Volume Profile Indicator
In this chart were trading with the Volume Profile which is an advanced charting study that displays trading activity at specified price levels over a specified time period. Trading this chart method makes it possible to visually see the market as a whole and the major support and resistance levels. This is what big money and trading firms use to trade the market each day.
The Volume Profile indicator is used in stocks and futures markets. It is a volume-based indicator that identifies six key value areas used by major trading firms to trade the markets. The indicator identifies six levels: the Point of Control or POC, Value Area High and Value Area Low, or VAH and VAL as they appear on the chart. And the High, Low, and Mid Range areas.
Volume Profile calculates the total volume for the session at each price level and will give you market-generated information about what price and range of prices are the most traded. Several important levels come into play when trading the volume profile chart and our list below.
The volume profile plots all those areas in real-time and does not lag, and plots them on the chart. The colors of the lines can be customized to your liking. It can be used on any chart type, including Renko, Range, Volume, etc. The POC line or Point of Control is like a magnet for price action as this is the area where the most volume is traded.
Crude Oil and the POC line or Point of Control is a major support and resistance level in trading that comes into play every day. This is were the big money enters the market and the most volume traded. In the chart below buy above the POC line target that VAH and Mid line which are a resistance level for a significant gain.
In this chart above were trading Crude Oil with the volume profile and got long on a breakout of the POC Line. Price moves higher into the Value Area High and MID line, and we look to exit, and we moved our stop to the Value Area High line. These levels come into play daily, are precise and accurate, and move based on the price movement, so there is no lag.
The Point of Control line is the major support level for the day. This is the price level with the highest traded volume. So its the major support line or line in the sand on the chart for trends. In this chart we traded just one contract of Crude Oil. Price got over the POC line we go long as the candles are engulfing and green over the POC line and our targets are the VAH line and Mid Line. Price action moves up and our stop is protecting our gains and we exit at resistance levels with a significant profit on the trade of Crude Oil.
The Value Area is another major support line that comes into play trading each day with volume profile.
In the chart above were trading the ES with the volume profile indicator. The VAL area or Value Area Low as above chart shows is a major support level. The ES had sold off down to the lows, and price rallied up to the VAL area, the green line. With the market sell off it was due for a rebound. Price broke out of the Value area we went long two contracts. Price moved up in a bullish move and hit our targets for over a $800 gain on the two contracts.
The price action is move from one price level to the next. And we traded the breakout for a significant gain. This is very powerful and accurate indicator that you can use in your trading each day. Simple to read and put to work in your trading.
Traders must understand the terminologies associated with the volume profile indicator.
Volume profile is an advanced charting indicator that displays total volume traded at every price level over a user specified time.
The volume-weighted average price (VWAP) appears as a single line on intraday charts. VWAP represents a view of price action throughout a single day’s trading session. Retail and professional traders use the VWAP to help them determine intraday price trends. The VWAP uses intraday price data.
The VWAP indicator is widely used among retail and professional traders. As it merges the two most essential factors in technical analysis: price and volume. VWAP gives traders insight into how the futures trade for the day and a good price to buy and sell.
Here the price runs to the high of the day, and then selling begins below the VAH line. And you can see from the chart the importance of all the Volume Profile levels and how they act as support and resistance for the price levels.
The chart above is the ES, and our Volume Profile labels all the key price levels. Now, these levels are all used by the major trading firms and institutions. As trading is all about support and resistance levels and these are the major levels each day that are automatically plotted for you with the volume profile indicator.
The POC line or point of control is the last line of support so we enter a short as market is getting weaker and are target is the area of the green line. Our target is the Value Area Low, as that is the next support level. Our trade met our target with a significant gain. So as you see the price action is going from one support level to the next and thats how we traded it. Over a $600 gain on one contract of the ES. So traders you see how you could use the volume profile indicator to trade each day and have the trades like these by trading one level to the next. Very easy to read and follow.
There are two Value areas that traders should pay attention to when trading with volume profile indicator. As the chart below shows you have the VAH or Value Area High which is the red line. And the VAL or Value Are Low which is the green line. Volume profile is such a powerful indicator as you can see the price action moves around the areas. The point of control is were the most volume traded, as the engulfing bar shows.
Volume Profile Point of Control in this trade in the ES sells off to the Value Area Low or the green line. Price moves up off that, and the yellow line is the POC line; this is an area where all institutional trading firms trade long above or short below the price level.
This entry would be made at the POC Line, with the target being the high red line of the Value Area.
The volume profile comes with manuals and videos to show you how to trade the price levels and have trades like these. These patterns repeat each day, and once you learn them, you will be in control of your trades and see the price move over these levels quickly. As the price moves around these major levels all day, you will be in more control of your trades, knowing where the major support and reversal areas are.
Here were trading the ES which is in down trending. Then the price moves below the VAL line and selling increases and lower we go.
Volume Profile and trading the ES price levels. Price losses support at the VAL or Value area line, and we go short on the weakness. Are target is just below the low of the day. Price sells off to our price targets for a nice gain on two contracts. Short the value area and target the price level of the low.
In the charts below the Volume Profile the price broke below the POC line and sold off in the ES and NQ charts below. You target is the next support level. Your target would be the VWAP line, and the price went right to it on both charts for an excellent trade. The lines on the left side of the chart are volume, and they can be turned on or off. This indicator works on all stocks, futures or indexes, and provides the major support levels throughout the day.
Using the Volume Profile, the price ran above the VAH line. Price then sells off to the POC line, which is the last line of support. Below the line, we get short with an ATM Strategy three contracts, and our first profit goal is just about hit, and we made a reasonable profit. Price continued to fall, and our targets were hit on Crude Oil.
This indicator is available for NinjaTrader 8, and the indicator can be used with any other bar type, but we prefer to use minute charts as they work best. Trading is all about support and resistance areas; this indicator has all the major levels.
This is a chart of the ES with the Volume Profile on it. At the open of the market, the price tried to move higher over the POC line but failed. So we sold short and our target was just below the VAL line, price sold off, and hit our targets on our two contracts for a significant gain.
Now, this indicator does not lag, moves with the price level so you can clearly see the setups and we end up with a successful winner. Institutions and major trading firms will be long the POC line, and short below it. Hence, learn how to trade with the professional traders and be on the right side of the markets each day trading the price level.
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Manuals, and or Videos on using the Software all available for instant download once purchased.
The indicators and manuals and or videos are all available to download after you purchase them. And they will be there should you need them.
The software and the manuals and or videos are all available to download instantly after purchase.
Yes, you will receive a PDF manual that explains on how to install the software and a video on how to install it.
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Only on the Ninjatrader 8 platform
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