Volume Profile: A Trader's Guide
Volume profile shows how many shares traded at each price level. It tells you where value was established, not just how much total volume printed. Institutions leave footprints in the profile.
How it works
The profile histogram runs along the right side of your chart. Key points:
- Point of Control (POC): the price with the most volume. The fairest price. Where buyers and sellers agreed most.
- Value Area: the range holding 70 percent of all volume. This is where the market spent most of its time.
- Value Area High (VAH) and Low (VAL): the edges of the value area.
- High Volume Nodes (HVN): price zones of heavy trading. These act as support or resistance.
- Low Volume Nodes (LVN): price zones of thin trading. Price moves fast through these.
How to trade with it
When price moves outside the value area, it tends to rotate back. A rejection at VAH or VAL is a solid reversion setup. Wait for the rejection, do not anticipate it.
When price breaks the value area and holds above VAH or below VAL, a trend day might be starting. Wait for a retest of the broken level before entering.
The POC pulls price toward it. In ranges, you can fade moves away from the POC. In trends, the POC moves with price so fading does not work.
Nordic application
Large caps like Novo Nordisk, Volvo, and Equinor have clean profiles with sharp POC and value areas. Volume profile works best on these names.
Mid caps have wider value areas. Use weekly profiles here for cleaner readings.
Small caps do not have enough volume for reliable profiles. Stick to price analysis on these.
Session or composite
A session profile covers one day. Best for intraday setups. A weekly composite shows where the week's value formed. A monthly composite shows long term support and resistance zones.
Combining with other tools
Volume profile gives you context. It is not a standalone signal. Use the POC as a target when you are already in a trade. Use VAH and VAL as reversal zones with confirmation. Use LVN gaps to anticipate where price might accelerate.
Checklist
- Pick the right timeframe for your instrument
- Mark POC, VAH, and VAL
- Watch for reactions at these levels
- Enter only with confirmation (candle pattern, volume spike)
- Place stops beyond the value area boundary