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📊How to use HORIZONTAL VOLUMES? Tutorial with examples!
Updated
Horizontal Volume Indicator or Volume Profile is a simple indicator that helps to identify: value areas (support or resistance zones) and liquidity gaps. In this idea I will explain how to use the indicator and mark these areas to make trades and why it works.
Let's start at the beginning.
💹What are value areas (support and resistance zones)?
🔶The value zone is the price range at which the most trades are made. On the chart we can mark the value zones: 33600-41000, 46000-49500, 54600-58200. I also marked how these zones were support or resistance to price. The value zone becomes a support for price if the price, when it is tested, does not continue its downward movement. A value zone becomes a resistance if price does not continue to rise above that zone. The zone simply doesn't let the price go higher because there aren't enough buyers.
🔶Liquidity gaps are called that way because no trades were made in that zone and there is no liquidity for traders (buyers or sellers), and price, as we know, goes from liquidity to liquidity (from one zone to another). On the chart I have marked for you the liquidity gaps and we can see that the price can' t stay in these zones for a long time.
✅Why do horizontal volumes work? Price reacts to these zones for a simple reason. Many traders pay attention to these areas and put their limit orders to buy or sell or when the area is tested, so the price moves up or down. If there are more sellers than buyers, the price will go lower and lower; if there are more buyers, the price goes higher and higher.
🚩How can I add this indicator to my chart?
3 steps to add the indicator to your chart:
1. open "prediction and measurement tools" at the left part of chart
2. choose the "Fixed Range Volume Profile"
3. choose the price range from some date till another date. I chose from Dec 10, 2021 till May 6, 2022.
So now you can see and mark all areas on your chart.
🏁This indicator helps to identify areas and can suggest stop points or price reversal, but it should be used with different methods. If the market is in a strong rising trend (UPTREND), it is unlikely to be stopped by a local zone of value, but a global zone may stop it. Also, the support zones can be good entry point. Be more tricky than the market and use different tools. You can use the indicator on different timeframes for scalping or swing trading and with different ALTCOINS. Also, pay attention to the volume indicator, trend lines and key levels that I show in my ideas.
💻Please write in the comments if you still have questions about Horizontal volumes! I`ll try to explain you additional tips 🎇
Press the "like"👍 button, write comments and share with your friends - it will be the best THANK YOU.
P.S. Personally, I open an entry if the price shows it according to my strategy.
Always do your analysis before making a trade.
Let's start at the beginning.
💹What are value areas (support and resistance zones)?
🔶The value zone is the price range at which the most trades are made. On the chart we can mark the value zones: 33600-41000, 46000-49500, 54600-58200. I also marked how these zones were support or resistance to price. The value zone becomes a support for price if the price, when it is tested, does not continue its downward movement. A value zone becomes a resistance if price does not continue to rise above that zone. The zone simply doesn't let the price go higher because there aren't enough buyers.
🔶Liquidity gaps are called that way because no trades were made in that zone and there is no liquidity for traders (buyers or sellers), and price, as we know, goes from liquidity to liquidity (from one zone to another). On the chart I have marked for you the liquidity gaps and we can see that the price can' t stay in these zones for a long time.
✅Why do horizontal volumes work? Price reacts to these zones for a simple reason. Many traders pay attention to these areas and put their limit orders to buy or sell or when the area is tested, so the price moves up or down. If there are more sellers than buyers, the price will go lower and lower; if there are more buyers, the price goes higher and higher.
🚩How can I add this indicator to my chart?
3 steps to add the indicator to your chart:
1. open "prediction and measurement tools" at the left part of chart
2. choose the "Fixed Range Volume Profile"
3. choose the price range from some date till another date. I chose from Dec 10, 2021 till May 6, 2022.
So now you can see and mark all areas on your chart.
🏁This indicator helps to identify areas and can suggest stop points or price reversal, but it should be used with different methods. If the market is in a strong rising trend (UPTREND), it is unlikely to be stopped by a local zone of value, but a global zone may stop it. Also, the support zones can be good entry point. Be more tricky than the market and use different tools. You can use the indicator on different timeframes for scalping or swing trading and with different ALTCOINS. Also, pay attention to the volume indicator, trend lines and key levels that I show in my ideas.
💻Please write in the comments if you still have questions about Horizontal volumes! I`ll try to explain you additional tips 🎇
Press the "like"👍 button, write comments and share with your friends - it will be the best THANK YOU.
P.S. Personally, I open an entry if the price shows it according to my strategy.
Always do your analysis before making a trade.
Note
Hi friends! Also you can check my education idea about DCA trading strategy! This strategy helps you to buy crypto during the biggest crypto dumps😉
Note
Friends, i made an additional education idea about How to use Volume indicator to identify the BOTTOM! I hope it will be very useful in current market conditions.
Note
Hi friends! I made the idea about the next Black Swan that may heppen soon. If it heppen to one UST is it heppen to another stablecoins? Maybe all stablecoins are in danger? I hope it will be very useful in current market conditions.
Trade active
🔥Hi friends! I continue to explain how to use Horizontal Volume Indicator or Volume Profile in advanced way.✅In this idea I give you a practice recommendation how to use the point of control (POC) and increase your profitability with this simple tool on a regular basis.
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