What is Volume Profile Indicator

The Volume Profile indicator is a technical analysis tool used by traders to identify the levels of price that have significant trading activity based on the volume of trades. The Volume Profile chart shows the distribution of trading volume over a specific period of time, usually a day, week, or month.



3/15/20231 min read

Volume Profile Indicator

The Volume Profile indicator works by plotting a vertical histogram on the right-hand side of the chart, with the prices on the horizontal axis and the volume on the vertical axis. The bars on the histogram show the cumulative volume traded at each price level, with the highest volume levels represented by the tallest bars.

Traders use the Volume Profile to identify support and resistance levels and to determine the strength of those levels based on the volume traded at those levels. They can also use it to identify price areas with low volume, which can indicate areas of low liquidity and potentially be used as breakout levels.

Overall, the Volume Profile indicator can be a useful tool for traders who want to gain insights into the market's price and volume behavior and use that information to make more informed trading decisions.