Original subtitles

Now that we've covered some theory, let's

get into the actual volume profile itself.

Now this is the crux of our entire trading

strategy and our approach to the markets

in the Volpro core program. And this is

where you'll dive into the technical

aspects of how to use the volume profile.

In this module more specifically, how to

actually read and use the volume profile

first. So the specific volume profile that

we use in TradingView is the one we showed

you during the setup module. And that is

what's called the fixed range volume

profile or the FRVP. This is the only

profile we use to read and measure

everything. So the FRVP begins and ends at

user defined points in time. So we draw

the range in which we want to read volume.

We don't have a volume profile that just

constantly changes depending on what time

frame you're looking at. No, we are

specifically drawing these volume profiles

across very specific ranges. So we'll use

it to find previous session levels and the

zones of interest which will extend out

into our current sessions. But we will

also use it to watch developing volume in

real time during our chosen trading

session. So there's two ways in which we

use this profile. The first is to look at

past data and the second is to look at

developing data. So if we go over to

TradingView now and I'll show you the two

ways in which we will be drawing the

volume profile. And there are two main

ways in which we use a volume profile. One

is to analyze previous data and one is to

analyze developing data. So if we're going

to analyze previous data that's already

occurred, not real time data, then you'll

use that same tool, fixed range volume

profile. And don't worry about the time

I'm drawing this across right now. We'll

cover this in more detail in the next

module. But say I want to analyze the

previous New York session data. We go from

9.30 a.m. on the open through to 4 p.m.,

which is the close New York time. That

places the volume profile on the chart

with the New York levels of interest. Good

to go. Now that's past data. That is a

completed auction. Now if you want to

analyze developing data, real time volume

like we talked about in the introductory

lesson, how the volume profile is not a

lagging indicator because we can see

volume as it develops in real time. Here's

how we do it. So we click that same tool

and see how it's currently just after 11 p

.m. Eastern time on a Tuesday. So it's

currently an Asian trading session right

now. So if we want to see this volume in

real time, using the same volume profile

tool, we'll start that profile from 6 p.m.

Don't worry about the times too much now.

We'll get into this more soon. But from 6

p.m. through to current time, and the only

difference here is we'll double-click the

volume profile, and we'll click the extend

right checkbox. And what that will do is

in real time, the volume profile will

follow current price and also show us in

the profile as volume is developing.

You'll see this part of the profile update

in real time. So all I need you to

understand right now, for analyzing

developing volume in real time during your

trading session, you're going to have the

volume profile click extend right. For

analyzing past volume, you're going to

have that unchecked. So the next module

will cover exactly when to draw these

profiles. But for now, as long as you

understand the two functions of the volume

profile, that is all that matters right

now. Let's go back to the slides and talk

about the components that make up a volume

profile and how to read a volume profile.

So a volume profile shows us how much

volume was traded at each price level

during our chosen time period. If you

remember from our previous auction market

theory lesson, we talked about the volume

profile showing the different

transactions, the interest at specific

price levels between buyers and sellers.

So the volume profile reveals where buyers

and sellers interacted most, which we call

our high volume prices, and where they

interacted least, which are the low volume

prices. And this volume profile displays

the distribution of trading activity

across price instead of across time. We

are only interested in volume at price,

not volume at time. And what this volume

profile helps us to do is helps us to

identify areas of fair value in the

market. So if you look at this profile

here on the right, the bumps here in the

profile are simply showing us where the

highest interest areas or highest interest

prices were. For example, you look at the

lows down here. There's a lot of interest

from both buyers and sellers at these lows

across this price range from $6,470 to $6

,475 roughly. And then again up here and

again up here. And you can just see the

distribution, the clusters of high volume

at each price point, each price range. So

the first thing you need to understand in

a volume profile are high volume nodes or

refer to them as HVNs. So a high volume

node is a price level with above average

traded volume on the volume profile. You

can see on the diagram on the right here,

we've highlighted some of the most major

high volume nodes in the profile in green.

And what these represent are areas of high

market interest where buyers and sellers

agreed on value, where there was a lot of

transactions occurring at these levels.

What the high volume nodes indicate are

price acceptance. The market spent more

time and transacted more at these levels.

There was a lot more interest from market

participants on both sides at these price

points. High volume nodes tend to slow

price movement due to the heavy trading

activity and high liquidity, often acting

as strong support or resistance zones. Now

price tends to gravitate back towards high

volume nodes after moving away from them

as they have a sort of magnetic effect,

making them particularly useful for breaks

and retests, which we'll get into in more

detail later on in the course. Now the

opposite to a high volume node is a low

volume node or an LVN. Low volume nodes

are the total opposite. So these are price

levels with below average traded volume on

the volume profile. So on the right here

you can see highlighted in green, got the

areas where there is significantly less

volume compared to the rest of the

profile. What this represents are areas of

low market interest where buyers and

sellers disagreed on value. These areas

indicate price rejection as the market

spent minimal time and transacted far less

at these price points compared to high

volume nodes. As price approaches low

volume nodes, low volume nodes tend to

accelerate price movement, creating strong

trends or gaps in market structure. Price

often avoids staying in low volume nodes

for long, moving through them efficiently.

So a low volume node, because it lacks

liquidity and lacks participation from

either side of the market, price tends to

move through these areas very quickly or

avoids moving to them altogether. The next

thing to understand on a volume profile is

the point of control or POC. So in the

diagram on the right here, the point of

control here is indicated by the red line.

Now the point of control is the single

price point with the highest traded volume

in the profile period. This represents the

price where both buyers and sellers agreed

the most during a specific session or

period. This is what's considered the

market's most accepted price, aka fair

value. Now the POC will often act as a

strong magnet for price. The market tends

to revisit this level often and it can

serve as both support and resistance

depending on price location. And if you

notice a shift in POC over time or you see

that the POC is trending up or trending

down, this can indicate changing market

sentiment or trend direction, giving us

clues as to where the market will most

likely head to next. The next thing to

read on a volume profile is the value area

high or VAH. Now if we look at the diagram

on the right here, you'll notice that

there's a blue line on the upper end

before the volume profile kind of fades

out and that is our value area high. This

is the upper boundary of the main 70% of

all traded volume for our chosen period.

So this highlighted period on either side

of point of control and in between the two

blue lines is the top 70% of traded volume

and the value area high simply marks the

highest price where trading was still

considered within the fair value zone by

the market. The value area high will often

act as resistance when price approaches

from below and a break and a hold above

value area high can signal potential

bullish continuation whereas rejections

from the value area high often lead to

pullbacks back into the value area towards

point of control. The value area low is

the total opposite. It's the lower

boundary of the value area on the volume

profile. So there's a lower blue line.

This marks the lowest price we're trading

was still considered within fair value and

it often acts as support when price

approaches from above. A break and hold

below value area low can signal potential

bearish continuation whereas rejections

from value area low often lead to bounces

back into the value area and towards point

of control. So together these are the

components that make up the volume

profile. These are the main components we

analyze together to form our trade ideas

and to form our context around market

conditions. So make sure you are 100%

familiar with what these mean before

proceeding. That is your high volume and

low volume nodes, your point of control,

your value area high, value area low. We

will be referencing these levels to form

our trade setups and our trade ideas

moving forward. So very, very important

you understand the terminology, understand

what they mean and understand how to read

the volume profile. These levels and how

price reacts to them also helps us to form

our story and build context around what

price is likely to do next. So make sure

you understand each component on the

volume profile before you proceed to the

next lesson. Once you're ready, go ahead

and complete this lesson. And now we'll

move on to your daily charting process.

What your routine will look like using

volume profile on a day-to-day basis.