Mean reversion
Volume Profile Reversion
Fade the edges and trade back toward where the market built value.
In a balanced market, price tends to rotate around the value it has built. The volume profile makes that value visible: the Point of Control acts as a magnet, and the value-area edges as reversion points.
How it works
When price extends to a value-area edge without acceptance (no sustained trading beyond it), it often rotates back toward the POC. The strategy fades these edges in balance and targets the POC, while staying out when price accepts outside the value area (a sign of a new trend).
Entry rules
- ▸Identify a balanced session (price rotating within the value area).
- ▸Fade moves to the Value Area High or Low that show rejection.
- ▸Avoid entries when price accepts (trades sustainably) outside the value area.
Exit & risk
- ▸Target the Point of Control or the opposite value-area edge.
- ▸Stop beyond the value-area edge if acceptance occurs.
- ▸Exit if a breakout/trend develops out of balance.
Best for
Range/balance days and instruments with reliable volume data. It fails in strong trend days, so a balance filter is key.
Build this strategy in Algovex
Every component of this strategy is a node in Algovex — drop them on the canvas, connect the logic, backtest on a real engine, and export to code. No programming required.
Key terms
Frequently asked questions
How do you trade the Point of Control?
In a balanced market, the POC acts as a magnet: traders fade the value-area edges and target a rotation back to the POC. When price accepts outside the value area, the balance assumption breaks and you stand aside. Algovex exposes the POC and value area as outputs to backtest this.