Supply and Demand POIs
- Use S&D POIs that create imbalance and violate an opposing Supply or Demand. Supply and Demand that have inducement prior to price reaching the S&D zone have a higher probability.
- Supply or Demand that doesn't have resting liquidity on the other side that would cause it to be violated.
Imbalance POIs
- Use unfulfilled Imbalance that doesn't have resting liquidity on the other side that would cause the imbalance to be violated, such as the Imbalance within or immediately after an FU (institutional) candle is printed.
- Use Imbalance that does a solid break of an opposing POI, the overlap of the violated POI and Imbalance is now a POI (example: Breaker blocks or Mitigation blocks).
- Imbalance that violates a sharp 'V' reversal level.
- All imbalances are not equal, some may appear as imbalance on a higher timeframe but show efficient price action on a lower timeframe.
POIs in General
- There is no guarantee which one price will react from. If presented with multiple POIs that make sense, wait for confirmation at the POI and let price tell you which is the right one. An FU (institutional) candle printing at the POI is a good indication that the POI is correct.
- Look left, price needs to have a reason to react at a level, if there is no reason, you should ignore the POI.
- The VPFR tool can also assist in filtering out unreliable POIs by volume.
- When in doubt, the safest action is to wait for confirmation at the POI, you will miss some trades, but you will also miss some losses.