Most traders enter mid-move and get stopped out. This trader waits for price to drop sharply below the fair value area, then snap back inside. That rejection of the low is where he enters, with his stop at the bottom of the move.
Most traders try to get in the middle of a move, and that's exactly where the market chops, stalls, and eventually stops you out. The real trade happens at the boundary. The market spends most of its time in a range where the majority of volume traded. That is what we call fair value, and you see this through the volume profile. Draw it over the session and it shows you exactly where that range sits. Fair value is crowded. There are way too many traders already positioned in there. Too much noise, not enough edge. The edge lives outside of that range. I wait for price to push below the value area and close back inside quickly. The speed matters. A slow grind out tells you nothing, but a sharp move out and a fast close back in tells you that sellers got rejected and now every one of them is trapped. That close back inside is my entry. Stop loss at the low. If you want to learn more about volume profiles, I have a free course and a community. Comment join and I'll send you the link.
