What we're doing, and what we're setting aside
In the last lesson, the combination used two timeframes: M30 gave the scenario, M1 gave the entry. Now let's look at the second combination, and it's built differently: both layers live on the same timeframe. The profile on M5 defines the intraday trend, and the clusters on that same M5 give the entry point. We'll read, step by step, what's happening inside the candles.
The context is a trend model: the buyer's volume is known, and we're looking for an entry point to trade with the trend. The broader question — how much is left in this trend, is this the end of the uptrend or just the beginning — we're setting aside for now.
⚠️ Important: We're setting it aside only for this lesson. In a real trade, potential gets assessed before entry, and it's exactly what determines how big a stop you can afford. Here I'm showing the mechanics on their own, so they don't get lost inside a target-hunting discussion.
The rest of the framing for this breakdown:
- "Buyer," "seller" — this is a model of a volume footprint, not names (same as in the last lesson).
- Value area on the profile — 40%, as we set it up in lesson 2.4 (not the standard 70%).
- Instrument — crude oil (CL), overnight session. We look at clusters in Footprint,
Bid Askmode — the same one we set up in lesson 2.2.
The screenshots show what happened next, to the right of the point of analysis. You won't see that in Market Replay — that's exactly how you should practice.
The profile: where the last obvious volume is
The market is in an intraday uptrend: a strong impulsive move came out of a prior consolidation. We build a free-form profile — with the same Volume Profile drawing tool from lesson 2.4 — from the low to the first high formed so far.
M5, profile from the low to the first high. No clear volumes have formed up top yet; the last obvious volume is at the bottom, at the base of the move: VAH and VAL are marked with yellow lines, POC with orange.
And you can see it right away: there are no clearly formed volumes up top yet — price just ran through there on an impulse, and there was nowhere for it to linger and trade. The last clear, obvious volume is still down at the bottom — where VAH, VAL, and POC are marked. For now, that's all we have: price has gone far up, and the zone the buyer actually defended is far below. Working with a map like this is inconvenient — and this is where the lesson's main technique comes in.
The key: rebuilding the profile on every new high
We rebuild the profile — and we do it on the candle that made a new high above the previous one. Pay special attention to this: if you're looking for the buyer in an uptrend or the seller in a downtrend, this is the key to the whole rebuilding process.
M5, the profile rebuilt on the candle that made the new high. New levels: VAH on top, POC in the middle, VAL at the bottom; the support zone is marked separately.
Why rebuild specifically on a new extreme. A new high above the previous one is an ordinary trend pattern from technical analysis. It says one simple thing: the buyer actually made an attempt to continue the trend. Which means they're there. And since they're there, we need to see where they likely are. So at this point we recalculate the profile and get a fresh picture: where the VAH is, where the POC is, where the support is. I've marked the POC and VAL levels in the lower part as a separate zone — right now, that's the bounded support zone, the spot where it makes sense to wait for price.
M5, the profile rebuilt on the new high. The support zone is assembled from a cluster of levels: POC on top, VAL and the low of the last pullback at the bottom (teal boundaries).
And next — the same thing all over again. Price never actually tested the support zone we marked in the previous step, and made another attempt to go up. We consider the buyer still active — so we rebuild the profile again and refresh the information on zones and levels. The previous zone doesn't turn into junk in the process — old volume can still work as a level. It's just that the current map is now different.
We assemble the support zone from a cluster of levels:
- at the top — POC;
- at the bottom — VAL, the lower boundary of the value area;
- also there — the local extreme, the low of the last pullback.
We combine all of this into one zone. The logic is simple: this is exactly where buyer pressure should be at its highest. This is the best local price right now — the one from which a bounce upward can be expected with the lowest risk and the highest probability.
We have the address. Now we need the moment.
Clusters: how to read this picture
We move on to the fine detail — open the cluster chart in Bid Ask mode.
M5, Footprint Bid Ask. The orange box at the high marks two candles and a group of clusters that blocked the move up. Yellow marks the max-level outline of the candle.
Here's how to read it.
| What you see | What it means |
|---|---|
| Bright blue | strong buyer excess |
| Bright red | strong seller excess |
| Yellow outline | the candle's max level — ATAS marks it automatically on the row with the largest volume in the bar |
The outline is the same one from lesson 2.2. Remember I said the absorber is often sitting right there? Now you'll see why. Sometimes a candle has two outlines — that's a tie in volume between levels. On top of that, we separately track clusters of buy and sell activity.
We're not using the imbalance setting we turned on in 2.2 here: on this instrument, the excess in Bid Ask is easier to read by eye than by highlighting. The setting hasn't gone anywhere, and it'll be useful in other cases.
What you see at the start of the correction move at the high: two candles and a group of clusters that blocked the move up. There are strong buy-side clusters there too — the buyer was pushing, but couldn't continue the move: the seller was holding price back with limit orders. This is exactly the absorption from lesson 2.1, only now you're seeing it in the context of a zone. Right at the high there are also aggressive sellers at the max levels — they're highlighted in red.
As a result, price moves down and continues the downward move for a few candles. The candles there are ordinary: either trend candles that jump straight through clusters, showing strength of momentum, or stopping candles — the ones that ran into volume and closed in front of it. We're covering those right now.
The same logic as in the profile
Let's focus on the last three candles — there are a few important things to say here.
M5, clusters. The red zone is the last cluster that produced the downward impulse: the current seller resistance. Blue marks the stopping candle (a cluster below, with a close above it) and the current candle.
First and most important: the same logic that works in the profile also works in cluster analysis. Only instead of a large cluster of volume in the profile, we use a cluster of levels within the candles — either the POC level, or, even better, when everything lines up together: a cluster of levels plus the POC inside it. That's the equivalent of volume in the profile.
Next look at the direction of the candle. Usually that's the next one; if the candle was volatile and jumped straight through the volume, the current one might be enough — but you should always look at the next one too, it more often shows the true reaction than the current candle does.
The red zone marks the last volume — a cluster in the candle, the third from the right counting from the current one. That volume is exactly the current seller resistance we're relying on. I'm marking it with a rectangle stretched to the right, so the level stays visible across the following candles.
The second-to-last candle has a cluster at the bottom and a close above that cluster. This is a stopping volume: price tried to go lower, and you can see seller excess there — a red cluster — and below the cluster, a series of small sell clusters, most likely stops getting swept. But after that, price weakened, got stopped, and we see a close above the cluster.
⚠️ Important: The specific thing about a close like this: on its own, it is not a reversal candle, it's a sign — one of the following candles might change the dynamic. Keep the difference in mind: a sign is price's reaction to volume, while confirmation is breaking through the volume that produced the impulse. Right now we only have the former.
When you get one stopping candle with a cluster at the bottom, followed by one or more candles that form a cluster and move up, that's what forms a reversal pattern — this time in candle analysis terms.
Let me flag this right away, it matters: the principle is the same as the setup on the profile from 3.2, just at a smaller scale — which means the price you pay is different too.
| Formation | Where the stop sits | What you're paying |
|---|---|---|
| Profile setup (lesson 3.2) | behind the volume | wide stop, but reliable |
| Cluster pattern (this lesson) | behind the pattern | precise entry, but you'll get stopped out more often |
The most current candle: buyer excess in the clusters, but the closing position shows the buyer couldn't fully take control. We haven't broken the red zone — and we've seen that price was getting pushed down from there. So we don't have a sign that the seller is starting to move into losses. There's a good stopping cluster below that could reverse price — but there's no confirmation yet. We wait.
The stopping-volume level
M5, a new red zone at the cluster that held price back from rising. The last candle breaks through the previous cluster to the downside; price enters the support zone.
The situation develops. The second-to-last candle tried to go above our new red zone — I've marked it on the new cluster, because it's exactly the one that held price back from rising. And after price moved down and made a new impulse, the zone got confirmed: it really is a strong seller zone, and you can rely on it. The most recent candle breaks through the previous cluster to the downside — the seller is still strong.
And here's another important nuance. A stopping-volume level is considered a very good technical level.
Stopping-volume level — this is when price was moving in one direction, volume stopped it, and the candle closed in front of that volume without breaking through it — and then one of the following candles does break through that cluster and holds beyond it.
💡 Tip: A level like this is good, especially on the first test. And it's mirrored: even if it gets broken downward, and then price later breaks back up through it, it works again. It's worth watching for the next several candles.
For now, though, the situation is under seller pressure: we've already started entering the buyer's zone of interest — that same wide zone below. On the fresh candle, price gets stopped, and you can see a large cluster and seller excess. The sellers tried to go lower, and the move largely worked out for them, but a new batch of sellers hasn't managed to continue it yet.
A deep push into the zone
M5, a candle deep inside the support zone: a substantial seller cluster sits in the wide lower wick, but the close is clearly above it. The teal dashed line marks the boundaries fixing the base of the zone.
A new candle continues the downward move — the correction is under way. And price has moved very deep into the support zone, practically hitting its base: that same teal dashed line I used to mark the bottom of the zone.
This is where an interesting situation shows up. In the lower part of the candle, in its wide wick, a substantial seller cluster forms: aggressive selling excess across almost every cluster level — yet price closes clearly higher. Above the cluster, and above its own max level. This is also a stopping candle.
⚠️ Important: It's still not a reversal. Our last cluster, marked with the red zone, also hasn't been broken to the upside yet — there's no final confirmation. But the combination of factors suggests the downside move is slowing down.
We keep watching, and the whole focus is on the red seller-resistance zone: it's the key one right now.
The break of the red zone
M5, a bullish candle breaks through the red zone. Below, the green zone is the buyer's control zone; above, stopping clusters that price has held beneath.
A bullish candle moves up and breaks through our red zone — the one we've been watching as the key level. The close is above the previous candle's cluster.
What this changes. The lowest cluster now tells us that sellers are probably stuck there, with their stops still sitting nearby — and for us, that's a local support level to look for a buy entry off of.
But on the current candle above, you can see stopping clusters, and price has held beneath them. Which means a downward pullback could start right now: the price dynamic has flipped, but at the granular, cluster level, the buyer hasn't managed to break that level yet. There's going to be a fight over it.
The lower green zone is also the buyer's control zone, and if price comes to test it, the buyer needs to defend it.
The pullback: a fork in the road
M5, the downward pullback: short-side dynamics in the candles, but excess in the clusters themselves is buy-side — the buyer is aggressively pushing back against the seller.
The next several candles show short-side dynamics — a pullback down begins, and you can see it in the clusters: each new cluster breaks through the previous one. None of these four candles is a buy signal.
But overall the picture has shifted: we have a break of the last cluster by the buyer — the seller who was controlling this correction has started to lose. And right now we're testing our zone, where a large limit buyer was very active. Moreover, across this whole four-candle downward move, there's buy excess in the clusters — the buyer is aggressively trying to push back the seller's pressure. It's not working out yet.
Here you need to keep both branches in mind.
| What happens | What it means |
|---|---|
| Price moves above these blue clusters | the buyer has gone into profit — you can say they've started to control the zone |
| The zone gets broken to the downside | the buyer failed to hold trend support — go back to the profile and reassess the situation from a new angle, with this new information |
The signal candle
M5, a fresh candle breaks through the red zone of the last impulse cluster and closes above it. A repeat test of the support zone.
A fresh candle breaks through the red zone — the zone of the last cluster that produced the downward impulse. That's the same cluster where we saw seller control: price tried to make downward impulses from it during that candle and the next one.
Pay attention to the close: the candle closed above the cluster. There was a fight at that level — and the seller lost it. This is exactly the confirmation we were waiting for: the very volume that produced the impulse has been broken. A candle like this is a signal candle: the dynamic has shifted back in the buyer's favor.
⚠️ Important: One nuance to avoid getting fooled. This is already a repeat test, and per the rule from lesson 3.1, that's actually more of a negative: with every new test, the probability of the zone breaking goes up, and the best test is the first one.
What compensates for that is what's happening inside the candles: the buyer here isn't just sitting on a limit order — they're hitting the market and breaking the seller. We tested the green zone, where the seller was hitting the market and the limit buyer was absorbing it, and we can see that on this pullback the buyer is already acting aggressively, breaking the tempo. Now they've achieved a result. After this, you can expect the move up to continue.
Confirmation and outcome
M5, the candles after the signal candle: buyer excess in the clusters, price skipping past clusters and POC levels and closing above them.
Let's see where our series of patterns led. The first thing to watch in the candles that follow the signal candle is buyer excess in the clusters. The buyer starts attacking at market, sweeping away seller resistance, including in the order book: strong candle closes, price jumps past clusters, jumps past POC levels, and closes above them. In other words, at the levels where the fight was fiercest, price's reaction everywhere shows the same thing — the seller was losing, the buyer won. This confirms the long pattern we got earlier: the situation that started developing has the potential to keep developing.
M5, panorama (regular candles + profile, no clusters). Price tested the marked zone, produced an impulse, a pullback, and a second impulse.
And here's the overall panorama — we're back to regular candles with the profile. Price tested the zone we marked back on the profile, and then came the first impulse, a pullback, then a second impulse, and after that the trend continued.
Now compare two things: the stop-loss range we could afford, and the potential of the move that actually happened. The stop here is short, sitting behind the pattern — behind the low of the signal candle or behind the stopping cluster. This is not the volume-based stop from lesson 3.2: there we paid with width for reliability, here we pay with more frequent stop-outs for precision. And with a stop like this, the ratio in this case holds up at 1-to-3 and even 1-to-5.
⚠️ Important: We're measuring this after the fact, for calibration — in an actual trade the order is reversed: you assess the potential first, and it's exactly that which tells you what stop you can afford. And remember: the risk-to-potential ratio is only half the story. The other half is how often you're right: even a 1-to-5 ratio doesn't save you if your hit rate is too low. We'll work through that together in a separate lesson on risk.
What to keep in mind
- Rebuild the profile on every new high (or new low, in a downtrend). A fresh extreme = the buyer has confirmed an attempt to continue the trend, and you need to look again at where they are.
- The support zone is a cluster of levels, not a single line: POC on top, VAL and the low of the last pullback at the bottom.
- The profile's logic works in the clusters too. A cluster of levels plus a POC inside it = the equivalent of volume in the profile.
- A stopping volume is not a reversal, it's a sign: a cluster below and a close above it. Confirmation is breaking the very volume that produced the impulse.
- Watch the next candle — it more often shows the true reaction to the volume than the current one does.
- A stopping-volume level is mirrored, and it's especially good on the first test.
- A signal candle is one that breaks through the cluster that produced the impulse and closes beyond it.
- A cluster pattern means a short stop. More precise entry, but you'll get stopped out more often than with a profile-based setup.
Coming up: Here we entered with the trend: the zone held, and the clusters showed the moment. But in lesson 3.2 we left one scenario unresolved — the reversal setup on the profile, where the zone, on the contrary, got broken. Entering there works differently: by the time of the actual break, price has already moved on, and you need a pullback to the broken zone. How to catch that pullback without confusing it with a continuation — that's next lesson.