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of the profile. It represents bout 70 percent of all the volume in the profile. Point of Control (POC) is the highest volume bar in the profile. This is where the market has discovered the most value. Price tends to gravitate towards the POC. The High and Low Extremes are the very top and bottom of the profile.
Jan 24, 2024 · A market profile combines price, time, and volume to create a chart that shows how long the market traded at specific price levels. The Volume Profile indicator, on the other hand, focuses solely on the volume of trades at different price levels. Market Profile gives a macro view of market dynamics, whereas Volume Profile provides a micro ...
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What is a volume profile in the stock market?
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What is a volume profile?
Sep 2, 2023 · What is a Volume Profile. In the stock market, a volume profile is a graphical representation of the traded volume at various price levels over a predetermined time period. It gives traders information about areas where there has been a lot of trading activity, which aids in identifying important resistance as well as support levels.
- Single P rice Level Distortions
- End of Day Total V olume versus Ongoing V olume throughout the Day
- A nomalies
- Too F ocused on V olume
- Conclusion
It is not uncommon to witness much higher volume at or around a single price level. For example, the previous day’s high or low, or the overnight high or low, is likely to attract above-average trade. Additional examples include the opening and the halfback. When viewed on an absolute-volume basis, these levels may appear to be far more important t...
Markets often develop a direction, or tone, for a single day. This direction may not be confirmed by volume, however, even while the auction continues until the close. In many instances, the movement is corrected the following day due to lack of volume. In other words, there is often a delay in the effect that such a low-volume move may have on a m...
An anomaly is a single price or price level that lacks symmetry, which creates an unusual shape in the Market Profile. Anomalies represent structural weakness, and they’re created through a combination of time and price—and therefore may not show up on volume profiles. In fact, volume profiles alone often identify false anomalies, such as the previ...
Of course, volume is only one element to consider during any given trading day. Among the other considerations (discussed elsewhere in this book, and in Markets in Pro le) are: Value—developing higher, lower, overlapping, and so on. Which timeframe is in control (this is paramount). Rotational trading day. Trend day. One-timeframing. Short covering...
After a lifetime spent observing markets, I choose to give more emphasis to the Market Profile—with its evolving, multidimensional structure— because I believe it provides a more accurate representation of the auction process by juxtaposing volume and time. In addition, it smooths out aberra-tions when there is high volume at the opening price, as ...
What Is a Volume Profile. A Volume Profile is an advanced charting indicator that displays total volume traded at every price level over a user specified time period. Volume Profiles Uses: Identify Key Support and Resistance Levels for Setups. Determine Logical Take Profits and Stop Losses.
Volume Profile A volume profile graphically depicts the volume traded at each price (or price range) for a given period of time. This identifies how trading activity is distributed by volume (exchanged units). 1.2 Tick Data The Volume and Order Flow analysis tools described in this document rely on tick data to present accurate results.
• How Volume Profile works • My favorite Volume Profile strategies • How to find your own trading style and what are the best trading instruments to trade • How to manage trading around macroeconomic news • How to do your market analysis from A to Z • How to manage your positions • How to do a proper money management
