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stockmarketanalysis · 1 year ago

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Complete Guide to Volume Profile: Master Market Depth Like a Pro

🔍 What is Volume Profile and Why It’s a Game-Changer for Traders?

Volume Profile isn’t just another indicator. It’s a market depth visualization tool that maps volume traded at each price level—giving you the inside view of where the real battles between bulls and bears are happening.

Unlike traditional volume bars at the bottom of charts, Volume Profile stacks volume on the price axis. It helps identify Value Areas (VA), Point of Control (POC), High Volume Nodes (HVNs), and Low Volume Nodes (LVNs).

📊 Example from Indian Markets: During the Nifty 50 rally in May 2024, Strike Money’s Volume Profile tool showed a strong HVN buildup near 22,200 levels. This became a springboard for the next breakout, catching early institutional positioning.

📚 Crack the Code: Volume Profile Key Terms You Must Know

🎯 Point of Control (POC) – The price with the highest traded volume. A magnet for price revisits. 🎯 Value Area (VA) – The 70% volume range around the POC. Think of it as the market's fair price. 🎯 HVN/LVN – Areas of heavy or low interest. HVNs attract; LVNs repel price.

👉 Understanding these terms gives traders a psychological edge, revealing where liquidity pools exist and how institutions defend positions.

🧠 Volume Profile vs Market Profile: What's the Difference?

Market Profile, developed by Peter Steidlmayer, is based on time at price. Volume Profile, in contrast, is all about volume at price.

📘 James Dalton, author of Mind Over Markets, explains this best: Volume Profile offers clarity on who controls the market—not just how long the price stayed somewhere.

💡 In Indian trading setups, many confuse the two. While Market Profile is useful for auction theory, Volume Profile is superior for spotting entry zones, especially for intraday traders on NSE stocks like Reliance, HDFC Bank, and TCS.

🛠️ Chart Like a Pro: Best Tools for Volume Profile in India

Platforms like Strike Money, TradingView offer dynamic volume profiling.

💻 Strike Money stands out for Indian markets. It integrates real-time NSE data, offers customizable Value Areas, and highlights volume imbalance zones—crucial for reacting to high-volatility moves in Bank Nifty or F&O segments.

🎯 Example: Traders using Strike Money caught the bullish absorption at 47,000 on Bank Nifty in April 2024, a move confirmed by a rising HVN cluster.

👁️ How to Read a Volume Profile Chart Without Confusion

Start by scanning the POC—this is where price is likely to revisit. Then check the Value Area—is price above or below it?

📉 If price breaks above VAH (Value Area High) on expanding volume, it often signals a momentum breakout. If it rejects VPOC (Virgin POC), you might be looking at a mean reversion setup.

⚡ Case in Point: In March 2025, Infosys showed a clear VAH breakout on Strike Money’s chart. Within hours, the stock jumped 4%, confirming institutional interest around the 1,400 zone.

🎯 High-Impact Volume Profile Strategies That Actually Work

📈 Value Area Breakout: Buy when price breaks VAH with volume support. 📈 POC Shift Strategy: A shifting POC upwards signals aggressive buyers. 📈 LVN Bounce: Price often rebounds from LVNs due to lack of liquidity.

🧪 Data-backed Insight: According to a 2023 study by NSE Academy, setups involving Volume Profile confluence with VWAP increased trade accuracy by over 17%.

📌 In April 2024, LTIMindtree created a strong LVN around ₹4,750. Traders saw a bounce and rallied to ₹5,200 within 3 sessions.

🌏 Adapting Volume Profile for Different Markets: Stocks, Futures & Crypto

📊 Futures (Nifty, Bank Nifty) – Volume Profile shines in the derivative space, especially with weekly expiry spikes. 📊 Equities – Works well on large-cap stocks like ICICI Bank, Reliance, and HUL. 📊 Crypto (on Indian platforms) – While real volume data can be opaque, VP can still track price reaction zones effectively.

📍 Example: On NSE Futures, a POC shift on Nifty from 22,150 to 22,300 in May 2024 signaled underlying strength—days before the breakout.

⚠️ Mistakes Traders Make With Volume Profile (That You Should Avoid)

🚫 Blindly trading POC retests – Not all POCs act as magnets. Check context and volume dynamics. 🚫 Ignoring timeframes – VP on a 5-min chart vs 1-hour chart tells different stories. 🚫 Forcing trades around LVNs – Just because there’s low volume doesn’t mean an automatic reversal.

👁️ Real World Example: A trader using Strike Money mistook an LVN at ₹2,150 on Axis Bank for a reversal, but price broke through due to news flow—highlighting the need for multi-factor confirmation.

🧠 Go Deeper: Combining Volume Profile with Order Flow and VWAP

For advanced traders, Volume Profile is just the beginning. Combine it with:

💹 VWAP – Confirms institutional average price. 💹 Order Flow – Reveals tape-reading clues like absorption or spoofing. 💹 Footprint Charts – Show exact bid/ask aggression at each price.

💡 In February 2025, combining VP + VWAP on HDFC Life highlighted a perfect confluence near ₹650. Institutions entered, and the stock rallied 7% in 3 sessions.

🧪 According to a 2024 Strike Money research note, the VWAP + VP combo had a 68% win rate in intraday setups across Nifty 100 stocks.

🔚 Master the Market’s Language: What Volume Profile Ultimately Teaches You

Volume Profile isn’t about lines or colors. It’s about understanding where the market is most engaged.

It tells you: ✔️ Where institutions are active ✔️ Where price is accepted or rejected ✔️ When momentum is drying up or just beginning

🚀 Platforms like Strike Money are making it easier for Indian traders to use institutional-grade tools with local market depth. If you haven’t explored Volume Profile yet—this is your signal.

📩 Ready to Upgrade Your Trading IQ? Start using Strike Money today and master Volume Profile with real-time, actionable insights across Indian markets.

#finance #investing stocks #stock trading #stock #stock market

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captainvtrenderus-blog · 6 years ago

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Auction :

The bid-ask method of the market is delineated as Associate in Nursing Auction Market Theory. the aim of Associate in Nursing auction is to facilitate trade. The auction ends up in the formation of the worth space that the patrons and also the sellers agree because the fairest value for the day. because the auction moves off from the worth space, patrons and sellers amendment their definition of import. If higher costs ar united within the auction, worth is meant to maneuver higher and consequently the market moves up. The market can auction as high because it must so as to search out sellers or as low because it must so as to encourage patrons to examine it as “relatively cheap”.

Buyers :

Individuals of any timeframe UN agency feel that this market is underpriced and thus less in worth. These people can move value up.

Buying Tail :

The failure of the auction at lower levels to draw in new sellers ends up in the patrons fleetly occupation forming what's known as a shopping for tail.

Close :

The final auction of the day Delta- Buyer/ merchant Delta:

Delta describes the amount of contracts bought at the provide minus sold at the bid. It merely measures the “aggressiveness” of patrons versus sellers. we have a tendency to use the term driven or aggressive patrons or sellers UN agency input market orders as opposition limit and ar in an exceedingly hurry to maneuver the market their approach.

Excess :

Excess marks the tip of 1 auction and also the starting of a replacement auction. it's visible at intervals the two-way auction method via shopping for and mercantilism tails. Excess happens all told timeframes; it completes Associate in Nursing auction

Gap :

Is another sort of excess. value moves chop-chop off from a previous commerce level or reference; a spot signifies a complete rearrangement in Market Profile commerce ways thinking. NOTE: In profile, we have a tendency to live a spot from the previous day’s high or low—not from the settlement price/ shut. a spot signifies a market that's out of balance and presents an outsized chance.

HVN- High Volume Nodes

This describes a variety of costs wherever there's a very high quantity of volume or bulge within the profile.The market likes to weekday here and can pay extended time. it's noted to be the most effective place to re-look at your commerce strategy,

The first hr of a commerce day ar known as the initial balance. because the name suggests, the IB tries to line up the day's balance or outline worth for the day. The IB is very important for the sort of receptive be monitored. See section on Opens below.

Control by the customer or merchant within the initial couple of minutes of the commerce day is named initiative activity.As the name suggests, the action determines conviction on the a part of the players to maneuver the market.The strength of the initiative activity is beneficial to see that party can have a job to play within the day

It is a method during which "old business" reverses earlier positions. Long liquidation may be a method that adjusts inventory that has gotten too long. It happens at intervals each timeframe; day timeframe long liquidation is also over quickly whereas longer timeframe long liquidation could last for for much longer periods of your time.

LVN- Low Volume Nodes

This describes a variety of costs wherever there's a very low quantity of volume or dip within the profile.

The first auction of the day.There ar varied styles of open:

OAOR- Open auction out of vary

OAIR- Open Auction In vary

OD- Open Drive

ORR- Open Rejection reverse

OTD- Open check drive

A trending sitauation wherever in worth is made in turn higher in an exceedinglyn uptrend or lower in a downtrend. only once framing is applicable to any or all timeframes, from a monthly chart to the shortest time-frame Recognizing a one-time framing mode will keep a merchandiser from weakening a market good futures at untimely times whereas additionally sanctioning a merchandiser to use the foremost applicable strategic and military science arrange for the present market conditions.

Auctions, at intervals the market’s natural two-way auction method, finish in one amongst 2 ways: 1) most ordinarily the auction ends through a additional aggressive counter auction that makes a shopping for or mercantilism tail; or 2) The auction ends through straightforward exhaustion.We confer with the exhaustion as poor high/ low.the poor high/ low may be a temporary halt within the in progress auction. what's noticeable is that the lack of opposite auction in such cases and thence the initial auction contains a higher risk of restarting.

These area unit points in time that hold data.That data could merely be out there for terribly short periods of your time or for terribly extended periods. Larger reference levels area unit of nice importance to the long run player.Successful mercantilism is concerning managing modification and taking advantage of it.

Applicable to trend days and could be a late afternoon worth migration against the prevailing trend. throughout a trend day there's typically one afternoon inventory adjustment; the pullback high or low is that the extreme of this inventory adjustment. On the subsequent day the pullback high or low is employed to work out if there has been any significant modification relative to the previous day; if the pullback high or low isn't desecrated, there has been no significant modification within the other way of the previous day’s trend.

The market profile acknowledges 5 distinct forms of people World Health Organization operate within the markets. These area unit a) plunger, b) Day merchandiser, c) Short term player, d) Intermediate term player, e) long run player. every of those people have a perception that they bring about to the market and this perception helps move the markets. The plunger and therefore the day merchandiser area unit chargeable for maintaining the liquidity of the markets.

This describes all participants with a timeframe that's bigger than the one you're in. Major trending or vertical moves area unit completed by larger participants World Health Organization area unit employing a bigger timeframe than the one you're staring at. once the OTF participates, it typically takes several costs associated plenty of volume transacted to finish an order. Funds, swing investors, governments and monetary establishments normally area unit in operation at the OTF level. they're recognized once we move from “horizontal development” to “vertical development”. they're additionally recognized exploitation the gap swing, initial balance and alternative indications.

This is a response to Initiative activity, the strength of which may confirm changes to the trend of the timeframe.

The movement far from the initial balance is named the vary extension.Success or failure of the vary extension offers United States of America a sign of the kind of day flowering.

The perception that all of the on top of mentioned players waken the markets when the bid-ask method helps build what we tend to decision "value". price is completely different for every of the mentioned players and that they can move worth up or down reckoning on this perception. for instance if the intermediate term vender thinks that the market is expensive he can jump in to maneuver worth down.On a daily timeframe, the amount wherever seventy you look after the amount action takes place is outlined because the price space.Similarly we've got a weekly and a monthly price space.

The Point of management in Market Profile terms stands for the foremost normally listed worth nearest to the middle of the vary. this is often the value wherever the foremost activity occurred throughout the day ; it's thus the value thought of to be the fairest throughout any mercantilism day.The migration of the fairest worth at that business is being conducted is of nice importance in observance longer timeframe activity (greater than day timeframe) in any single day.

Same role as expained on top of for patrons except they assume that the market is expensive and can move worth down.

The failure of the auction at higher levels to draw in new patrons ends up in the sellers fleetly occupancy forming what's referred to as a mercantilism tail. The mercantilism tail could be a failing upwards auction.The bigger variety of single TPOs that type the mercantilism tail the additional aggressive the sellers’ reaction.

The basic building blocks of the Market Profile® area unit referred to as Time worth Opportunities, or TPOs. every [*fr1] hour of the mercantilism day is selected by a letter. once a precise worth is listed throughout a given [*fr1] hour amount, the corresponding letter or TPO is recorded next to the value.

Short Covering :

Opposite activity of the Long Liquidation. what is vital to grasp here is that it's once more "old Business" that is covering.These become violent and deceptive if you don’t perceive the distinction between previous and new business.

Hope you are like this article. If you are any queries then please comment below.

#order flow trading strategies #nifty futures

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ocbusinessreviewguide · 8 years ago

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Day Trading Altcoins | Volume Profile – Video Review - OC Business Review Guide

Day Trading Altcoins | Volume Profile

Two strategies to daytrade altcoins using a Volume Profile + how to screen for altcoins using technical analysis. The strategies include high volume price points and low volume price points + analyzing the buy/sell distribution per volume node. (Link for site :https://bitscreener.com/screener/chartview?timeframe=1d)

Timeframes: How to screen for potential coins: 1:56 Day Trading with Volume Profile: 3:07 Strategy 1 – HVN vs LVN: 4:37 Strategy 2 – Buy/Sell Distribution: 10:05

Suggest a video on Patreon: https://www.patreon.com/BitcoinTradingChallenge

Site used: https://bitscreener.com/screener/chartview?timeframe=1d

The Platform I use to Trade – https://exchange.gemini.com/

The Website I use for Analysis – https://cryptowat.ch/gemini/btcusd

My Discord Chat: https://discord.gg/MSrNkbg

See The Video On Youtube: https://youtu.be/nxeFCCa3cPA

from OC Business Review Guide https://ocbusinessreviewguide.wordpress.com/2017/12/05/day-trading-altcoins-volume-profile-video-review/

#Day Trading Altcoins | Volume Profile – Video Review

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sharemarketcources · 2 months ago

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Volume Profile Trading | Identify Key Price Levels with Precision

Volume Profile is a powerful market analysis tool that displays the amount of trading activity at specific price levels over a defined time period. Unlike traditional indicators that focus on time-based data, Volume Profile helps traders visualize where the most buying and selling has occurred, allowing them to identify high-volume nodes (HVNs), low-volume nodes (LVNs), value areas, and the point of control (POC).

By integrating Volume Profile into your trading strategy, you gain a strategic advantage that helps reduce noise, increase confidence, and improve decision-making. Whether you're a day trader, swing trader, or position trader, mastering Volume Profile can take your market analysis to the next level.

#Volume Profile

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captainvtrenderus-blog · 7 years ago

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Market Profile Glossary

Auction :

The bid-ask process of the market is described as an Auction Market Theory. The purpose of an auction is to facilitate trade. The auction results in the formation of the value area which the buyers and the sellers agree as the fairest price for the day. As the auction moves away from the value area, buyers and sellers change their definition of value. If higher prices are agreed in the auction, value is supposed to move higher and consequently the market moves up. The market will auction as high as it needs to in order to find sellers or as low as it needs to in order to motivate buyers to see it as “relatively cheap”.

Buyers :

Individuals of any timeframe who feel that the present market is underpriced and therefore less in value. These individuals will move price up.

Buying Tail :

The failure of the auction at lower levels to attract new sellers results in the buyers swiftly moving in forming what is called a buying tail.

Close :

The final auction of the day

Delta- Buyer/ seller Delta:

Delta describes the quantity of contracts bought at the offer minus sold at the bid. It simply measures the “aggressiveness” of buyers versus sellers. We use the term motivated or aggressive buyers or sellers who input market orders as opposed to limit and are in a hurry to move the market their way.

Excess :

Excess marks the end of one auction and the beginning of a new auction. It is visible within the two-way auction process via buying and selling tails. Excess occurs in all timeframes; it completes an auction

Gap :

Is another form of excess. Price moves rapidly away from a prior trading level or reference; a gap signifies a total reordering in Market Profile trading strategies thinking. NOTE: In profile, we measure a gap from the previous day’s high or low—not from the settlement price/ close. A gap signifies a market that is out of balance and presents a large opportunity.

HVN- High Volume Nodes

This describes a range of prices where there is a particularly high amount of volume or bulge in the profile.The market likes to sat here and will spend considerable time. It is noted to be the best place to re-look at your trading strategy,

Initial balance :

The first 60 Minutes of a trading day are called the initial balance. As the name suggests, the IB tries to set up the day's balance or define value for the day. The IB is important for the type of open to be monitored. See section on Opens below.

Initiative activity :

Control by the buyer or seller in the first few minutes of the trading day is called initiative activity.As the name suggests, the action determines conviction on the part of the players to move the market.The strength of the initiative activity is useful to determine which party will have a role to play in the day

Long Liquidation :

It is a process in which "old business" reverses earlier positions. Long liquidation is a process that adjusts inventory that has gotten too long. It occurs within every timeframe; day timeframe long liquidation may be over quickly while longer timeframe long liquidation may last for much longer periods of time.

LVN- Low Volume Nodes

This describes a range of prices where there is a particularly low amount of volume or dip in the profile.

Open :

The first auction of the day.There are various types of open:

OAOR- Open auction out of Range

OAIR- Open Auction In Range

OD- Open Drive

ORR- Open Rejection reverse

OTD- Open test drive

One time framing :

A trending sitauation where in value is built successively higher in an uptrend or lower in a downtrend. One time framing is applicable to all timeframes, from a monthly chart to the shortest time frame Recognizing a one-time framing mode can keep a trader from fading a market Nifty futures at inopportune times while also enabling a trader to employ the most appropriate strategic and tactical plan for the current market conditions.

Poor Highs/ Lows :

Auctions, within the market’s natural two-way auction process, end in one of two ways: 1) Most commonly the auction ends through a more aggressive counter auction that creates a buying or selling tail; or 2) The auction ends through simple exhaustion.We refer to the exhaustion as poor high/ low.the poor high/ low is a temporary halt in the ongoing auction. What is noticeable is the lack of opposite auction in such cases and hence the original auction has a higher possibility of restarting.

Reference levels :

These are points in time which hold information.That information may simply be available for very short periods of time or for extremely extended periods. Larger reference levels are of great importance to the long term player.Successful trading is about managing change and taking advantage of it.

Pullback low/Rally high :

Applicable to trend days and is a late afternoon price migration against the prevailing trend. During a trend day there is usually one afternoon inventory adjustment; the pullback high or low is the extreme of this inventory adjustment. On the following day the pullback high or low is used to determine if there has been any meaningful change relative to the previous day; if the pullback high or low is not violated, there has been no meaningful change in the opposite direction of the prior day’s trend.

Timeframes :

The market profile recognizes five distinct types of individuals who operate in the markets. These are a) Scalper, b) Day trader, c) Short term player, d) Intermediate term player, e) Long term player. Each of these individuals have a perception which they bring to the market and this perception helps move the markets. The scalper and the day trader are responsible for maintaining the liquidity of the markets.

OTF ( Other Time Frame ):

This describes all participants with a time frame that is greater than the one you are in. Major trending or vertical moves are completed by larger participants who are using a greater time frame than the one you are looking at. When the OTF participates, it generally takes many prices and a lot of volume transacted to complete an order. Funds, swing investors, governments and financial institutions in general are operating at the OTF level. They are recognized when we move from “horizontal development” to “vertical development”. They are also recognized using the opening swing, initial balance and other indications.

Responsive activity :

This is a response to Initiative activity, the strength of which can determine changes to the trend of the timeframe.

Range extension :

The movement away from the initial balance is called the range extension.Success or failure of the range extension gives us an indication of the type of day unfolding.

Value :

The perception which all of the above mentioned players bring to the markets after the bid-ask process helps build what we call "value". Value is different for each of the mentioned players and they will move price up or down depending on this perception. For example if the intermediate term seller thinks that the market is overpriced he will jump in to move price down.On a daily time frame, the period where 70 % of the volume action takes place is defined as the value area.Similarly we have a weekly and a monthly value area.

Point of Control Volume ( POCv) :

The Point of Control in Market Profile terms stands for the most commonly traded price closest to the center of the range. This is the price where the most activity occurred during the day ; it is therefore the price considered to be the fairest during any trading day.The migration of the fairest price at which business is being conducted is of great importance in monitoring longer timeframe activity (greater than day timeframe) in any single day.

Sellers :

Same role as expained above for Buyers except they think that the market is overpriced and will move price down.

Selling tail :

The failure of the auction at higher levels to attract new buyers results in the sellers swiftly moving in forming what is called a selling tail. The selling tail is a failed upwards auction.The greater number of single TPOs that form the selling tail the more aggressive the sellers’ reaction.

TPO's :

The basic building blocks of the Market Profile® are called Time Price Opportunities, or TPOs. Each half hour of the trading day is designated by a letter. When a certain price is traded during a given half hour period, the corresponding letter or TPO is recorded next to the price.

Short Covering :

Opposite activity of the Long Liquidation. What's important to understand here is that it is again "old Business" which is covering.These become violent and misleading if you don’t understand the difference between old and new business.

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