Volume Profile (Top 3 Reasons To Use Value Area Trading)
Top 3 Reasons To Use Value Area Trading (on Volume Profile)
1) Plots on a vertical scale and gives you a specific price level where the most volume has occurred.
2) You gain far more information about price levels and volume.
3) Most importantly: Makes it easier to sport institutional support and resistance levels.
Why is it important to know where 70% of trading volume? Because retailer traders need to know where large institutional or big banks are buying and selling and need to trade with them, not against them.
POC or point of control is the LINE on chart is the largest volume by institutional traders- on the chart. Largest horizontal line.
*IF price action is above point of control- then trade bullish or buy
*IF price action is below point of control- then trade bearish or sell
You can see thin volume outside of the value area, where price action moves quickly thru areas into value areas.
You can use last couple or few days to find volume profiles or value areas to determine where price action might go too.
1) Plots on a vertical scale and gives you a specific price level where the most volume has occurred.
2) You gain far more information about price levels and volume.
3) Most importantly: Makes it easier to sport institutional support and resistance levels.
Why is it important to know where 70% of trading volume? Because retailer traders need to know where large institutional or big banks are buying and selling and need to trade with them, not against them.
POC or point of control is the LINE on chart is the largest volume by institutional traders- on the chart. Largest horizontal line.
*IF price action is above point of control- then trade bullish or buy
*IF price action is below point of control- then trade bearish or sell
You can see thin volume outside of the value area, where price action moves quickly thru areas into value areas.
You can use last couple or few days to find volume profiles or value areas to determine where price action might go too.