Volume Profile Indicator Guideline
Volume Profile or vpvr Indicator for MT4 is very useful volume-based indicator for stock and forex chart analysis in MT5 also. It enables traders to detect diverse price levels where significant price activity took place. With stocks and currencies, forex trading volume corresponds to the numeral of shares or units which have been exchanged over a specific timeframe. Volume holds a critical position in predicting market moves during a set forex trading session. Forex and stock traders rely heavily on volume as a fundamental principle in their trading decisions. Because trading in an increased volume circumstance is frequently associated with a price reversal in the FX exchange. Volume profile or vpvr indicator for Tradingview delivers stock traders with high, low, and point of control volume VPOC analysis.
What Is Volume Profile Indicator?
Vpvr Indicator pressure areas on the stock graph. To explain, the trading system resides in identifying key supporting and resistant grades based on volume analysis. This seeks to determine whether the share price is fair or not. More precisely, the vpvr indicator identifies whether the stock is in an overbought or oversold condition following the volume point of control VPOC price level which we will discuss later. Since every trading strategy aims to purchase stocks low and sell them high, the volume profile strategy will assist traders to buy shares at cheap prices and sell at inflated ones. Thus, the strategy of this volume profile indicator accumulates traded volumes for stock traders in order to provide them with potential assemblage and diffusion phases.
How we use VPVR in forex trading?
A volume Profile analysis with Vpvr visually represents the trading volume through a histogram overlay on Metatrader platforms. This advanced charting technique highlights how much volume occurred at every single forex price level over a specific time period. To clarify, the profile indicator for MT4 analyzes the traded volume as a measure of price interest to determine key stock and forex levels. Hence, reveals important price grades based on volume profile analysis. Significant grades stand for the point of control ( POC ) along with volume nodes (VN). The volume profile indicator for mt5 delivers forex and stock traders with value area, high volume nodes, low volume nodes, and a Volume Point Of Control VPOC.
Value Area VA
The Value Area ( VA ) is where 70 percent of the traded volume is located in the volume profile analysis. To explain, 70 % of the cumulative volume of FX transactions has occurred at price levels that constitute the value area. Note that this area is based on the normal distribution of the volume curve, where the major proportion of trades happens. By default, this proportion is equal to seventy percent. The following picture displays the value area using a volume profile visible range vpvr tool:
Volume Point Of Control VPOC
VPOC designates the volume point of control where most trading activity occurs. The volume profile indicator draws the VPOC area as a price level, where with the highest trading volume during the time period. Thus, the financial asset is likely to reverse near this area as traded volumes peak. Hence, the VPOC or POC level highlights supporting and resisting price areas in the FX market for forex traders.
The volume profile vpvr indicator for MT5 displays high and low volume nodes analysis on stock and forex charts.
High Volume Nodes HVN
The volume profile indicator for Tradingview displays high-volume nodes ( HVN ) analysis. These are price levels at which much trading activity happens. To explain, volume peaks around high volume nodes. Yet, the price consolidates for a considerable period of time. Often a great exchange activity balances between buyers and sellers at this price level. Wich keeps the exchange relatively stable for a prolonged period compared to other grades of the volume profile indicator. This suggests that the asset may have reached its fair value location on the forex chart. Hence, when the currency pair approaches a prior high volume node, traders predict a prolonged period of ranging move. In short, the forex pair will not break directly the HVN price level.
Low Volume Nodes LVN
The volume profile Tradingview indicator displays Low-volume nodes ( LVN ) analysis. These are price levels at which little trading activity occurs on both buying and selling sides. To clarify, the volume drops considerably around low volume nodes. Such price grades commonly suggest that the share price has reached an area of unfair value on the stock chart. So, the price is more likely to quickly quit this unfair location. Either it will break through the LVN grade or retrace from it immediately. In short, the price of the share generally moves faster when it attains a low volume node compared to other levels of the profile indicator. Because it is simply an unfair price area.
How do you use a Volume Profile indicator?
The majority of currency traders use the volume profile MT5 indicator to detect supporting and resisting grades on the Forex chart. Using Horizontal volumes will quickly guide you to discover the beginning of the assemblage phase. So that you enter the trade in the right place and accurate direction. The following USDCAD, H1 chart illustrates an aggressive price reversal around the red line indicating the Volume Point Of Control. This marks an assemblage phase where major orders come from the buy-side after a strong downside move.
Then the movement persisted to push in the new trend direction through the low volume nodes. To explain, the price increased during the low volume area as the indicator exhibited low volume grades of the volume profile on MetaTrader. Therefore, the volume profile is a forex tool that aids FX traders to recognize highly probable reverse areas. In short, the volume VPOC or POC point of control served as an excellent reversal area and confirmed to be a strong supporting grade in this case.
Also, traders use the MT4 volume profile indicator to analyze the trend. We clearly notice that the price often revisits VPOC or POC zones once they are marked on the chart. In fact, these areas serve as future reversal opportunities. Thus, as potential entry points once the market retests them. In fact, the price shooter up with the retest of the volume point of control price level on the same USDCAD, H1 graph. Moreover, we obviously remark that once the currency attains a high volume area it retraces back on this forex chart. To clarify, the trader may book profits at this location. Hence, high volume nodes can act as potential exit points from the foreign exchange.
Download Volume profile indicator for MT4
The MT4 volume profile indicator ( vpvr ) performs a horizontal volume analysis on the MetaTrader 4 platform. This forex indicator displays a green histogram that highlights the volume nodes of the profile that take the form of horizontal bars on the right side of the MT4 chart. To explain, there are elevated and subordinate volume nodes. Successive small green bars refer to a low volume trending area. Whereas large bars refer to a high volume reversal area. The indicator highlights where heavy price activity took place in the MT4 bar chart through a volume profile analysis.
Download Volume profile indicator for MT5
The volume profile vpvr indicator for MT5 displays an accumulation of the volume data on the MetaTrader 5 terminal as a colored histogram on the y-axis. Hence, this informative tool provides day, stock, and forex traders with a full summary of the traded volume. to explain, the volume profile analysis depicts the volume point of control, known as VPOC or simply POC, to provide foreign exchange traders with additional reversal areas in the FX market. In short, the MT5 volume profile is an excellent visible range indicator that offers trading opportunities around VPOC levels.
Download Volume profile indicator for Tradingview
The Volume Profile Fixed Range indicator is a VPFR indicator for Tradingview that brings the total trading volume over a specified time period for a specific time period and then splits it into either buy or sell volumes to make the volume profile information readily observable to the forex trader. The indicator displays the volume point of control ( VPOC ) in the profile to provide forex traders with key price grades on Tradingview charts.
The Volume Profile Analysis is an incredibly valuable volume tool for forex and stock traders. It is extremely easy to apply on trading charts to detect expansion and reduction in the purchasing and selling pressure between market players. The indicator displays horizontal volumes that constitute the volume profile visible range of the share or currency pair. In conclusion, these horizontal volume bars highlight major FX price levels where the price activity accumulates and may reverse as a consequence. You can get the volume profile tool for free download for your favorite trading platforms such as MetaTrader or Tradingview terminals. Also, the forex tool works with various financial instruments and multiple time periods.