A three-step short-selling strategy using volume profile and value-area analysis. Watch for price to push above the value-area high on declining volume, then close back inside on rising volume. Place your stop just above the breach high and target the value-area low.
I used to think you needed conspiracy theories to understand why price moves. Then a world trading champion showed me the truth in under a minute. It was so simple, it was almost embarrassing. Step 1: Draw the volume profile over the session and find the value area. If value is building lower session after session, sellers are in control and the trend is bearish. Step 2: Wait for price to push above the value area high. Watch the volume bars. If volume is declining on that move up and you see absorption, Sellers are stepping back in, forming a wall buyers cannot push through. The money isn't following price higher. Step 3: When price closes back inside the value area and the volume picks up, it means the party is going to still be inside of the range. That is your short. Stop goes above the high. Target is the value area low.
