The Hidden Trading Formula: Volume Profile & Rising Wedge for Pro-Level Market Predictions

Why Most Traders Get It Wrong (And How You Can Avoid It)

The Forex market is a beast. One moment, your trade is soaring like a SpaceX rocket; the next, it’s plummeting like your motivation on a Monday morning. If you’ve ever wondered why your technical analysis isn’t giving you an edge, it’s because you’re missing a critical piece of the puzzle: Volume Profile + Rising Wedge.

While most traders rely on surface-level indicators, pros dig deeper into market structure and liquidity. Volume Profile and the Rising Wedge are two of the most overlooked yet insanely powerful tools that separate the amateurs from the elite. But here’s the catch—most people misunderstand them.

What is Volume Profile (And Why It’s Your Best Friend)?

Volume Profile is like that friend who always knows the best restaurants—except instead of food, it tells you where the money is. This tool shows the traded volume at different price levels, highlighting key support and resistance zones.

Common Mistake: Most traders obsess over candlestick patterns but ignore volume. A bullish candle with low volume? That’s as unreliable as a weather forecast.

Why It Works: Volume Profile exposes hidden liquidity zones where big players (banks, hedge funds) accumulate or distribute positions. Knowing these zones means you can predict reversals and breakouts with sniper-like accuracy.

How to Read Volume Profile Like a Pro:

1. Point of Control (POC) – The price level with the highest volume. This acts as a strong magnet for price action.
2. High-Volume Nodes (HVN) – Areas of intense buying/selling interest. These levels offer great entries for trend continuations.
3. Low-Volume Nodes (LVN) – Weak price areas where price moves quickly. These zones act as breakout triggers.

The Rising Wedge: The Trap That Most Traders Fall Into

If the market were a crime scene, the Rising Wedge would be the red flag that screams, “Danger! Trap ahead!”

A Rising Wedge is a bearish reversal pattern that occurs when price moves upwards within converging trendlines. It tricks traders into thinking the trend is bullish—but in reality, the momentum is weakening.

Why It’s Dangerous:

• The volume decreases as price rises—indicating a lack of real buying strength.
• The break below the wedge signals aggressive selling, causing rapid declines.
• Rookie traders see a bullish trend and buy. Smart traders wait for the breakdown and short.

The Winning Formula: Combining Volume Profile with the Rising Wedge

Here’s where the magic happens. Alone, Volume Profile and Rising Wedge are powerful, but together? They create a next-level forecasting tool that can predict price reversals before they happen.

Step-by-Step Strategy to Dominate the Market

1. Identify the Rising Wedge – Look for an upward-sloping, narrowing price formation.
2. Check Volume Profile – If price is near a High-Volume Node (HVN), it signals potential resistance.
3. Watch for Declining Volume – If volume decreases while price rises, the move lacks strength.
4. Wait for the Breakdown – A strong bearish candle breaking below the wedge confirms the reversal.
5. Enter at Retest – Enter short when price retests the broken wedge support (now resistance).
6. Target the Next Liquidity Zone – Set profit targets at Low-Volume Nodes (LVN) where price is likely to accelerate.

Real-World Example: How a Pro Trader Used This to Catch a 300-Pip Move

Let’s take EUR/USD as an example. In September 2023, a Rising Wedge formed near a key HVN on the Volume Profile. As price reached the top of the wedge, volume dried up—indicating weak buying pressure.

When price broke below the wedge support, smart money stepped in, triggering a 300-pip sell-off in just a few days. Traders who understood this correlation were able to capitalize on the move while others were left scratching their heads.

Advanced Tips & Ninja Tactics

• Look for Divergences: If RSI or MACD shows divergence while price is rising in a wedge, the reversal is even stronger.
• Combine with Order Flow Analysis: Track real-time order flow to confirm institutional activity at key levels.
• Use Smart Trading Tools: Leverage tools like the StarseedFX Smart Trading Tool for automated lot sizing and trade management.

Final Thoughts: The Trading Edge Most People Ignore

Mastering Volume Profile and Rising Wedge isn’t just about knowing what they are—it’s about understanding how to use them together to spot high-probability trade setups. By identifying hidden liquidity zones and pairing them with classic price action traps, you gain an unbeatable edge.

If you’re serious about leveling up your trading game, check out our Free Trading Plan and Community Membership to access elite strategies and real-time insights.