Use VA breakout strategy to grasp the market truth behind trading volume

In the world of trading, many novices tend to only focus on the price curve, but ignore the key that can truly reveal market trends – trading volume. Price tells you what is happening in the market, while volume tells you how much force is behind the market driving the price. By looking at prices alone, it is easy to be misled by short-term fluctuations; but combined with trading volume, you can truly judge the strength of the trend, the layout of the institution, and the possibility of potential reversal.

Why trading volume is more important than price

Many traders pay attention to price changes but ignore the prompts of trading volume. Price movements may be driven by a small number of trades, or simply short-term sentiment swings, while volume can reveal market participation and institutional intentions behind them.

For example, when the price reaches a new high but the trading volume shrinks, it often means that the bulls are insufficient and the trend may not be sustainable; on the contrary, when the price breaks through the key position and is accompanied by a substantial increase in trading volume, it means that the institution is actively planning, which is a truly reliable breakthrough signal.

Core tools: VPOC, LVN, VAH/VAL

1. Volume Control Point (VPOC)

VPOC is the price with the largest trading volume within the selected time period, also known as the market equilibrium point. The price fluctuated repeatedly around VPOC, indicating a balance of power between buyers and sellers.

Above VPOC: Buyers are more active, bulls dominate

Below VPOC: Sellers dominate, bears dominate

Application tip: Observe the movement of VPOC. If VPOC continues to move up, it means that institutions are gradually opening long positions, and the price has the potential to continue to rise; if VPOC
If it moves down, the bears may be making a move.

Practical Tip: Marking daily VPOC in the EagleTrader demo account can help you identify trend continuation and potential reversal positions, and train your sensitivity to changes in the market’s center of gravity.

2. Low Volume Node (LVN)

LVN refers to a price area with very little trading volume. This is usually a place where the market is inefficient, and it may also be a high-probability area for rapid breakthrough or pullback.

Application skills:

When the price is close to the LVN area and a falling shadow line appears, it may be a strong reaction of the institution to the price

The entry point can be observed in conjunction with the K-line pattern to improve trading accuracy

Practical Tips: LVNAreas are often used as breakout entries or stop loss references. Practicing on a demo account can help you understand potential opportunities in “thin volume areas” of the market.

3. Value area (VAH & VAL)

The value area shows the price range of approximately 70% of the trading volume in a certain period of time, which is the “comfort zone” of the market.

VAH (high point): Breaking through VAH and accompanied by increased trading volume indicates that bulls are dominant, and VAH can be used as a support area; failure to break through may lead to a pullback to VPOC or VAL

VAL (low point): If it falls below VAL, sellers will take the lead, and if it rebounds, buying will reignite

Comprehensive application: VAH, VAL and VPOC together can determine whether the market is range-bound or trending. Traders can use these levels to identify high-probability entry areas and breakout directions.

How to judge the market structure

In actual trading, it is crucial to clarify the market structure: a bull market, a bear market, or a volatile market. Different strategies correspond to different operating methods.

Bull market: The opening is higher than the previous day’s VAH, bulls are dominant, VAH can be used as support, and the probability of trend continuation is high

Bear market: The opening is lower than the previous day’s VAL, shorts are dominant, and VAL can be used as resistance

Shock market: The opening is within the previous day’s VA, the market is hesitant, and it is necessary to focus on VAH/VAL’s breakthrough test VA breakthrough strategy practical skills

1. Monitor the previous day VAH/VAL: When the opening price is within VA, wait patiently for confirmation of a breakthrough

2. Price breakthrough confirmation:

The closing price is higher than VAH: bulls dominate and the upward trend continues

The closing price is lower than VAL: Short positions dominate, and the downward trend continues 3. Callback entry: Look for opportunities for the price to pull back to the breakthrough level to increase the entry success rate

4. Stop loss setting: It can be placed outside the breakthrough range or below the fair value gap (FVG) when the trend is strong

5. Position management: After the breakthrough is confirmed, open positions in batches to avoid investing all at once

Practical tips: When practicing the breakthrough strategy in EagleTrader, you can mark VPOC and LVN at the same time and
VAH/VAL, distinguished by different colors, trains the ability to quickly identify trading opportunities.

Volume trading is not just about looking at numbers. It allows you to clearly see market sentiment and institutional layout. It is an important tool for traders to judge trends and enter the market with high probability. Combining VPOC, LVN and VA
With analysis, you can identify breakout points, confirm trend direction, and optimize entry and stop-loss strategies.

At
In the EagleTrader demo account and proprietary trading exam, traders can practice these strategies in a real volatile environment.Strategy, no capital risk, while exercising execution and risk control capabilities. Through repeated practice, volume trading not only helps you make more rational decisions, but also allows you to gradually establish a stable trading system in the market.