A trader explains how to validate entry signals using volume profiles and value areas. Watch for declining volume when price dips below the value area, then enter when price re-enters with spiking volume. Place your stop below the dip low and target the value-area high.
Fair value gaps, order blocks, liquidity sweeps. You already know the concepts. What nobody showed you is how to confirm them with data before you enter. Step 1: Draw the volume profile of the session and find the value area. If value is building higher session after session, it means buyers are in control and the trend is bullish. Step 2: Wait for price to dip below the value area. Watch the volume bars. If volume is declining on that move down and you see absorption, Buyers stepping in and forming a wall that sellers cannot push through. The money is not following the price lower. Step 3: As soon as price closes back inside the value area and volume picks up, the auction failed. The party is still in the range. That is your long. Stop goes below the low. Target is the value area high and potentially beyond.
