P
PipsGrowth

Key Takeaways

Difficulty:Advanced
Reliability:Very High
Category:volume
Timeframes:1H, 4H, Daily

Volume Profile

volumešŸ“Š 1H, 4H, Daily

Shows volume traded at each price level, identifying key support/resistance zones.

Formula

Code
Volume Profile = Sum of volume at each price level

Detailed Explanation

Volume Profile displays volume horizontally at price levels instead of time-based.

**Key Components:** - **POC (Point of Control)**: Price with highest volume - **VAH (Value Area High)**: Upper boundary of value area - **VAL (Value Area Low)**: Lower boundary - **Value Area**: Contains ~70% of volume

Parameters

Lookback
Default: Session
Period to analyze

šŸ“ˆ Bullish Signals

Price breaks above high volume node with momentum

šŸ“‰ Bearish Signals

Price breaks below high volume node with momentum

Python Implementation

Basic volume profile calculation

Python
import numpy as np
def volume_profile(df, bins=50):
price_bins = np.linspace(df['low'].min(), df['high'].max(), bins)
profile = {}
for i in range(len(price_bins)-1):
mask = (df['close'] >= price_bins[i]) & (df['close'] < price_bins[i+1])
profile[price_bins[i]] = df.loc[mask, 'volume'].sum()
return profile

TradingView Pine Script

Try on TradingView
JavaScript
// TradingView has built-in Volume Profile indicator
// Add from Indicators > Volume Profile
šŸ“Š Use TradingView for Advanced Charting
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MT5 MQL5 Code

C++
// Volume Profile typically calculated manually or via custom indicator

Python Libraries

numpy
Numerical computing
pip install numpy

Common Mistakes

āœ—Ignoring LVN as fast-move zones
āœ—Not updating profile for new data

Confirmation Signals

Price action at levels
RSI
Candlestick patterns

Best For

Support/resistance identificationKey level tradingInstitutional level analysis

šŸ’” Pro Tips

  • ā€¢HVN (High Volume Nodes) act as magnets
  • ā€¢LVN (Low Volume Nodes) price moves through quickly
  • ā€¢POC is the price with most volume - strongest level
Last updated: December 29, 2024

Educational Disclaimer

This content is for educational purposes only and does not constitute financial or investment advice. Trading involves significant risk and you may lose your capital. Always consult a licensed financial advisor before making investment decisions.

Learn More

Investopedia - Technical IndicatorsBabyPips - Technical IndicatorsMetaTrader 5 Docs

Frequently Asked Questions

Related Indicators

On-Balance Volume (OBV)

Cumulative indicator that adds volume on up days and subtracts on down days. Shows buying/selling pressure.

Volume Weighted Average Price (VWAP)

Average price weighted by volume, commonly used as a benchmark for institutional trading.

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