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What is POC (Point of Control) in Order Flow Trading?

• By OrderflowHQ Team
What is POC (Point of Control) in Order Flow Trading?

The Point of Control (POC) is one of the most important concepts in order flow trading. It represents the price level where the most volume traded during a specific period, making it a critical reference point for traders.

What is the Point of Control (POC)?

The POC is the single price level with the highest volume in a given timeframe. It’s derived from volume profile analysis and represents the price where the most trading activity occurred.

Key Characteristics

  • Highest volume price: More contracts/shares traded here than any other level
  • Value reference: Represents the “fair value” price for that period
  • Magnet effect: Price tends to return to POC
  • Support/Resistance: Often acts as a key level

How POC is Calculated

The POC is determined by:

  1. Volume Profile Analysis: Counting volume at each price level
  2. Time Period: Can be intraday, daily, weekly, or custom
  3. Highest Volume: The price with the most total volume becomes the POC

Example

Price Level | Volume
------------|--------
4200        | 1,500
4201        | 2,300
4202        | 3,800  ← POC (highest volume)
4203        | 2,100
4204        | 1,200

In this example, 4202 is the POC because it has the highest volume (3,800 contracts).

Why POC Matters

1. Fair Value Indicator

The POC represents where the market found equilibrium - where buyers and sellers agreed on price most frequently. This makes it a natural reference point for value.

2. Support and Resistance

POC levels often act as:

  • Support: When price is above POC
  • Resistance: When price is below POC
  • Breakout level: Breaking through POC is significant

3. Price Magnet

Price has a tendency to return to POC because:

  • It represents fair value
  • Traders use it as a reference
  • Institutions may defend these levels

Using POC in Trading

1. Identifying Key Levels

Mark POC levels on your charts:

  • Daily POC: Most important for day trading
  • Weekly POC: Important for swing trading
  • Monthly POC: Important for position trading

2. Entry Signals

Look for trades when price approaches POC:

Bullish Setup:

  • Price pulls back to POC
  • Order flow shows buying pressure
  • Support holds at POC
  • Enter long on confirmation

Bearish Setup:

  • Price rallies to POC
  • Order flow shows selling pressure
  • Resistance holds at POC
  • Enter short on confirmation

3. Exit Signals

Use POC for profit targets:

  • Long trades: Take profits at POC above
  • Short trades: Take profits at POC below
  • Reversal trades: Exit when price reaches opposite POC

POC vs Other Volume Profile Levels

POC vs Value Area High (VAH)

  • POC: Single price with highest volume
  • VAH: Upper boundary of value area (70% of volume)

POC vs Value Area Low (VAL)

  • POC: Single price with highest volume
  • VAL: Lower boundary of value area (70% of volume)

POC vs Volume Weighted Average Price (VWAP)

  • POC: Static price level (highest volume)
  • VWAP: Dynamic average price (changes throughout day)

Advanced POC Strategies

1. POC Breakout Strategy

When price breaks through POC:

  • Bullish breakout: Price breaks above POC with volume
  • Bearish breakdown: Price breaks below POC with volume
  • Confirmation: Order flow confirms the move

2. POC Rejection Strategy

When price rejects POC:

  • Bullish rejection: Price bounces off POC from below
  • Bearish rejection: Price bounces off POC from above
  • Strong signal: Especially with order flow confirmation

3. POC Shift Strategy

When POC moves to a new level:

  • Bullish shift: POC moves higher (buying pressure)
  • Bearish shift: POC moves lower (selling pressure)
  • Trend change: Significant shift indicates trend change

Combining POC with Order Flow

With Delta

  • Positive delta at POC: Buying pressure
  • Negative delta at POC: Selling pressure
  • Delta divergence: Potential reversal

With Absorption

  • Absorption at POC: Strong support/resistance
  • Large volume, no move: Institutional activity
  • Breakthrough: Significant when POC breaks

With Imbalance

  • Imbalance at POC: One-sided auction
  • Stacked imbalances: Strong directional move
  • Reversal: When imbalance exhausts at POC

Common POC Patterns

1. POC Test and Hold

Price tests POC and holds:

  • Support/Resistance: POC acts as key level
  • Bounce: Price reverses from POC
  • High probability: Strong pattern

2. POC Break and Retest

Price breaks POC then retests:

  • Breakout: Initial move through POC
  • Retest: Price returns to test POC
  • Confirmation: Retest holds, move continues

3. POC Gap

Price gaps away from POC:

  • Gap up: Price opens above POC
  • Gap down: Price opens below POC
  • Fade: Often returns to POC

Best Practices

1. Use Multiple Timeframes

  • Higher timeframe POC: Major support/resistance
  • Lower timeframe POC: Entry/exit levels
  • Align: When POCs align, stronger level

2. Combine with Context

Consider:

  • Overall trend
  • Time of day
  • Market conditions
  • News events

3. Don’t Trade POC Alone

Always combine with:

  • Order flow signals
  • Price action
  • Other technical analysis
  • Risk management

Tools for POC Analysis

Professional POC analysis requires:

  • Volume profile tools
  • Real-time data
  • Historical analysis
  • Customizable displays

Vtrender provides advanced volume profile and POC tools for professional order flow analysis.

Common Mistakes

1. Trading Every POC Touch

Not every POC touch is a trade. Wait for:

  • Order flow confirmation
  • Clear price action
  • Proper risk/reward

2. Ignoring POC Shifts

POC can move. Always check:

  • Current POC location
  • Recent shifts
  • Multiple timeframe POCs

3. Not Using Stops

POC isn’t guaranteed support/resistance. Always use:

  • Stop losses
  • Position sizing
  • Risk management

Conclusion

The Point of Control (POC) is a powerful tool in order flow trading. By identifying where the most volume traded, you can find key support and resistance levels and make more informed trading decisions.

Start using Vtrender’s volume profile tools to identify POC levels and improve your order flow trading.

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