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Using Market Profile to Identify True Support and Resistance on Indian Exchanges

• By MarketProfileHQ Team
Using Market Profile to Identify True Support and Resistance on Indian Exchanges

Traditional support and resistance levels are often just lines on a chart. Market Profile shows you where the real support and resistance is - where value was established and where the market found equilibrium.

Why Traditional Support/Resistance Fails

The Problem

Traditional levels are based on:

  • Price only: No volume information
  • Historical prices: Past levels
  • Arbitrary lines: No real significance
  • False signals: Often broken

The Solution

Market Profile shows:

  • Value Areas: Where 70% of volume traded
  • POC (Point of Control): Price level with highest volume
  • Volume confirmation: High volume at levels
  • True levels: Real support/resistance based on value

Finding Support with Market Profile

Lower Value Area

Support is at the lower Value Area boundary:

Signs:

  • Price at lower Value Area
  • High volume at this level
  • POC above price (value above)
  • Price bouncing from level

Trading:

  • Enter on bounce from lower VA
  • Confirm with volume
  • Use stops below lower VA

Point of Control (POC) as Support

POC acts as strong support when price is below:

Signs:

  • Price approaching POC from below
  • POC is major volume node
  • Price holding at POC
  • Volume increasing at POC

Trading:

  • Enter on bounce from POC
  • Confirm with market structure
  • Use stops below POC

Volume Profile Nodes

Support is where high volume nodes exist:

Signs:

  • High Volume Node (HVN) at level
  • Price bouncing from HVN
  • Volume confirmation
  • Structure support

Trading:

  • Enter on bounce from HVN
  • Confirm with Value Area
  • Use stops below HVN

Finding Resistance with Market Profile

Upper Value Area

Resistance is at the upper Value Area boundary:

Signs:

  • Price at upper Value Area
  • High volume at this level
  • POC below price (value below)
  • Price rejecting from level

Trading:

  • Enter on rejection from upper VA
  • Confirm with volume
  • Use stops above upper VA

Point of Control (POC) as Resistance

POC acts as strong resistance when price is above:

Signs:

  • Price approaching POC from above
  • POC is major volume node
  • Price rejecting from POC
  • Volume increasing at POC

Trading:

  • Enter on rejection from POC
  • Confirm with market structure
  • Use stops above POC

Volume Profile Nodes

Resistance is where high volume nodes exist:

Signs:

  • High Volume Node (HVN) at level
  • Price rejecting from HVN
  • Volume confirmation
  • Structure resistance

Trading:

  • Enter on rejection from HVN
  • Confirm with Value Area
  • Use stops above HVN

Market Profile Support/Resistance Strategies

1. Value Area Bounce

Trade bounces off Value Area:

Setup:

  • Price at lower or upper Value Area
  • POC in opposite direction
  • Volume confirmation
  • Structure support

Entry:

  • Enter on bounce from VA
  • Confirm with volume
  • Use tight stops outside VA

Exit:

  • At opposite Value Area
  • At POC
  • When structure changes

2. POC Reversal

Trade reversals at POC:

Setup:

  • Price approaching POC
  • Strong volume node
  • Reversal pattern forming
  • Structure support

Entry:

  • Enter on reversal
  • Confirm with structure
  • Use stops on other side of POC

Exit:

  • At Value Area
  • When momentum fades
  • At predetermined target

3. Value Area Breakout

Trade breakouts from Value Area:

Setup:

  • Price consolidating in VA
  • Building pressure
  • Breakout direction clear
  • Volume confirmation

Entry:

  • Enter on breakout
  • Confirm with volume
  • Use stops back inside VA

Exit:

  • At target levels
  • When momentum fades
  • At stop loss

Combining Multiple Levels

The Power of Confluence

Combine multiple Market Profile levels:

  • Value Area + POC: High-probability levels
  • POC + Volume Nodes: Strong support/resistance
  • Value Area + Structure: Complete picture
  • All together: Highest probability setups

Example Setup

Multiple Levels Aligned:

  • Upper Value Area at 18,500
  • POC at 18,480
  • High Volume Node at 18,495
  • All creating strong resistance

Trading:

  • High-probability short setup
  • Multiple levels confirm
  • Strong resistance zone
  • Clear stop placement

Common Mistakes

1. Ignoring Market Profile

Using only price levels:

  • Problem: Missing value context
  • Solution: Always check Value Area and POC

2. Not Using Value Area

Placing trades without VA context:

  • Problem: Trading blind
  • Solution: Know where value is

3. Ignoring Structure

Not considering market structure:

  • Problem: Missing context
  • Solution: Always analyze structure

Best Practices

1. Always Identify Value Area

Know where value is:

  • Check daily Value Area
  • Identify POC
  • Understand structure
  • Plan trades accordingly

2. Use Multiple Timeframes

Confirm with higher timeframes:

  • Daily Value Area
  • Weekly POC
  • Monthly structure
  • All confirm together

3. Wait for Confirmation

Don’t trade too early:

  • Wait for bounce/rejection
  • Confirm with volume
  • Check structure
  • Enter with confidence

Tools for Market Profile Support/Resistance

Professional Market Profile analysis requires:

  • Real-time Value Area and POC for Indian markets
  • Volume Profile analysis
  • TPO chart visualization
  • Historical data for NSE/BSE

Vtrender provides comprehensive Market Profile tools for identifying true support and resistance levels on Indian exchanges.

Conclusion

Market Profile reveals the true support and resistance levels where value was established. By learning to identify Value Area, POC, and volume nodes, you can improve your entries, exits, and overall trading results on NSE and BSE.

Start using Vtrender’s professional tools to identify true support and resistance levels with Market Profile analysis for Indian markets.

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