Sunday afternoon, mid-December. Your team needs 3 yards for a first down to keep the drive alive. Your heart is in your throat and despite having the league’s leading rusher — they’re in the shotgun… again.
Knowing when to run and when to pass seems like an easy decision from the confines of your living room — especially on Monday morning. On the field it can be much more difficult.
No more so the case than when sizing up an entry as price is bouncing along. Thanks to Volume at Price, you have a view of value that signals when you should be drawing up a run play, or looking down field. Something that millions of armchair traders never see or know.
A dynamic view of price’s line of scrimmage
Some say that the role of the rusher is dying. If the 2015 season is any indication, the Buffalo Bills rushed 52% of the time with 509 attempts. The Lions rushed the least, only 35% of the time with 354 attempts. They finished 7-9 and then the owner cleaned house.
Like any decent offense, your trading strategy needs to be balanced. For those interested in building a ‘rushing game’ of steady trading yardage, picking up scalps using Volume at Price is an excellent strategy.
Volume at Price tells you the volume taking place at each price level — with the most volume, POC (Point of Control), right in the middle. Consider it the line of scrimmage where all the action is taking place and openings are created to grab an entry, if you know what to look for.
Size up the defensive line of value for openings
Rex Ryan, the bombastic coach of the Bulls, believes in ‘smashmouth’ football. A ground-and-pound approach designed to wear your opponent down. Three, five yards at a time that frees the quarterback to find a pass.
When using Volume at Price, you can establish a run game that yields three to five ticks a play thanks to the dynamic view of value that’s presented. By tracking the volume activity taking place at each price level, Volume at Price gives you a dynamic view of the market’s value zone.
Using the example below, you can quickly see where the most volume is going off with POC (Point of Control). It’s flanked by a real-time view of Value Area High (VAH) and Value Area Low (VAL).
It’s the exact view of the market you need, right before taking a snap to quarterback an entry.
Spotting profitable play with Volume at Price
The great rushers of all time had a nose for openings and moves that made defenses seem like their shoes were filled with cement. Despite the speed of the game, they have the patience to let the blocks in front of them develop so they can pick their spots.
The same is true when using Volume at Price. Let price advance to VAH or VAL before making your move. With the benefit of Order Flow Sequence Tracking, you’ll know exactly what positions the institutions are taking — which allows you to spot an opening.
When price starts to test the edges of the value zone, Volume at Price will tell you the volume/interest level sitting directly outside the zone. It’s like knowing whether the secondary is coming in to support the line and contain the run.
You can spot this quickly in the example below. Notice how volume drops off noticeably right outside of Value Area High. This, in conjunction with a long-term volume rejection level, tells you that price will likely back away from that particular level.
The perfect opportunity to park an entry and plan a run.
Set up your passing plays with a series of profitable runs
The passing game is considered by most to be more exciting to watch — with better potential for scoring yards. Millions of retail traders make the same argument, often leaning on indicators to call the plays for them.
Because the indicators don’t show the short- or long-term volume that precedes any price level — they’re often late. Forget running or passing, you can’t score if your indicator is flat-out wrong most of the time.
By establishing a run game, you will have a foundation of entry criteria that positions you for higher probability swing/passing trades that target more ticks/yards.
Score consistently with runs using Volume at Price
If you’re a Seahawks fan, Pete Carroll’s decision to pass at the end of the 2014-15 Super Bowl was especially agonizing. With Marshawn Lynch ready to go into ‘beast mode’ and win the game — a pass play was called. The results were devastating.
Regardless of your chosen market, Volume at Price will help confirm your choice to run for short-term ticks. Watch as price approaches a VRL (Volume Rejection Level). The moment it exits VAH or VAL, you have an opportunity to get in, especially if there’s a noticeable drop in volume beyond the Value Zone.
When price returns to the Value Zone — run for 3-5 ticks, exiting likely right around the POC. Don’t pass unless you’ve picked an exit or have an open field in the form of imbalances on your side.
Run the ball to profits and glory three to five ticks at a time while others second guess and lose!
Noft Traders offers a Funded Trader Program. To learn more, visit their informational page at NOFT-Traders.com.