The Practical Guide to Volume Profile

Introduction
If you walk into a restaurant and find that a specific dish is the most sold, you’re likely to order it, because people must have chosen it for a reason. This is the same idea as volume profile — just as the digital revolution changed the world of financial transfers, volume profile completely changes the way you analyze the market.

What is Volume Profile?
It is a technical analysis tool that shows the distribution of trading volume at each price level over a specific time period.

Simply put:
It helps you know:

• Where the highest number of trades took place

• What are the important price levels that the market reacts to

The difference between it and traditional indicators
Traditional indicators such as moving averages are time-based.
Volume profile is related to price and trading volume regardless of time.

How does volume profile work?

1. Its main components

• POC (Point of Control): The price with the highest trading volume

• VAH (Value Area High): An area above the POC with high trading volume

• VAL (Value Area Low): An area below the POC with high trading volume

Types of volume profile

How to use it in trading

Identifying important areas
The areas with large trading volumes are usually strong support or resistance levels.
Price tends to bounce off these areas or break through them strongly.

Excellent trading opportunities

• Buy at the VAL area with other confirmations

• Sell at the VAH area with reversal signals

Risk management
Place stop loss outside the high-volume areas.
Set profit targets at the next POC levels.

Advantages of volume profile

• Shows you the real market behavior

• Helps you identify liquidity areas accurately

• Works on all timeframes

• Integrates easily with other analysis tools

Common mistakes to avoid

• Don’t rely on it alone without confirmation indicators

• Don’t ignore the overall market context and news

• Don’t use timeframes that don’t fit your strategy

How to start using it
Choose a platform that supports this tool, like TradingView.
Set up the basic settings:

• Timeframe (day/week/month)

• Display format
  Apply it on the chart and start the analysis.

Conclusion
Volume profile is not just a regular tool — it really changes the way you understand the market. Just as digital currencies changed the world of transfers, volume profile can completely change your trading level.

Final tip: Try it first on a demo account until you make sure you understand it well before using it in your real trades.