Horizontal volume profile
Shows the maximum trading volume at a certain price level, which is a magnet for large players 👇
Short video lesson, 14 minutes: ➡️Watch on YouTube ➡️Watch on VK
Designation on the chart
A horizontal volume profile allows traders to accurately identify the most important zones where the greatest activity of major buyers and sellers took place:
Bright purple zones show large trading volumes (horizontal shelves) - places where major players opened many positions, certain zones of interest or struggle
Dark purple zones show voids - places where the price quickly slipped through without resistance
Long arrows at the maximum horizontal volumes or POC (Point of Control) - strong levels that act as a magnet for large players
Long arrows in voids show the boundaries of trading zones - weak levels from which a rebound can also be expected, but with a lower probability
In the example, we see how the price formed a large horizontal volume shelf, approached it, and after rebounding, moved sharply down.
In this example, we see small shelves from which a rebound can be expected.
Application in trading
The price always moves from liquidity to liquidity - whales cannot open or close their trade all at once - they do not have enough liquidity in the order book, which is why they build and close positions in parts in zones of accumulation of maximum horizontal volumes - that is where they move the price!
Correct identification of horizontal volumes will help you see important market zones and find the best entry and profit-taking points:
High horizontal volumes - these are key levels with maximum liquidity that act as support and resistance
Price levels with low volumes - these are "voids" where the price can move faster without encountering resistance, as if slipping through
When the price approaches POC, you need to see where it settles - if above, the scenario is bullish; if below, the scenario is short
It is better to open positions from the maximum trading shelves, but not "into the shelf"
It is also worth taking profit when the price approaches POC of large volume shelves
Trading based on horizontal volume shelves is one of the most popular strategies in trading, and it is ideal even for beginner traders thanks to clear entry points, stops, and targets.
Rebound trading - in a weak trend or sideways market, find POC a large or maximum volume shelf from which there will be a reaction, wait for the rebound to begin, and enter in its direction
Breakout trading - in a strong trend, wait for the volume shelf to break, and on the retest POC (return to the broken shelf and rebound) open a trade in the direction of the breakout
First of all, try the simplest horizontal volume trading strategy from the indicator developer
In the example, we see how a horizontal volume shelf holds the price from rising, then we got a rebound from the shelf and a further decline with small pauses on smaller shelves.
In the example, we see how a large horizontal volume shelf holds the price from falling - as a result, we got a price rebound from this level several times in a row.
In the example, we see how a strong resistance level coincides with a POC horizontal volume shelf - as a result, we got a price rebound from this level twice.
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