The Ultimate Guide to Using the Volume Profile Plus Indicator on Tradingview
The Volume Profile Plus indicator for Tradingview is an advanced and highly customizable volume profile tool that provides traders with an in-depth analysis of volume at different price levels. This comprehensive indicator enables traders to identify key support, resistance, and liquidity levels in the market.
In this detailed guide, we will cover everything you need to know about using the Volume Profile Plus indicator effectively, including:
What is Volume Profile Analysis?
Volume profile analysis involves studying the amount of volume or number of trades that occurred at different price levels over a specified period of time. It provides an estimation of the value area – where most of the trading activity took place. The point of control (POC) is the price level within the value area with the maximum volume or participation.
Understanding volume profile zones on charts gives traders an edge in identifying areas of high and low liquidity. High volume areas often act as support or resistance, while low volume zones represent potential breakout levels.
Key Benefits of Using Volume Profile Plus
Here are some of the main advantages of using the Volume Profile Plus indicator:
- High-resolution analysis: The indicator offers an ultra-fine volume profile with up to 2,500 rows of detailed volume data. This enables detecting key levels with higher accuracy.
- Enhanced precision: It examines intraday lower timeframe bars to distribute volume more precisely across prices. The default setting looks at 5,000 bars on 1-minute charts.
- Flexible range options: Users can choose between visible range, anchored range or look back at all available historical data to plot the volume profile.
- Customization: The indicator provides extensive style and visual tweaks to optimize the look and feel of the volume profile on charts.
- Ease of use: Despite its advanced functionality, the indicator is easy to set up and use even for novice traders on Tradingview.
Step-by-Step Guide to Using Volume Profile Plus
Follow these simple steps to effectively utilize the Volume Profile Plus indicator:
- Search and Add the Indicator
- On Tradingview charts, search for “Volume Profile Plus” in the indicators panel.
- The indicator script was published by algotraderdev. Add the “Volume Profile Plus” script to your chart from the results.
- Choose Range Type
- Select between visible range, anchored range or all available historical range to plot the volume profile.
- Visible range bases the profile on the current chart’s visible bars.
- Anchored range allows fixing a start date/time to plot profile from that anchor point.
- All range profiles the entire history of available bars on higher timeframes.
- Adjust Rows and Histogram
- Increase the rows under Style to make the volume profile more high-resolution.
- The rows represent the y-axis buckets for volume grouping.
- Adjust histogram background colors or make transparent as needed.
- Analyze Key Levels
- Identify the Point of Control and Value Area on the chart.
- Notice areas of high and low volume to mark support/resistance zones.
- Combine with other indicators for trade signal confirmation.
- Save and Share
- Adjust indicator settings to preference then click the star icon to save the configured version.
- Use the share icon to export a sharable chart link or embed code.
Check our advanced Spark Impulse Indicator
Using Volume Profile Plus for Trading Decisions
The Volume Profile Plus indicator offers traders an additional perspective into high probability price levels. Here are some ways it can be utilized:
- Spot strong support and resistance zones with high volume areas. These act as barriers for price movement.
- Identify low volume pullback areas as potential long entries in an uptrend. These offer low liquidity to push prices higher.
- Trade breakouts from high volume zones which suggest increased momentum in that direction.
- Determine overbought/oversold conditions when price stretches far from value area.
- Combine with other indicators like moving averages to make informed trading decisions.
Limitations and Downsides
While the Volume Profile Plus indicator is very useful, traders should be aware of some limitations:
- The free version of Tradingview only allows 3 indicators per chart. Consider upgrading to Pro to add more.
- It takes up significant space on lower timeframe charts. Hide when not actively analyzing.
- There is an element of subjectivity in volume profile analysis regarding trade signals.
- Requires an understanding of order flow and volume spread analysis to use effectively.
The Volume Profile Plus indicator available on Tradingview provides traders with a powerful tool to visualize areas of high and low liquidity on charts. It enables spotting key support and resistance levels with ease.
By combining volume profile analysis with other indicators and price action context, traders can significantly boost their probability of profitable trades.
So if you aren’t already using it, give the Volume Profile Plus indicator a try! With some practice, it can take your trading to the next level.