Horizontal volume profile
Shows the maximum trading volumes at a specific price level, which act as a magnet for big players👇
Short video lesson 14 minutes: ➡️Watch on YouTube ➡️Watch on VK
Labeling on the chart
The horizontal volume profile allows traders to accurately identify the most important zones where the greatest activity of large buyers and sellers took place:
Bright purple zones show large traded volumes (horizontal shelves) - places where large players opened many positions, certain zones of interest or battle
Dark purple zones show voids - places where the price slipped through quickly without resistance
Long arrows on maximum horizontal volumes or POC (Point of Control) - strong levels that act as a magnet for large players
Long arrows in voids indicate the boundaries of traded-volume zones - weak levels from which a bounce can also be expected, but with lower probability
In the example we see how the price formed a large horizontal volume shelf, approached it and, after bouncing off, went deep down.
In this example we see small shelves from which a bounce can be expected.
Application in trading
Price always moves from liquidity to liquidity - whales cannot open or close their trade all at once - there isn't enough liquidity in the order book, which is why they accumulate and close positions in parts in zones of maximum horizontal volumes - that is where they move the price!
Correct identification of horizontal volumes will help you see important zones in the market and find the best entry and profit-taking points:
High horizontal volumes - are key levels with maximum liquidity that act as support and resistance
Price levels with low volumes - are "voids" where the price can move faster, not encountering resistance, effectively slipping through
When the price approaches POC, you need to see where it will settle - if above, the scenario is bullish, if below, the scenario is bearish
It's better to open positions from the maximum traded shelves, but not "in the shelf"
It is also worth taking profit when the price approaches POC large volume shelves
Trading on horizontal volume shelves is one of the most popular strategies in trading, which is ideal even for beginner traders thanks to clear entry points, stops and targets.
Bounce trading - in a weak trend or range, find a POC large or maximum volume shelf that will react, wait for the bounce to begin and open in its direction
Breakout trading - in a strong trend wait for the shelf to be broken, and on the retest POC (return to the broken shelf and bounce) open a trade in the direction of the breakout
First of all, try the simplest trading strategy with horizontal volumes from the indicator developer
In the example we see how a horizontal volume shelf prevents the price from rising, then we got a bounce off the shelf and a further decline with small pauses on smaller shelves.
In the example we see how a large horizontal volume shelf prevents the price from falling - as a result, we got the price bouncing off 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 the price to bounce off this level twice.
Last updated