How to Spot Better Trades PART 2: The Chart Whisperer
(Missed Part 1? Check my previous post for the quantitative foundation)
Last day I covered the math behind better trades. Now here's how I read price action like a map to find precise entries and exits:
My Technical Edge:
Volume Profile: The Market's Memory
This isn't just support and resistance - it's where real money changed hands. I map traded volume at each price level to find the zones that matter.
Key levels to watch:
Point of Control (POC): Highest volume zone acts like a magnet
High Value Nodes (HVN): Strong support/resistance areas
Low Value Nodes (LVN): Weak zones where price moves fast
Real example: $BTC 's POC at $65K kept acting as resistance during the summer consolidation. When it finally broke above with volume, that was the signal for the run to $90K+.
Z-Score: The Overbought/Oversold Truth
Shows standard deviations from the mean over your chosen timeframe. Better than RSI because it's mathematically precise about extremes.
My setup: 30-day lookback for swing trades. When $ETH hit +2.5 Z-score at $3,200, it was mathematically overbought. Perfect spot for partial profit-taking before the pullback to $2,800.
For mean reversion plays: -2 Z-score often marks oversold bounces, while +2 signals potential tops.
The Combination Effect:
Volume Profile shows WHERE price will react. Z-Score shows WHEN it's stretched too far. Combine them and you get high-probability reversal zones.
The best trades happen when multiple technical factors align with the quantitative framework from Part 1.
Which technical tool has improved your timing most?
