Secret Volume Trading Strategy VRPR | How To Trade Volume Profile

Summary

This video introduces the volume profile, a versatile trading tool that allows traders to analyze volume at specific price levels over time. Unlike traditional volume indicators, the volume profile displays volume distribution vertically on charts, highlighting areas of high trading activity known as high volume nodes. Key concepts include the value area, point of control, and various profile tools like the anchored and fixed range volume profiles. The video emphasizes the importance of combining these insights with other technical analysis methods to enhance trading strategies and make informed entry and exit decisions.

Takeaways

• 📈 The volume profile is a versatile trading tool that helps traders identify precise entry and exit points.
• 📊 Unlike traditional volume indicators, the volume profile displays volume distribution vertically on the price chart, allowing for better analysis of price levels.
• ⚖️ High volume nodes indicate significant buying or selling interest, while low volume nodes show less interest, helping traders anticipate market reactions.
• 📍 The value area, consisting of the value area high, value area low, and point of control (POC), represents the range where a specified percentage of volume is traded.
• 🎯 The point of control is the price level where the highest volume was traded, highlighting significant levels of interest among traders.
• 🔗 Combining volume profile tools with other indicators, such as support and resistance levels or Fibonacci retracements, enhances trade accuracy.
• 🖱️ The anchored volume profile allows traders to analyze volume from a specific starting point, offering insights into past and future price action.
• ⏳ The fixed range volume profile enables traders to analyze historical data without including current market prices, helping identify enduring levels of support and resistance.
• 📅 The session volume profile, available through a paid subscription, marks out volume profiles for previous trading sessions, aiding day traders in finding quick trading opportunities.
• 🔍 Always look for confluence when using volume profile tools, as multiple signals can provide stronger confirmation for trades.

Q & A

What is the volume profile in trading?

The volume profile is a tool that displays the volume traded at each price level over a specified time frame, allowing traders to analyze where significant buying and selling interest occurs.

How does the volume profile differ from traditional volume indicators?

Unlike traditional volume indicators that show volume over a fixed period, the volume profile displays volume distribution vertically on the price chart, providing a more detailed view of trading activity at specific price levels.

What is the significance of high volume nodes in the volume profile?

High volume nodes indicate price levels where there was significant trading interest. When price revisits these levels, traders can expect a reaction, presenting opportunities to enter or exit trades.

What is the value area in the volume profile?

The value area is the range of price levels in which a specified percentage (typically 70%) of all volume was traded during a specific period. It consists of three key levels: value area high, value area low, and the point of control.

What is the point of control in the volume profile?

The point of control is the price level where the highest volume was traded, representing the most significant level of interest for traders. It indicates where buying and selling activity was most active.

What is the purpose of the anchored volume profile?

The anchored volume profile allows traders to analyze volume from a specific starting point, providing insights into trading activity from that moment until the current market price and into future price action.

How does the fixed range volume profile differ from the anchored volume profile?

The fixed range volume profile allows traders to analyze historical price data without including current market price action, enabling them to identify old points of control that may still act as strong levels in the present.

What is the session volume profile indicator?

The session volume profile indicator automatically marks out volume profiles from previous trading sessions, helping day traders identify potential support and resistance levels. It requires a paid subscription on TradingView.

Why is it advisable to exclude the current day's session volume when trading?

Excluding the current day's session volume is recommended because it is constantly changing in real time, which can lead to fake signals or inaccuracies in analysis.

How can traders use the volume profile in conjunction with other tools?

Traders should combine the volume profile with other tools like support and resistance levels or Fibonacci retracements. When volume profile levels align with traditional horizontal support or resistance, the confidence in trade setups increases.