POI: How the market reveals its critical decision points

When prices begin to move significantly on the chart, it’s not always a coincidence. Behind that movement lies a structured reason, and that’s where the concept of POI — Point of Interest — comes into play. Understanding POI is essential for any trader who wants to go beyond superficial analysis and truly grasp what the market is trying to tell them.

POI is not just another technical term to memorize. It’s a concept that separates traders who operate on intuition from those who operate with structure. When price returns to an area where something important previously happened, the probabilities change dramatically.

Understanding POI: what prices reveal about market intent

The term POI, short for Point of Interest, describes a specific zone on the chart where the market shows real interest in trading. But what does this mean in practice? It means that in certain areas, there is a concentration of liquidity, buy and sell orders, or abnormal movements that leave marks on the chart.

These marks don’t disappear. Price often behaves like a magnet when it returns to these POIs. It may come back to reverse (change direction), to confirm a previous breakout, or simply because liquidity is available in that zone.

A POI is determined by specific, measurable events: a monumental candle that breaks through barriers with exceptional volume, an unfilled price gap, a false breakout that triggered stops, an area where many buy or sell orders accumulated, or even the point where Market Makers entered the move for the first time. Each of these scenarios leaves a mark.

Identifying POI in practice: signals not to ignore

Before you can use POI in your trades, you need to recognize one. There are clear patterns indicating the presence of a significant POI.

Breakout candles are the most obvious. When you see a massive upward or downward candle with extraordinary trading volume, you’re observing a moment when real liquidity entered the market. The price forcefully broke through a barrier, and this starting point is often revisited.

Rejection candles tell a different but equally important story. A candle with a long wick — like a Hammer or Shooting Star — reveals that the market tested a level but rejected it strongly. These rejection points often act as price magnets.

Liquidity gaps are zones where the price jumped quickly, leaving an empty area. The market hates imbalances and often returns to fill them. When you identify these gaps, you’re spotting potential POIs.

Demand and supply zones are dense aggregations of orders. They’re not always visible clearly, but when you can see them — through volume profile or order book analysis — you’ve found a powerful POI.

From spectator to trader: how to use POI in your trades

Identifying POI is half the battle. The other half is turning that knowledge into profitable trades.

The simplest strategy is: wait for the return. When you mark a POI on your chart, monitor it. When price returns to that area — days later, weeks later, the time doesn’t matter — you’ll have a high-probability entry point. But this only works if you look for confirmation signals: a reversal candle starting to form, a break of the previous price structure, or any indication that the market is recognizing that level.

A precise stop loss is where many traders fail. Don’t place your stop exactly at the POI. Place it 10 to 15 points below or above the POI, depending on your trade direction. This gives the price room to interact with the POI without liquidating your position due to noise.

Integrating with indicators amplifies your chances. Suppose you’re monitoring a POI and the price approaches. If simultaneously the RSI shows 70 (overbought), you have a stronger signal to sell. If the price is below the 50 EMA but approaching a demand POI, that reinforces the idea of a possible upward move.

Profit targets should be set with a structured logic. When you enter from a POI, what’s the next resistance or previous high? A historical support? These are your natural goals.

Practical example: XRP and the anatomy of a POI in real time

To turn theory into real understanding, consider this scenario with XRP on a 15-minute chart. A monumental upward candle pushed the price from $1.9500 to $2.0000 in minutes. This clearly indicates a POI in the $1.9500 to $1.9600 zone — the launch point of liquidity.

Later, after two hours, the price returns to that area. Now, you’re monitoring. What happens? If a Hammer pattern candle appears at $1.9550, that’s no coincidence. It’s an indication that traders recognize this level, are testing it, and there’s potential for a bullish reversal.

In this scenario, a structured technical analyst could anticipate an upward move toward the previous high at $2.0000. The risk? Any solid close below $1.9450, which would indicate a break of the POI downward.

Important note: This example is solely for educational purposes and does not constitute trading advice.

Integrating POI into your analysis system

POI doesn’t work in isolation. It works best when integrated into a broader market view.

First, determine the overall market structure. Is the trend bullish or bearish? A POI works better when aligned with the dominant trend. If you identify a POI but are trading against the main trend, you’re working against the odds.

The 50/200 EMA provides trend context. If a POI is above this moving average, it tends to act as support. If below, it tends to act as resistance. This is valuable information to calibrate your expectations.

Volume is the final confirmer. A reversal at a POI accompanied by extraordinary trading volume is significantly more reliable than one with low volume. Volume is the language of market intent.

Common pitfalls when working with POI

Even understanding POI, many traders fall into traps that ruin their performance.

The first is entering before confirmation appears. Just because price is near a POI doesn’t mean it will interact with it. Wait for signals. Wait for candles. Wait for structure.

The second is ignoring the overall market trend. A POI in a downtrend can be a rejection opportunity, not a buy. Always contextualize your POI within the bigger picture.

The third is blindly trusting POI without proper risk management. POI increases probabilities but doesn’t guarantee them. Always have a stop loss. Always size your position appropriately.

Finally, don’t use POI on timeframes unsuitable for your style. If you’re a scalper, work with 15-minute charts. If you’re a swing trader, use 4-hour or daily charts. Timeframe context matters.

POI is a tool that works best when you understand not only how to identify it but also when and how to use it. When executed well, POI offers traders a clear lens to see what the market is really saying.