Using the Market Profile Point of Control with TAS Boxes
We have gone over how to use TAS Boxes to spot entries, and exits in the market. Now we are going to focus on using the Market Profile Point of Control to measure the strength of a Box. With each Box, the height and wdth will vary. On top of this, the POC (point of control) line will be closer or farther from the HVA and LVA lines. We use the POC line to identify where a majority of trading happened in the previous period. It will indicate the strongest action, within the box, between buyers and sellers.
We can use this information to further back up our initial entries, or future entries into the market. We use the POC line as a area where the market will gravitate towards as institutional buyers will be more inclined to consider it fair value.
Each TAS Box is different:
When we use the Market Profile Point of Control line, we have to keep in mind a few key factors.
The height of the Box:
The height indicates the volatility in the market. This volatility, with a point of control line in the middle of the box, can indicate a volatile market. With a very high/tall Box, and a Market Profile Point of Control line in the middle, the action is spread out through a wide area. This can make that market difficult to trade. At the same time, a high/tall box with a POC line near one of the key value areas will indicate the market has a strong level of support and resistance.
The Width of the TAS Market Profile Box:
As the width increases with every candle, so does the level of resistance and support. Furthermore when the market keeps bouncing off of these key price levels, they become more re enforced over time. When we get a combination of the last two scenarios, a POC line near a value area, and a wide box, this can set a strong level of support and resistance.
If you want to find out more about TAS boxes, check out the article below:
Bruce Banks