All language subtitles for cammycapital-Volume Profile Trading Course-12-VAH--VAL Breakaway-eng

A value high value low breakaway is when

the market accepts price above a value

high or below a value low and continues to

move away from value causing that value

area high or value area low to act as

either support or resistance. So this is

typically used when we expect price to

continue in the direction of a trend or

for a new trend to begin. So unlike a fade

you're trading in the direction of the

breakout and using that value area high or

low as support or resistance instead of

trying to fade from that area. And the

goal here is to capture a shift from what

was previously a balanced market within

value into imbalance and price discovery

where the market will move to establish a

new value area. So in these conditions a

broken value area high or value area low

will become support or resistance. So if

breaking to the upside a value high will

become support. If breaking to the

downside a value low will become

resistance. So if we look on the right

here we have an example of where price had

broken away from the point of control

above value area highs. Here we have our

overnight open at 6pm and you can see that

as price came back down to test the value

area high again and retest the value area

of the market. You can see that the buyers

bought that back up each time we have

price bouncing bouncing. It tests it tries

to probe back into value but because there

is a more bullish sentiment in the market

buyers continue to step in. And buy at

value highs keeping and holding price

above the value area high. And then here

is our opposite example where we have

bearish conditions. The market broke

through the value area low to the downside

completely cutting through. And you can

see here is our overnight open 6pm. So now

in the overnight session when price

attempted to come back into the value area

low. It was a perfect point of resistance.

Sellers immediately rejected a move back

into the value area pushing price to the

downside. As that new price discovery

happened and the market moved into an

imbalanced state finding value at lower

pricing. So why does this work? Again

auction market theory. If price moves

outside of the value area high or low that

means the market is testing for new value.

And if that test attracts fresh buyers

above value highs or attracts fresh

sellers below the value lows. The auction

will migrate to a higher or lower value

zone causing price to go into price

discovery mode aka imbalance. Then there

is the order flow. Breakaways are driven

by initiative activity which is aggressive

market participants that are executing

orders in reaction to market movement. Not

just short term scalpers or passive

liquidity. This aggressive order flow

sustains movement away from old value and

moves price to seek new value at either

higher or lower prices. The next thing is

low volume area acceleration. So outside

of value area highs and lows. Outside

value area highs and lows are often low

volume nodes. And low volume nodes if you

remember from the introductory lessons.

Low volume nodes are where price can move

quickly due to thin liquidity. Especially

if aggressors are present to move price.

Because there is less activity at these

lower or higher prices outside of the

value area. Price can move a lot quicker

than it would be moving in the thicker

value areas closer to fair value. So

little opposition means easier

continuation and quick breakout potential.

The last reason is failed fades fuel these

breakouts. So traders that don't

anticipate a trend or a breakaway from the

value area highs and lows are instead

fading the value area highs and lows like

we showed in the previous setup. If these

traders are wrong about fading the value

highs and value lows they get stopped out

which creates additional order flow

supporting the breakout direction. So if

we are going above value area highs if

people are trying to sell at value area

highs what do you do when you close out a

sell position? You buy. So if traders are

trying to sell at value highs but price

fails to move down they have to buy back

their position in order to get out of

their short. So if there are an abundance

of buyers present at value highs as well

as failed sellers who have to buy in order

to cover their position that creates

additional fuel pushing price above value

highs and vice versa. So shorts buying

back above value highs or longs having to

sell their long positions below value

lows. So all of this creates additional

order flow and additional fuel for price

to break away from these zones when the

context is correct. So whenever the market

is not in a ranging state and we

anticipate price to break out using the

value area high and value area low as an

area to build your position on the retest

is an extremely powerful approach to

trading breakaway markets. Now these won't

occur as often as a fade from the value

highs and value lows however with the

right context and anticipating breakaways

this is the type of play you should be

looking for. So this is the second basic

setup that we use trading the volume

profile. Again we'll cover how to add more

context and confluence to these trades in

the next module but now move on to the

next lesson and we'll cover the final

basic trade setup which is using the point

of control.