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Using POC as Profit Target in Market Profile Trading

• By MarketProfileHQ Team
Using POC as Profit Target in Market Profile Trading

Using Point of Control (POC) as a profit target is a powerful Market Profile technique. POC represents fair value and often acts as a price magnet, making it an excellent target for taking profits on Indian exchanges.

Why Use POC as Profit Target?

POC as Fair Value

POC Characteristics:

  • Fair value: POC represents fair value
  • Price magnet: Price tends to return to POC
  • High volume: Highest volume level
  • Strong level: Strong support/resistance
  • High probability: High-probability target

Trading Benefits

Using POC as Target:

  • Logical target: Logical profit target
  • High probability: High probability of reaching
  • Fair value: Targets fair value
  • Price magnet: Price drawn to POC
  • Better exits: Better exit timing

When to Use POC as Target

Price Below POC

Bullish Setup:

  • Price below POC: Price trading below POC
  • Target POC: Target POC above
  • Price magnet: Price drawn upward
  • High probability: High probability target

Trading:

  • Enter long below POC
  • Target POC
  • High probability
  • Logical target

Price Above POC

Bearish Setup:

  • Price above POC: Price trading above POC
  • Target POC: Target POC below
  • Price magnet: Price drawn downward
  • High probability: High probability target

Trading:

  • Enter short above POC
  • Target POC
  • High probability
  • Logical target

Trading Strategies with POC Targets

Strategy 1: Value Area to POC

Setup:

  1. Price at Value Area boundary
  2. POC in opposite direction
  3. Enter trade
  4. Target POC

Entry:

  • Enter at Value Area boundary
  • Confirm with structure
  • Use tight stops
  • Target POC

Exit:

  • At POC (primary target)
  • When price reaches POC
  • Partial profit at POC
  • Trail stop after POC

Strategy 2: Single Print to POC

Setup:

  1. Price in single print area
  2. POC as target
  3. Enter trade
  4. Target POC

Entry:

  • Enter in single print area
  • Confirm with structure
  • Use tight stops
  • Target POC

Exit:

  • At POC
  • When price reaches POC
  • Take profit at POC
  • Trail stop after POC

Strategy 3: Breakout to POC

Setup:

  1. Price breaks structure
  2. POC as target
  3. Enter on breakout
  4. Target POC

Entry:

  • Enter on breakout
  • Confirm with volume
  • Use tight stops
  • Target POC

Exit:

  • At POC
  • When price reaches POC
  • Take profit at POC
  • Trail stop after POC

POC Target Variations

Current Day POC

Current Day POC Target:

  • Today’s POC: POC from current session
  • Fair value: Current fair value
  • High probability: High probability target
  • Session reference: Session reference level

Use when:

  • Trading current session
  • Targeting current fair value
  • Day trading
  • Short-term targets

Previous Day POC

Previous Day POC Target:

  • Yesterday’s POC: POC from previous session
  • Reference level: Key reference level
  • High probability: High probability target
  • Major level: Major support/resistance

Use when:

  • Targeting previous day reference
  • Swing trading
  • Longer-term targets
  • Major level trading

Weekly/Monthly POC

Weekly/Monthly POC Target:

  • Longer-term POC: POC from longer period
  • Major level: Very significant level
  • High probability: Very high probability
  • Institutional level: Institutional reference

Use when:

  • Position trading
  • Targeting major levels
  • Longer-term holds
  • Institutional levels

Profit Management with POC

Partial Profit Taking

Strategy:

  • 50% at POC: Take 50% profit at POC
  • 50% trail: Trail remaining 50%
  • Risk-free trade: Make trade risk-free
  • Extended targets: Target extensions

Benefits:

  • Lock in profits
  • Reduce risk
  • Allow for extensions
  • Better risk/reward

Full Profit Taking

Strategy:

  • 100% at POC: Take full profit at POC
  • Complete exit: Exit entire position
  • Secure profits: Secure all profits
  • No trailing: No trailing stop needed

Benefits:

  • Secure all profits
  • No risk after exit
  • Simple approach
  • Consistent results

Trailing After POC

Strategy:

  • Reach POC: Price reaches POC
  • Trail stop: Trail stop to POC
  • Target extension: Target extension
  • Risk-free: Trade becomes risk-free

Benefits:

  • Lock in profits
  • Allow for extensions
  • Risk-free trade
  • Better risk/reward

Common Mistakes

1. Not Using POC as Target

Problem:

  • Missing logical targets
  • Poor exit timing
  • Leaving money on table
  • Lower profitability

Solution:

  • Always identify POC
  • Use as profit target
  • Better exit timing
  • Improve profitability

2. Taking Profit Too Early

Problem:

  • Exiting before POC
  • Missing target
  • Lower profits
  • Premature exits

Solution:

  • Wait for POC
  • Let target reach
  • Better profits
  • Patience

3. Not Adapting to POC Location

Problem:

  • Same target regardless of POC
  • Not adapting
  • Poor targets
  • Lower probability

Solution:

  • Check POC location
  • Adapt targets
  • Use appropriate POC
  • Higher probability

Real-World Examples

Example 1: Value Area to POC

Setup:

  • Value Area: 19,200 - 19,300
  • POC: 19,250
  • Price: 19,200 (at lower boundary)

Trade:

  • Enter long at 19,200
  • Stop: Below 19,200
  • Target: POC at 19,250
  • Result: Price reaches POC, target hit

Example 2: Previous Day POC Target

Setup:

  • Previous day POC: 19,300
  • Current price: 19,250
  • Price moving up

Trade:

  • Enter long at 19,250
  • Stop: Below 19,250
  • Target: Previous day POC at 19,300
  • Result: Price reaches POC, target hit

Advanced Techniques

Multiple POC Targets

Using Multiple POCs:

  • First target: Current day POC
  • Second target: Previous day POC
  • Third target: Weekly POC
  • Scaled exits: Scale out at each POC

POC and Value Area Combination

Combining Targets:

  • Primary target: POC
  • Secondary target: Value Area boundary
  • Flexible exits: Flexible exit strategy
  • Better management: Better trade management

Tools for POC Target Trading

Professional POC target trading requires:

  • POC identification
  • Real-time POC tracking
  • Multi-day POC analysis
  • Target management tools

Vtrender provides professional Market Profile tools with POC tracking for setting profit targets on Indian exchanges.

Best Practices

  1. Always identify POC: Always identify POC levels
  2. Use as target: Use POC as profit target
  3. Adapt to context: Adapt to market context
  4. Manage profits: Use proper profit management
  5. Be patient: Wait for target to reach

Conclusion

Using POC as a profit target is a powerful Market Profile technique that takes advantage of POC’s role as fair value and price magnet. By identifying POC levels and using them as profit targets, you can improve your trade management and profitability on Indian exchanges.

Start using POC as profit targets with Vtrender’s professional Market Profile tools and improve your trading on NSE and BSE.

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