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Lesson 5: 11.5: Low Volume Nodes (LVN)
Understand price valleys where trades were scarce, representing unfair value and rapid price slides.
1. Mechanics of Low Volume Nodes
Low Volume Nodes (LVNs) are valleys in a volume profile where very little trading activity has taken place.
These areas represent prices that the market rejected rapidly. LVNs are considered 'unfair value' zones because participants did not want to transact there, leading price to sweep or slice through them with extreme speed.
★ Price Slippage: Because of the lack of historical transactions and resting orders, there is little structural friction to slow down price inside an LVN.
2. Operational Tactics for LVNs
• Fast-Transit Zones: When planning trades, look at LVNs as 'liquidity voids'. If price breaks into an LVN, expect a rapid run to the next High Volume Node on the other side.
• Stop Placement: Never place a stop-loss inside a major LVN, as price can easily slide through. Place stops behind the protective barrier of a neighboring HVN.
Click to enlargeInteractive Volume Profile Canvas
Volume profile plots the cumulative volume traded at specific price levels, revealing the Point of Control (POC - price of highest volume) and the Value Area (where 70% of transactions occur).
Profile Controls
KNOWLEDGE RECONNAISSANCE
Why does price tend to move very rapidly through Low Volume Nodes (LVNs)?
More lessons in this module
- 11.0: Introduction to Volume Profile
- 11.1: Building a Volume Profile
- 11.2: Point of Control (POC)
- 11.3: The Value Area (VAH & VAL)
- 11.4: High Volume Nodes (HVN)
- 11.6: Composite Profiles
- 11.7: Volume Profile Strategies
- 11.8: Practical Application: Profile Playbook
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