Volume Profile (VPVR)
Shows the volume traded at each price level as a horizontal histogram. Identifies high-volume nodes (HVN) as support/resistance and low-volume nodes (LVN) as price magnets for rapid movement.
What is Volume Profile?
Volume Profile (also called VPVR — Volume Profile Visible Range) is a charting tool that shows the distribution of volume across price levels rather than time. It displays a horizontal histogram on the right side of the chart, where the width of each bar represents the amount of volume traded at that price.
Unlike the standard volume histogram at the bottom of a chart, Volume Profile answers: "Where was the most volume transacted?"
Key Concepts
Point of Control (POC)
The POC is the price level with the highest volume traded in the visible range. It acts as a magnetic price level — price tends to gravitate back to the POC after moving away.
Value Area (VA)
The Value Area is the price range where 70% of the total volume was traded. This defines the "fair value" zone:
- Value Area High (VAH) — Top of the 70% volume range
- Value Area Low (VAL) — Bottom of the 70% volume range
High Volume Node (HVN)
Areas of heavy trading — strong support/resistance levels because many traders entered here.
Low Volume Node (LVN)
Areas of light trading — price moves quickly through these zones because there is little interest. Acts as a vacuum that pulls price through rapidly.
Signal Interpretation
- Price above POC → Bullish; POC is support
- Price below POC → Bearish; POC is resistance
- Price enters Value Area → Move back to VAH or VAL is likely
- Price breaks out of Value Area → Strong directional move; next target is the POC of the range above/below
- Price approaching LVN → Expect rapid movement to the next HVN
Trading Strategies
- POC re-test: After price breaks away from POC and returns, trade the bounce in the direction of the original breakout.
- Value Area fade: If price spikes outside the Value Area and returns inside within the same session, fade back to POC.
- LVN acceleration: When price breaks into an LVN zone, ride the momentum — there is no resistance until the next HVN.
Tips & Best Practices
- Volume Profile is most powerful on daily, weekly, and monthly charts where the profiles represent significant transaction history.
- Always look at the session volume profile for intraday trading and the composite profile for swing/position trading.
- Institutions leave their footprint in volume profiles — HVNs often represent institutional accumulation zones.