Volume Profile
A histogram showing how much volume traded at each price level rather than in each period.
Also called: market profile · point of control · poc
In plain language
Standard volume charts show activity over time. Volume profile rotates that: it shows activity by price, revealing where the market actually did business.
The price with the most volume is the Point of Control. Wide areas of the profile are prices the market accepted; thin areas are prices it rejected quickly.
Thin zones tend to be traversed fast when revisited, because there is little resting interest to slow price down.
Why it matters
High-volume nodes often behave like magnets and low-volume nodes like slides, which helps in placing targets and stops where price is likely to react or accelerate.
Common mistakes
- Reading the profile without specifying the period it covers.
- Assuming a high-volume node must hold as support.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
The number of shares, contracts or units traded during a period.
The average price over a session, weighted by the volume traded at each price.
A price area where buying has repeatedly been strong enough to stop a decline.
A price area where selling has repeatedly been strong enough to stop an advance.
How easily an asset can be bought or sold without moving its price.