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75: Comprehensive Guide to Volume Profiles and Volume in TradingWhat is a Volume Profile? A Volume Profile is an advanced charting tool that plots the amount of trading activity (volume) across different price levels over a specific period. Unlike traditional volume indicators that only show volume over time, Volume Profiles provide insights into where the majority of trading took place, highlighting key areas of support and resistance, as well as zones of high and low interest among traders. Key Components of Volume Profiles: 1. Point of Control (POC) : This is the price level where the highest volume of trades occurred. The POC is a crucial level because it represents the price at which traders found the most value, making it a strong indicator of support or resistance. 2. Value Area (VA) : The Value Area represents the range of prices where approximately 70% of the volume was traded. This area is divided into the Value Area High (VAH) and Value Area Low (VAL). The VA is significant because it identifies the zone where most market participants were active, providing a clear picture of market consensus on value. 3. High Volume Nodes (HVN) and Low Volume Nodes (LVN) : HVNs are price levels where there was a large amount of trading activity, indicating significant interest and often serving as strong support or resistance levels. LVNs, on the other hand, represent areas with minimal trading activity, where prices tend to move quickly due to the lack of interest. The Importance of Volume in Trading Volume is a fundamental aspect of market analysis, offering insights into the strength and sustainability of price movements. It reflects the level of participation in a market, indicating the intensity of buying or selling at different price levels. - Confirmation of Price Movements : High volume confirms the legitimacy of a price move. For example, a price breakout from a resistance level on high volume is more likely to be sustained than one on low volume. - Reversals and Continuations : Spikes in volume can signal potential reversals, especially when occurring at significant price levels such as the POC or near the VA boundaries. Conversely, a sustained high volume along a trend can indicate its continuation. - Validation of Support and Resistance : Volume at key levels like the POC, VAH, and VAL helps validate these areas as strong support or resistance. When price interacts with these levels on high volume, it suggests that many market participants are active, reinforcing the importance of these price levels. How to Interpret and Use Volume Profiles: 1. Identifying Key Price Levels : - The POC acts as a magnet for price, often drawing the price back to it when it moves away. This level is crucial for identifying potential areas of reversal or consolidation. - The Value Area is where the majority of the trading activity occurs. Prices above the VAH might indicate an overbought condition, while prices below the VAL could suggest an oversold market. 2. Volume and Market Sentiment : - High Volume Nodes indicate areas of significant interest, where prices tend to stabilize due to heavy trading. These areas often become zones of accumulation or distribution, depending on market conditions. - Low Volume Nodes indicate price levels with minimal trading interest, where prices may move quickly and encounter less resistance, often leading to rapid price changes or breakouts. 3. Order Flow and Large Volume Blocks : - Large blocks of volume, particularly at HVNs, suggest the presence of institutional traders or significant market participants placing large orders. These zones are critical because they reflect where big players are accumulating or distributing their positions. As a result, these areas tend to create strong support or resistance levels that can define future market behavior. 4. Dynamic vs. Static Profiles : - Volume Profile Visible Range (VPVR): This type of profile updates as you scroll through your chart, dynamically showing the volume distribution for the visible price range. It’s useful for analyzing the current market context and finding immediate trading opportunities. - Fixed Range Volume Profile (FRVP): This profile is static, showing volume data for a specified price range or time period. It’s valuable for comparing current price action to historical data, helping identify long-term support and resistance levels. Practical Tips for Using Volume Profiles : 1. Customization and Settings : - Adjust the number of rows or ticks per row in your Volume Profile settings to get a more detailed or broader view of volume distribution. More rows will give you finer detail, while fewer rows will smooth out the data, highlighting major trends. 2. Combining with Other Indicators : - Use Volume Profiles in conjunction with other technical indicators like moving averages, RSI, or MACD to confirm trading signals and enhance the reliability of your analysis. 3. Adapting to Different Timeframes : - Tailor your Volume Profile analysis to your trading style. For day traders, shorter timeframes (e.g., 5, 15, 30 minutes) might be more relevant, while swing traders or investors might focus on daily, weekly, or even monthly profiles to identify long-term trends and key levels. 4. Observing Market Reactions at Key Levels : - Pay close attention to how the market reacts when it approaches HVNs, LVNs, the POC, or the boundaries of the Value Area. These reactions can provide clues about future price movements and potential trading opportunities. Volume Profiles offer a deep and nuanced view of market behavior by highlighting where significant trading activity has occurred at different price levels. By understanding the interaction between volume and price, traders can make more informed decisions, identify key levels for entry and exit, and gain insights into market sentiment. Integrating Volume Profile analysis into your trading strategy can provide a significant edge, enhancing your ability to navigate the complexities of financial markets.
CME_MINI:ES1!Education
by seventyfiveinvest
Bitcoin 4hr Setup Bitcoin is currently experiencing a pullback, having dropped 2,000 pips over the past seven days. Several key factors are converging around the $60,000 level, making it a critical area of interest. These factors include the psychological round number of $60,000, previous market structure, the 0.5 Fibonacci retracement level, and the presence of both an upward and a downward trend line intersecting near this price. Additionally, there's a notable rejection point in this vicinity. Given these confluences, I anticipate a reaction around this level, potentially leading to further downward movement. Bitcoin Daily Chart Bitcoin is showing several confluences on the daily chart around the $60,000 level. After a 1,000-pip rally without any significant pullback, a retracement seems likely, as the price may need to dip before resuming its upward momentum. This time, I anticipate that Bitcoin might close below the 200-day moving average during the pullback. However, once it completes this downward move, I expect the price to eventually close above the 200-day moving average and begin a climb toward the top of the current channel.
BITSTAMP:BTCUSDShort
by ChartStrategist
NZD/JPY Daily Setup The NZD/JPY currency pair is currently experiencing a healthy pullback following a significant decline of 1600 pips over the past 26 days. My key area of interest is around the 89.950 level due to several converging factors. These include a rejection point at 89.948, an ascending trendline originating from August 2023, the 0.786 level on the daily Bearish Fibonacci retracement, the psychological round number of 89.950, a descending trendline that started in March 2024, and the overall market structure. Regarding the JPY Basket, it is also undergoing a pullback after advancing 38% over the last 25 days. I anticipate that the JPY Basket will react and potentially face rejection around the 6437 level.
Short
by ChartStrategist
GEHC 1H Long Swing Aggressive Trend TradeAggressive Trend Trade - short impulse + volumed T1 + support level + volumed 2Sp- + weak test + first bullish bar closed entry Calculated affordable stop limit 1 to 2 R/R take profit Daily Trend "+ long impulse + T2 level + 1/2 correction + support level + volumed 2Sp- - independent approach" Monthly trend "+ long impulse + SOS test level + 1/2 correction + support level + volumed 2Sp+ + weak test" GEHC @NASDAQ.NMS Sell Stop 79.68 LMT 81.40, GTC Sell Limit 84.76, GTC
NASDAQ:GEHCLong
by MishaSuvorov
NLMK Daytrade 5M Conservative CounterTrend TradeConservative CounterTrend Trade + long impulse + SOS level - strong approach + volumed 2Sp- + weak test? + first bullish bar closed entry Calculated affordable virtual stop limit 1 to 2 R/R take profit Hourly CounterTrend "- short impulse - unvolumed TE / T1 level + support level + biggest volume 2Sp-" Daily CounterTrend "- short impulse + volumed TE / T1 + support level + volumed manipulation" Monthly Trend "+ long impulse + T2 level + support level"
RUS:NLMKLong
by MishaSuvorov
NVIDIA updateRecently, test of finding a top turned out to be a success. However, after entering into an uptrend on lower timeframes, price had a sudden drop while it was nearing all-time highs. This puts in risk the first trade of the referenced idea at risk. The reason we get a sell signal is because: The recent raise in price action was not enough to overcome the downward movement of the correction. However, the 25 MA usually works as a key support-resistance. Therefore, it's currently being used as support, but if this support fails its likely price will return to the current lows where the 25 MA would most likely become resistance and would test price action before determining to create a new low or continue an uptrend. The best movement for technical uptrend health is a slight correction into current lows before forming a new uptrend. This movement will also be important for the SP:SPX as NASDAQ:NVDA holds a quite large share of the index at the moment. This could be the formations of the downtrend brought by the cyclicality of uptrends and downtrends. As it was mentioned in the referenced idea.
NASDAQ:NVDALong
by DarkMessiah777
4
NZD/JPY Daily setupThe NZD/JPY pair has fallen by 920 pips over the past 15 days. Such a significant and sustained decline is unlikely to continue indefinitely without a corrective pullback. Currently, the price has halted its downward momentum and is beginning to reverse near my key area of interest. Key Confluences: The pair is rebounding off a descending trend line that has been in place since November 2023. It is also bouncing off an ascending trend line that has been in place since August 2023. The price is reacting to the 0.786 Fibonacci retracement level. It is rejecting the significant psychological level of 90.000. Market Structure The JPY basket has reached a resistance level and is starting to decline. These factors suggest a potential reversal or correction in the NZD/JPY pair. NZD/JPY 4hr TF Has currently closed on the 4 hour TF nicely I expect NZD/JPY to start having an healthy pull back. JPY Basket weekly TF Is currently reacting off my area of interest I expect price to start moving lower. JPY Basket Daily TF JPY Basket 4hr TF
Long
by ChartStrategist
2
Gold 4hr setup Gold is presently experiencing a bearish trend, characterized by a pattern of lower highs and lower lows since peaking at 2484.14. I anticipate that gold will encounter resistance at the temporary rejection level before declining further. Subsequently, I expect it to rebound and ascend to my target area, which is approximately between 2400 and 2402.02. Confluences supporting this analysis include: A downward trendline indicating a continuation of the bearish trend. An upward trendline suggesting a potential reversal point. A rejection zone between 2400 and 2402.02, which is a significant area of interest. The round number of 2,400, often a psychological level in trading. The 0.618 Fibonacci retracement level Market structure. Expectations of the US Dollar strengthening. Gold Daily Dollar Index Silver
TVC:GOLDShort
by ChartStrategist
2
ETH-USDT 12HHello everyone, let's take a look at the ETH to USDT chart on the 12h time frame. As you can see, the price broke out of the falling triangle, which resulted in a strong downward price movement. Let's start by determining the support line, but here you can see how we are first in the support zone, but if we fall lower, the next support is at $2,823 and then we have strong support at $2,626. Looking the other way, we have visible resistance at $3,146, then strong resistance at $3,263, and then the price must overcome the strong resistance zone from $3,441 to $3,566.
by cryptodailyuk
US Dollar Index Daily TF DXY None Farm Payroll outcome from 13:30 today U.S PRIVATE NONFARM PAYROLLS (JUL) ACTUAL: 97K VS 136K PREVIOUS; EST 148K U.S PARTICIPATION RATE (JUL) ACTUAL: 62.7% VS 62.6% PREVIOUS U.S MANUFACTURING PAYROLLS (JUL) ACTUAL: 1K VS -8K PREVIOUS; EST -1K U.S AVERAGE WEEKLY HOURS (JUL) ACTUAL: 34.2 VS 34.3 PREVIOUS; EST 34.3 U.S GOVERNMENT PAYROLLS (JUL) ACTUAL: 17.0K VS 70.0K PREVIOUS looks like it is going to close below 104.018 The DXY has dropped 100 pips following the non-farm payroll results and is expected to close below 104.024, indicating a bearish trend. Consequently, EUR/USD, GBP/USD, and GOLD are likely to swing bullish. My area of interest is around 102.959, where I anticipate a rejection due to the presence of a -0.27 Fibonacci level and an order block. This should lead to a pullback before resuming the bearish trend to create new lower lows. Gold 4hr TF Gold is moving higher as a result of the non-farm payroll outcome. I expect this upward trend to continue until it hits my area of interest at 2,482, where I anticipate a rejection. After this pullback, I foresee gold resuming its upward movement to achieve a new all-time high (ATH).https://www.tradingview.com/x/tuk0BSO7/
TVC:DXYShort
by ChartStrategist
TSLA: Dangerous Price Action - Next Key Points to Watch.The daily chart displays a recent challenge at the main mid-term resistance level around $233.09, where the stock has struggled to maintain upward momentum, marking this as a significant resistance zone, which was a previous support level, another example of the Principle of Polarity in Technical Analaysis. This resistance, coupled with multiple rejections at this level, suggests a strong overhead supply that could cap further price advances in the short term. What's more, this resistance area is reinforced by the 21-day EMA. TSLA would have to break this key resistance as soon as possible to turn bullish again, otherwise, it'll seek its next support levels. A critical gap support observed at approximately $213.23 serves as the immediate fallback level. This area could be pivotal if the stock retreats further, as gaps often act as psychological markers for traders and may offer support or trigger accelerated selling if breached. On the weekly timeframe, support area around $205.30 (previous resistancce), supplemented by the 21-week EMA, provides a broader view of the stock's structural support. This confluence of support levels not only highlights a potential stabilization zone but also frames the downside risk if market conditions deteriorate. Tesla's stock movement near these key technical levels—resistance at $233.09 and support at $213.23 and $205.30—offers a clear narrative of a tug-of-war between bullish aspirations and bearish pressures. The interplay between these levels should be closely monitored, as a decisive breakout or breakdown could set the tone for the stock’s direction in the coming weeks. For more detailed technical analyses and insights like this, be sure to follow my account. Your support helps me continue providing valuable content to help you make informed trading decisions. Remember, real trading is reactive, not predictive, so let's stay focused on the key points described above and only trade when there is confirmation. “To anticipate the market is to gamble. To be patient and react only when the market gives the signal is to speculate.” — Jesse Lauriston Livermore All the best, Nathan.
NASDAQ:TSLA
by Nathan_The_Finance_Hydra
5