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How to Use Previous Day POC for Trading

• By MarketProfileHQ Team
How to Use Previous Day POC for Trading

The previous day’s Point of Control (POC) is one of the most important reference levels in Market Profile trading. It acts as a magnet for price and provides high-probability trading opportunities on Indian exchanges.

What is Previous Day POC?

The previous day’s POC is the price level with the highest volume from the previous trading session. It represents where the market found fair value yesterday and often acts as a key reference point for today’s trading.

Why Previous Day POC Matters

Previous Day POC is Important Because:

  • Fair value reference: Where market found fair value yesterday
  • Price magnet: Price tends to return to POC
  • Support/resistance: Acts as strong support/resistance
  • Institutional reference: Institutions use it as reference
  • High probability: High-probability trading level

How Previous Day POC Works

Price Magnet Effect

Price Behavior:

  • Price returns to POC: Price often returns to previous day POC
  • POC as support/resistance: POC acts as support/resistance
  • POC bounces: Price bounces from POC
  • POC breaks: Breaking POC is significant

Trading Implications

Previous Day POC Provides:

  • Entry points: Enter trades near POC
  • Exit points: Exit trades at POC
  • Support/resistance: Use as support/resistance
  • Target levels: Use as profit targets

Trading Strategies with Previous Day POC

Strategy 1: POC Bounce

Setup:

  1. Identify previous day POC
  2. Wait for price to approach POC
  3. Enter on bounce
  4. Target Value Area

Entry:

  • Enter when price bounces from POC
  • Confirm with structure
  • Use tight stops
  • Target Value Area or extension

Exit:

  • At Value Area
  • When momentum fades
  • At stop loss
  • On reversal

Strategy 2: POC Breakout

Setup:

  1. Identify previous day POC
  2. Wait for price to approach POC
  3. Enter on break
  4. Target extension

Entry:

  • Enter when price breaks POC
  • Confirm with volume
  • Use tight stops
  • Target extension

Exit:

  • At extension target
  • When structure breaks
  • At stop loss
  • On reversal

Strategy 3: POC Reversion

Setup:

  1. Price away from previous day POC
  2. Wait for price to return
  3. Enter on return
  4. Target POC

Entry:

  • Enter when price returns to POC
  • Confirm with structure
  • Use tight stops
  • Target POC

Exit:

  • At POC
  • When momentum fades
  • At stop loss
  • On continuation

Previous Day POC as Support

When POC Acts as Support

Conditions:

  • Price above previous day POC
  • Price approaching POC from above
  • POC below current Value Area
  • Bullish market structure

Trading:

  • Enter long on bounce from POC
  • Stop below POC
  • Target Value Area or extension
  • High probability setup

Example: POC Support

Setup:

  • Previous day POC: 19,250
  • Current price: 19,270
  • Price approaching 19,250

Trade:

  • Enter long on bounce from 19,250
  • Stop: Below 19,250
  • Target: Value Area or extension
  • Result: Price bounces, target hit

Previous Day POC as Resistance

When POC Acts as Resistance

Conditions:

  • Price below previous day POC
  • Price approaching POC from below
  • POC above current Value Area
  • Bearish market structure

Trading:

  • Enter short on rejection from POC
  • Stop above POC
  • Target Value Area or extension
  • High probability setup

Example: POC Resistance

Setup:

  • Previous day POC: 19,250
  • Current price: 19,230
  • Price approaching 19,250

Trade:

  • Enter short on rejection from 19,250
  • Stop: Above 19,250
  • Target: Value Area or extension
  • Result: Price rejects, target hit

Combining Previous Day POC with Current Day

Current Day Value Area + Previous Day POC

Analysis:

  • Current day Value Area
  • Previous day POC location
  • Relationship between them
  • Trading implications

Trading:

  • If POC inside Value Area: Strong level
  • If POC outside Value Area: Target level
  • If POC at Value Area boundary: Key level
  • Use for entries and exits

Current Day POC + Previous Day POC

Analysis:

  • Current day POC
  • Previous day POC
  • Relationship between them
  • Value migration

Trading:

  • If POC rising: Bullish
  • If POC falling: Bearish
  • If POC same: Balance
  • Use for trend identification

Advanced Techniques

Multiple Day POC

Using Multiple Days:

  • Previous day POC
  • Two days ago POC
  • Three days ago POC
  • Cluster of POCs

Trading:

  • Multiple POCs at same level: Very strong
  • POC cluster: Strong support/resistance
  • POC spread: Less significant
  • Use for major levels

Weekly POC

Using Weekly POC:

  • Previous week POC
  • Current week POC
  • Relationship between them
  • Longer-term reference

Trading:

  • Weekly POC: Major level
  • Daily POC: Intermediate level
  • Use both for context
  • Higher timeframe reference

Common Mistakes

1. Not Using Previous Day POC

Problem:

  • Ignoring previous day POC
  • Missing key levels
  • Poor entries/exits
  • Lower probability trades

Solution:

  • Always identify previous day POC
  • Use as reference level
  • Trade with POC context
  • Improve probability

2. Trading POC Without Context

Problem:

  • Trading POC blindly
  • Not considering structure
  • Missing context
  • Poor trades

Solution:

  • Always check context
  • Consider market structure
  • Use with other tools
  • Complete analysis

3. Not Adapting to Changes

Problem:

  • Sticking to old POC
  • Not updating reference
  • Missing new levels
  • Outdated analysis

Solution:

  • Update POC daily
  • Use current reference
  • Adapt to changes
  • Stay current

Real-World Examples

Example 1: POC Bounce (Support)

Setup:

  • Previous day POC: 19,250
  • Current day opens: 19,270
  • Price drops to 19,250
  • Bounces from 19,250

Analysis:

  • POC acts as support
  • Price bounces
  • Bullish signal
  • High probability

Trade:

  • Enter long at 19,250
  • Stop: Below 19,250
  • Target: Value Area (19,300)
  • Result: Price reaches target

Example 2: POC Breakout

Setup:

  • Previous day POC: 19,250
  • Current day: Price consolidating below 19,250
  • Price breaks above 19,250
  • Volume increasing

Analysis:

  • POC broken
  • Bullish breakout
  • Strong signal
  • High probability

Trade:

  • Enter long on break above 19,250
  • Stop: Below 19,250
  • Target: Extension above
  • Result: Price reaches target

Tools for Previous Day POC Trading

Professional previous day POC trading requires:

  • Previous day POC identification
  • Real-time POC tracking
  • Historical POC analysis
  • Multi-day POC comparison

Vtrender provides professional Market Profile tools with previous day POC tracking for Indian exchanges.

Best Practices

  1. Always identify: Always identify previous day POC
  2. Use as reference: Use as key reference level
  3. Check context: Always check market structure
  4. Combine tools: Use with other Market Profile tools
  5. Update daily: Update POC reference daily

Conclusion

The previous day’s POC is a crucial reference level in Market Profile trading. By understanding how price interacts with previous day POC and using it for entries, exits, and targets, you can improve your trading results on Indian exchanges.

Start using previous day POC with Vtrender’s professional Market Profile tools and enhance your trading on NSE and BSE.

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