Built For
Instruments: Futures/Indices
Trading Style: Scalping/Day Trading
Playbook Overview
This strategy is built around the idea that price often moves impulsively through areas of low volume, and later revisits those same areas so that large market participants (like institutions or professional traders) can reload or defend their positions. These price zones are called Low Volume Nodes (LVNs) and represent areas where the price moved fast and volume was low, showing strong activity from large traders.
LVNs typically form after price reacts from a key level, such as a supply zone, demand zone, support, or resistance level. When the price moves aggressively away from that level, it signals that strong buyers or sellers are involved. The fast move leaves behind a low-volume node, and that becomes an area of interest for a future entry.
The core idea of the strategy is to wait for the price to return to the LVN, and then look for confirmation using order flow tools, such as:
- Volume profiles
- Heatmap
- Footprint charts and delta
Once you see signs that large traders are defending the level again, you can enter the trade with a tight stop and aim for a high reward-to-risk setup.
Playbook Rules
Identify a Level of Interest
Start by marking a clear supply, demand, support, or resistance level. Look for a period of market consolidation followed by an impulsive move away from that area. This move confirms the presence of strong buyers or sellers.
Wait for a Pullback
Allow the price to move away from the level. This is not an entry yet. You want to see the price rally or drop away first to confirm that large participants have entered.
Identify the Low Volume Node (LVN)
Use a volume-by-price profile to find an area where price moved quickly with little to no volume. This is the LVN — the area we’ll watch for a return move.
It’s important to note that an LVN doesn’t have to be a single exact price — it can be treated as a zone where volume was thin and the market moved through quickly.
Wait for Price to Revisit the LVN
Now wait for the market to pull back into the LVN. At this point, you're watching for confirmation of buyer or seller defense.
Look for Confirmation
Use heatmap, footprint charts, delta, or order flow to confirm the presence of large buyers/sellers.
Enter the Trade
Once confirmed
- Go long if you're bouncing off demand or support.
- Go short if you're rejecting supply or resistance.
- Place your stop just above or below the LVN or recent low/high.
- Adjust your position size based on your stop to keep dollar risk the same.
Set Your Target
Aim for a logical price level like:
- High of day / Low of day.
- Another supply or demand zone.
- Another LVN.
- Support/resistance levels.
You can scale out or take full profits based on context and volatility.
Risk Management
- Always define your dollar risk before entering.
- Adjust position size based on stop distance to keep risk consistent.
- Accept that not all trades will work, and stay disciplined.
Pros and Cons of the Strategy
Like any setup, this strategy has its strengths and limitations. It's powerful when used with focus and discipline, but it requires attention to detail and real-time execution.
Note: The cons listed here aren’t disadvantages. They are things to be aware of — important characteristics that require patience, discipline, and proper management to make the playbook work effectively.
Pros:
- Follows real institutional activity
- High reward-to-risk potential
- Uses objective data (volume, order flow)
- Avoids guessing or chasing trades
Cons (Things to Be Aware Of and Manage)
- Requires strong focus and attention to detail
- Multiple LVNs may appear — choosing the right one takes experience
Trade breakdown
Trade Example: Long from LVN
The key zone in this scenario was a demand zone, which was marked based on previous price action. This zone had shown strong buyer interest before and was being watched as a potential area where price might react again.
At the open, the market sold off and dropped straight into this demand zone. Price found support there and bounced cleanly, showing that buyers were stepping in once again.
On the bounce, the market rallied with strong momentum. During that move, two Low Volume Nodes (LVNs) formed — the first at 5563, and the second deeper at the 5550s. These LVNs marked areas where price moved quickly with minimal volume, a sign of aggressive buyer activity.
As we can see this on the heatmap.
Later in the session, price pulled back into the 5563 LVN, and confirmation began to show up:
- Passive buyers were sitting at the level, holding steady as sell orders hit the book.
- Aggressive sellers tried to push the price lower, but the price failed to break, showcasing absorption.
- Each time the price broke a low, it was quickly bought back, showing that sellers were getting trapped.
With all signs pointing to strong buyer defense, a long entry was taken at 5561, using a tight stop just below the zone to define risk.
The target was the high of the day, and the price reached shortly after as it rallied cleanly off the LVN.
