Volume Profile indicator

What is Volume Profile

Volume Profile is an indicator that can determine strong support-resistance levels by collecting and analyzing trading volume. It can also show the movement of retail users and “big players”. Additionally, it can be applied to identify reversal points.

 

“Don’t rely solely on price action. Use the volume profile indicator to confirm market movements.”

 

Volume Point of Control (VPOC) is the area with the highest trading volume, considered the most important support or resistance area, where the market is likely to reverse.

 

Advantages and disadvantages of Volume Profile Indicator

Advantages	Disadvantages
– Can analyze price movements more realistically	– Requires time to understand and study this technique
– Helps reduce trading risk by showing the frequency of trades at each price level
– Helps to better understand market trends

 

How to use Volume Profile Indicator

In the GBPUSD chart at H1 timeframe (Figure 1), the price reverses at the VPOC point and continues in the trend direction through low volume areas. When the indicator shows volume levels to create a Volume profile, it helps Forex traders identify likely areas for reversals.

 

Volume Profile Indicator Settings

• Range period: Time range used for chart calculation
• Range count: Number of included ranges
• Timeshift: Index value shift
• Mode step (points): Step shift per point
• Point scale: Step multiplier
• Volume type: Uses MT4’s Tick volume by default. Forex traders can change to Real volume
• Data source: Volume data source
• Bar style: Index bar style
• Draw direction: Index bar direction
• Color 1: Bar color
• Color 2: Bar color
• Line width: Bar width

 

Summary

Overall, this indicator provides good trading opportunities as it clearly shows possible market trend change zones on the price chart. Thanks to indicatorspot.com for the great information.

Interested users can download and try the indicator at >>>Click<<<

 

Team eaforexcenter.com