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Volume Profile Explained: POC, Value Area and How to Use Them
Volume profile shows where the market traded most. Learn the point of control, value area and high and low volume nodes, with simple trading uses.
What a volume profile is
A normal volume bar shows how much traded in a period of time. A volume profile turns that sideways: it shows how much traded at each price. The result is a histogram on the price axis that reveals where the market spent its time and money.
The point of control
The point of control (POC) is the price level with the most traded volume. Markets often treat it like a magnet and a reference. Price tends to return to it, and it can act as support or resistance.
The value area
The value area is the range around the POC that contains about 70% of the volume. Its top is the value area high (VAH) and its bottom is the value area low (VAL). Price inside the value area is considered fair. A move outside it, with acceptance, can signal a new trend.
High and low volume nodes
A high volume node is a price where a lot traded. It often acts as a pause point. A low volume node is a gap in the profile where little traded, and price tends to move through it quickly. Traders use these to find targets and places where a move can accelerate.
Simple ways to use it
A common idea is to buy near the VAL when price holds and target the POC or VAH, and to sell near the VAH when price rejects it. Another is to trade a break above the VAH that holds as a trend continuation. Combine this with market structure and a clear stop loss.
Data caveat
Not every market has a reliable volume feed. In forex there is no central exchange, so volume often comes from tick counts or a single data provider. When there is no volume, a time-at-price profile can be used instead. The ScaleEdge signal panel shows which one it is using.
Key takeaways
- A profile shows volume at each price.
- The POC is the busiest price and acts like a magnet.
- The value area holds about 70% of volume.
- Check that your market has real volume data.
FAQ
- What is the point of control? It is the price level where the most volume traded during the period. Price often returns to it and uses it as support or resistance.
- What is a value area? It is the price range that contains about 70% of the traded volume around the point of control. Price inside it is considered fair value.
Related
Educational content, not financial advice.