new setup to
be created. This takes time, depending on your time frame; for intraday traders
this could be a few hours, for daily chart traders this could be a week or more.
For instance I have not been able to enter into a Crude Oil trade for the past
month because I have not received any signals which matched my trading
strategies based on volume profile development. The market has moved around a
bit but I will stay out of the market because I will only trade the patterns which
are inline with my trading plan and strategy. Do this and you will be rewarded
with trades that work to your advantage more often than not as they did in the
backtesting. Yes you’ll sit idle while the market fluctuates but you’ll be safe
while others take unnecessary losses.