What is volume profile in trading?
In one line: Volume profile is a chart tool that shows how much volume traded at each price over a chosen period, drawn as sideways bars beside the chart.
The short answer
Normal Volume bars sit under the chart and show how much traded in each time period.
Volume profile turns that sideways. It shows how much traded at each price. Long bars mean lots of trading at that price. Short bars mean price passed through quickly.
The 3 parts to know
- Point of control (POC): the single price with the most volume. See Point of control.
- Value area: the range of prices where most of the volume traded, usually about 70%.
- Low-volume areas: prices with thin bars, where price moved fast and barely traded.
A simple example
Over one week, a stock traded between $95 and $105. The profile shows:
| Price zone | Shares traded |
|---|---|
| $103 – $105 | 0.4 million |
| $100 – $103 | 2.6 million |
| $98 – $100 | 1.8 million |
| $95 – $98 | 0.5 million |
Total: 5.3 million shares. The $98 – $103 area holds 4.4 million, about 83%. That's where buyers and sellers agreed on price most of the week. Above $103 and below $98, trading was thin.
Numbers made up to show the reading.
Why it matters
Heavy-volume prices act like cushions. Price often slows there, because many people hold positions from those prices.
Thin-volume areas are the opposite. Price tends to move through them quickly. That can help explain why a market "jumps" from one level to the next.
A turning point on the chart that lines up with a heavy-volume price means two things at once.
Where to find it
On TradingView, look for "Volume Profile" in the indicators or drawing tools. There are versions for the visible chart, a fixed range you pick, and each session. Some versions need a paid plan. See how to add an indicator on TradingView.
A common mistake
Using it on a market with no real volume data. Spot forex has no central exchange, so its volume profile shows only one broker's activity. Futures and stocks give a much fuller picture.
The other mistake: drawing a profile over a random range. Pick a clear one, like one session, one week, or one move from a low to a high.
Questions
What is the value area in volume profile?
The price range that holds most of the traded volume, usually about 70%. Its top and bottom are called the value area high and low.
What timeframe should I use for volume profile?
Match it to your trading. Day traders often use one session. Swing traders often use weeks or a whole move.
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