Topic 8: Volume Profile Explained (Volume and Liquidity)

Core Concept

Volume Profile shows how much trading happens at different price levels over a period. It creates a horizontal histogram showing trading activity at each price level.

Key Components

POC — Point of Control

• The area with the MOST traded volume activity
• Most relevant area to monitor
• Helps define stop placement and entry levels
• Highest concentrated volume for a particular period

High Volume Nodes (HVN)

• Areas with high trading activity around a price level
• Indicates consolidation — lots of buying and selling
• Represents "fair value area" for the asset
• When price approaches a previous HVN → likely to move sideways

Low Volume Nodes (LVN)

• Areas with little trading activity
• Occurs during breakout rallies or breakdowns
• Represents "unfair value area"
• When price approaches LVN → likely to rally through or bounce off quickly
• Market doesn't spend much time at LVN levels

Value Area (VA)

• Range of price levels where a specified percentage of all volume was traded

Application to Supply & Demand

• When a Supply or Demand zone matches the POC of the volume profile = VERY STRONG zone
• Use volume profile to validate and strengthen S&D zone identification

Images

Video

• Duration: 4:08
• Detailed explanation of volume profile usage

Key Takeaway for Bot

• POC = where institutions traded the most = key level
• Value Area High/Low = the levels used in every gold lesson as targets
• HVN = consolidation zones (support/resistance)
• LVN = price moves fast through these (breakout zones)
• Supply/Demand + POC alignment = highest probability trades