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Tools & IndicatorsVolume Profile
VolumeAdvanced[ MP.IND.VOLUME_PROFILE ]

Volume Profile

Volume Profile (VPVR)

Volume Profile is perhaps the technical analysis tool closest to the way institutional traders and market makers think about the market.

Category
Volume
Difficulty
Advanced
Markets
Stocks, Indices, Futures
Timeframe
1H, 4H
Combinations
3 tools
Signals
7 setups
LIVE CHARTVolume Profile ACTIVE
[ HOW TO READ THE CHART ]
Green Zone: Price above POC → Bullish bias: buyers control the fair value
Red Zone: Price below POC → Bearish bias: sellers control the fair value
Main Line: POC retest as support → High-probability long entry
Confluence: Combine Volume Profile with VWAP for maximum probability
[ WHAT TO WATCH ON THE CHART ]
Observe how Volume Profile behaves relative to key price points. Note moments when the indicator reaches extreme levels and how price reacts. Look for divergence patterns between the indicator and price movement.
[ FORMULA ]
Distribution of volume by price level in the selected range
POC = level with maximum absolute volume
Value Area = range containing 70% of total volume
VAH = Value Area High | VAL = Value Area Low

What signals does Volume Profile generate?

Price above POC → Bullish bias: buyers control the fair value
Price below POC → Bearish bias: sellers control the fair value
POC retest as support → High-probability long entry
VAH test from above → Possible resistance, rally slowdown
VAL test from below → Possible support, downtrend slowdown
VA breakout with volume + LVN above → Fast move toward the next HVN
'Rule of 80%': price enters yesterday's VA → Target the opposite side of the VA

What is Volume Profile and how does it work?

Volume Profile is perhaps the technical analysis tool closest to the way institutional traders and market makers think about the market. Unlike traditional volume (which shows volume over time), Volume Profile shows WHERE the most trades occurred by price level. This creates a 'liquidity map' of the market: zones where many trades occurred (high value, often support/resistance), zones where few trades occurred (low volume nodes, price passes through them quickly). Used by Market Profile traders, order flow traders and all professionals in futures and stock trading.

How do you use Volume Profile in trading?

Volume Profile introduces fundamental concepts: 1) POC (Point of Control) — the most important level: - It's the price level with the maximum absolute volume in the analyzed range - Acts as a very strong magnet: price tends to return to the POC - In a range, the POC is the market's 'fair value' - If price is far from the POC, there's pressure to return to it 2) VALUE AREA (VA) — the heart of the market: - The price range in which 70% of all volume occurs - VAH (Value Area High) and VAL (Value Area Low) are its boundaries - 'Rule of 80%': if price enters the previous day's (or week's) VA in more than 80% of sessions, it tends to reach the opposite side of the VA 3) LOW VOLUME NODES (LVN) — the market's highways: - Zones where very little volume occurred: price passes through them quickly - In a breakout, if between price and the next HVN there's an LVN, the move will be fast - Price gaps often coincide with LVNs 4) HIGH VOLUME NODES (HVN) — the roadblocks: - High volume zones: price consolidates here often - They act as strong support and resistance - The POC is always an HVN but not all HVNs are the POC 5) PROFILE TYPES: - Fixed Range: analyzes a specific range (e.g. last week) - Session Volume Profile: each day has its own profile - Visible Range: shows the profile of everything visible on the chart

What are the strengths of Volume Profile?

Provides the true liquidity map of the market
Extremely powerful for indices and futures where volume is transparent
Indicates where the real institutional support/resistance is
Rule of 80% is highly reliable

What are the limitations of Volume Profile?

Complex to learn completely
Less effective on Forex (estimated volume)
Requires specific platforms (TradingView, Sierra Chart)
Doesn't work well on very low TFs
[ RELATED CONTENT ]
ICT / SMC:Liquidity
Glossary:Breakout
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