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In this video we answer our subscribers’ comments about the volume profile tool. What time frames are best and what levels should you focus on?

Watch the video to learn more…

Volume Profile Analysis

In this video we are going to go through our volume profile settings as well as what charts you can use them on and what time frames. The volume profile is a tool that was created to find particular levels based on volumes at prices. This tool shows us multiple things, for example, the most volume traded level known as the point of control. The value area high, the highest point where 70% of the volume has been traded in a particular period of time. The value area low is the lowest point where 70% of the volume has been traded in a particular period of time. The tool also shows us high volume and low volume areas. All of these areas can be used to identify supply and demand zones which can offer opportunities. 

The Monthly Volume Profile

Volume profile monthly

In the first example we will be showcasing the monthly volume profile on a 4hr chart. This is showing us multiple levels from a higher time frame perspective. This will show us the most volume traded level of last month known as the point of control, the value area high (VAH) and the value area low (VAL). We will also see high and low volume nodes, all of these levels can be used as supply and demand in the market. As we can see in this case the price rejects off the value area high before breaking back within the value area. When the price does this we can often see the price move from one side of value to the other, in this case it was from the VAH to VAL. The price then reacted from the VAL and moved back higher. 

The Weekly Volume Profile

weekly volume profile

The weekly volume profiles can be used on the 4hr and 1hr charts, this gives us enough time to identify key support and resistance levels and identify a key reaction. As we can see from the chart, the price is reacting to the key levels identified by the volume profile. First the price breaks lower and reacts with the high volume node, we then see the price rally up and find resistance at the VAL, POC and VAH. 

The EU & US Volume Profile

volume profile

The next volume profile set up is for intraday trading charts like the 15 minute and 5 minute. These volume profiles look at the previous European and US Sessions. These levels can offer daily trading opportunities but can also have levels tested more often. These levels are not as strong as higher time frame levels but can see significant reactions in the short term. Trading opportunities from these levels are meant for scalping ideas not for long term moves. 

Did you see our Stock Market Analysis? You can see it here.

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