Volume Profile is an advanced charting technique that displays trading activity (Volume), accumulated over a specified time period, at specified price levels. This technique plots a histogram on the chart meant to reveal dominant and/or significant price levels based on Volume at Price over a specified period of Time. Essentially, Volume Profile compares and calculates the total volume traded at a specific price level during the specified time period, to the total overall volume for that same period. Then represents and displays this information as a vertical histogram making it easily visible to the trader.
2 Distinct Composite Profile Types:
* Time (TPO)
* Volume (VPO)
5 User Configurable Composite Profile Period/Duration Types:
* Daily * Weekly * Monthly * Yearly * Contract
Configuration Settings allow for a multitude of choices and ways to view Session Profiles of Unique Revolving Durations
Calculated and Displayed Levels of Significance:
Value Area (VA) – Price Range of Specified Percentage from Profile Volume
Value Area High (VAH) – Highest Price Level of Profile Value Area
Value Area Low (VAL) – Lowest Price Level of Profile Value Area
Point of Control (POC) – Price Level of highest traded volume in Profile
Volume Weighted Avg Price (VWAP) – Price Level of Profile Vwap
Previous Close (PC) – Last Closing Price Before Profile Start DateTime
Profile High (HIGH) – Highest Price Reached of Profile Duration
Profile Low (LOW) – Lowest Price Level Reached of Profile Duration
Profile MidPoint (MID) – Midpoint Price level of Profile Duration
Session Profile Indicator Properties Settings
Profile Type – Volume(VPO) or Time(TPO) (Beta)
Profile Duration – Choose Between 5 Different Profile Types
(Days, Weeks, Months, Contracts, or Years!)
Value Area Percent – User Configurable from 0 to 100 percent
Histo Placement – Configurable to Display on Left or Right of Session
Histo Width – User Configurable in static pixels
Histo Color – User Configurable to any Color and any Opacity
Histo VA Color – User Configurable to any Color and any Opacity
Levels All – Independent user Configurable Colors, Style, and Widths
Session Profile ToolBar Icon DropDown Menu Settings
Access DropDown Menu with a Single Click for Quick/Easy Configurations
Change Profile Session Duration with a couple simple clicks
Histo – Configurable to Display on Left or Right Side of Profile Session
Histo – Hide or Show Profile Histogram with Simple Single Click
Levels All – Independently Hide or Show any Level and/or Histogram
Levels ALL – Levels can be extended across the entire Session.
Levels Current – Levels can be extended across the entire chart area
Levels Last – Levels can be extended across the entire chart area
Additional Summary Information Displayed:
Profile DateTime Start
Total Range in $$, Ticks
Current Net Change in $$, Ticks, and Percentage
ALL Plots Can be Quickly Hidden (INDIVIDUALLY and/or Altogether)
– ALL Plot Colors and Styles are Completely User Configurable!
– ToolBar DropDown Icon for Simple & Easy User Configurations!
Volume Profile is an extremely valuable and versatile technical analysis tool that is used by trader’s all over the world. There are Numerous trading strategies out there using Volume Profile as a key component. One thing that many traders will use volume profile for is identifying basic support and resistance levels. To do this, the trader relies on, and analyses, past price movements and volume behavior. This type of methodology can be useful in assisting the trader to apply meaning or significance to price levels where the market has already visited. Below are just a few more basic examples of how a trader might utilize volume profile techniques..
– If the current day opens above the previous day’s value area (but still below the Previous Day’s Profile High) look for price to retrace back towards the Previous Days Point of Control and then proceed to rise again in the original direction of the current day’s open.
– If the current day opens below the previous day’s value area (but still above the Previous Day’s Profile Low) look for price to retrace back towards the Previous Days Point of Control and then proceed to fall again in the original direction of the current day’s open.
– If the current day’s opening price is completely outside of the previous day’s profile (above the Previous Profile High or below the Previous Profile Low) this can be seen as a possible strong trend and/or runner in the direction of the current opening price relative to the previous day’s profile range.
The key to Volume Profile’s continued relevancy is its versatility. It is an advanced charting tool that truly does have a wide array of uses. Unlike many other techniques, there is little to no debate about Volume Profile’s usefulness. The data that is provided by Volume Profile is indisputable, leaving it to the trader to find new and creative ways to use it.