Volume Profile
A volume profile shows how many contracts traded at each price over a session or a chosen range, as a horizontal histogram. Its longest bar is the volume point of control, and the band holding about 70% of the volume is its value area.
Volume, laid on its side
An ordinary volume bar tells you how much traded in a period of time. A volume profile turns that sideways: it tells you how much traded at each price.
Long bars are prices where a lot of business was done. Short bars are prices the market passed through on little volume. The longest bar is the volume point of control, the VPOC.
High and low volume nodes
Profiles rarely have one smooth hump. They have peaks and valleys.
A high volume node (HVN) is a peak: a price area where the market spent a lot of contracts. Price often slows and rotates when it returns there, because both sides already agreed on it.
A low volume node (LVN) is a valley between peaks: a price the market rushed through. Price tends to move quickly through LVNs again, and they often mark the edge between two separate areas of value.
Value area by volume
The volume value area works like Market Profile's: start at the VPOC and add prices until about 70% of the volume is inside. Its top and bottom are the volume VAH and VAL.
Because it counts contracts rather than time, a short burst of heavy trading moves it more than a long, quiet drift does.
Market Profile or Volume Profile?
Market Profile counts time at price. Volume Profile counts contracts at price. Most days they agree on where value is.
When they disagree, it is worth noticing. A price with many TPO letters but little volume was a quiet drift. A price with few letters but heavy volume was a short, intense battle. Seeing both is one of the reasons to use them together.
Volume Profile in AXL Charts
AXL Charts draws volume profiles per session, as composites over several days, and for the range you can see on screen, with the POC, value area and high and low volume nodes. On recorded ticks the volume at each price is exact; Market Profile sits beside it on the same chart.
Questions
What is a volume profile?
A histogram of how much volume traded at each price over a session or range, drawn on its side beside the price chart.
What is the difference between Market Profile and Volume Profile?
Market Profile measures time spent at each price; Volume Profile measures contracts traded at each price.
What are HVN and LVN?
High volume nodes are price areas with heavy trading; low volume nodes are thin areas between them that price tends to move through quickly.