Volume Profile

Version 1.0: 2021-02-06

General:

• I view volume profile as Supply/Demand, that shows relative strength. Price action will typically move between high volume nodes, and bounce or consolidate around.

• High volume nodes are essentially areas where buyers and seller agree, thus the high price action at those points (effectively, Supply and Demand) The higher the volume nodes, the more the price action is 'attracted' to those areas. If there is nothing moving the stock (i.e. volume), price action will naturally drift towards these high vol nodes.

• VPoC is the price point where there is the highest volume node. At any given timeframe, it usually, but not always, acts as a magnet for price action

• I view all nodes as potential supply/demand areas, and in conjunction with candles and chart patterns and multiple time frames, I can ascertain the strength of the supply/demand areas I identify from the volume profile.

• Catalysts can create fast movement from high vol node to high vol node. When price seems to settle on what appears to be a low volume node, Go to various time frames (especially higher time frames), and see that this is likely in fact a higher volume node area on a different time frame

How I Use Vol Profile:

• I evaluate from a 'top - down' approach, always starting on higher time frames. I use it for swings and swing/scalps mainly, as I find it more reliable than intraday scalping.

• Start with 1y/1d -> 3mo/4h -> 1mo/1h -> 5d/30m -> 1d/3m

• As with any top-down analysis, higher time frames always prevail.

• I will note where high vol nodes are on the higher time frames as stronger areas of supply/demand, and see how they correspond with high vol nodes as I go progressively lower in timeframes.

• If high vol nodes on multiple time frames correspond, I note this as very strong supply/demand areas, where price action will have a strong bounce, and need significant volume to get through (in either direction)

• These high vol nodes are my scaling zones, in scaling in and out of positions. When scaling in, I will tend to scale in heavier when the price action is closer to the VPoC.

• I also use Fibonacci Retracements and Extensions, and TMO/TTM Wave in conjunction with the volume profile