15 July, 2016

POC at Extreme

Rationale & Trading Techniques

The Point of Control (POC) is a concept originally developed by Peter Steidlmayer who developed the Market Profile charting technique. It refers to the price at which the highest volume of trading occurred. The emoji trading Order Flow Suite calculates the POC location on a bar-by-bar basis for Numbers Bars as well as bar and candlestick charts to provide insight based upon the intra-bar location of the POC.

When the POC occurs at the extreme of a price bar and the bar direction opposes the price movement that led up to the bar, there is a strong indication that high volume traders have entered the market with sufficient volume to cause the previous move to stop and potentially reverse. This indicator is particularly effective when used in conjunction with the Ratio Display indicator.

The price level at which the POC at Extreme condition was encountered can be both highlighted and extended forward until it trades again allowing market-generated support/resistance levels to be clearly established within Sierra Chart.

 


Examples

As ES formed new daily lows, a POC at Extreme condition was encountered at 2263.00. Note how this price level provided support – the price extension line provides a reminder of this support level:

POC at Extreme 1 - Emoji Trading Order Flow Suite

 

Another POC at Extreme condition occurred in the 11:09:18 price bar after the retracement from the day’s low. Note how the next bar tested the POC price but did not breach it and the bar closed lower. Also note how at 11:11:24 another POC at Extreme condition was encountered but price could not break the high of the previous bar and this POC at Extreme support level was quickly broken implying another test of the support at 2263.00 was possible:

POC at Extreme 2 - Emoji Trading Order Flow Suite

 

 


POC at Extreme Settings

Input Name Description
Lookback Period If set to a value greater than 0, POC at Extreme conditions will not be displayed unless the current bar’s high (or low) is greater than (or less than) or equal to the highest high (or lowest low) within the lookback period.
Extend until future intersection? Select whether Extension Lines are enabled/disabled for the POC at Extreme price levels.
Extension Line Label Text indicator for the Extension Lines

 


Indicator Subgraphs

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ID Subgraph Description
SG1 POC Price Use to control the Extension Line coloring. It is recommended to set this to Auto-Colouring Based on +/-. With this set, Extension Lines can be colored to indicate potential support (POC at Extreme within an up bar) and resistance (POC at Extreme within a down bar).
SG2 POC Drawing Top Use in conjunction with SG3 to highlight the POC price. Follow this link for the Sierra Chart Notes about Top and Bottom Draw Style Pairs.
SG3 POC Drawing Bottom Use in conjunction with SG2 to highlight the POC price. Follow this link for the Sierra Chart Notes about Top and Bottom Draw Style Pairs.