Hello and welcome to this video from Diary of a traitor. Today we’re going to be going over volume at price analysis or some people like to call it the volume profile now volume and price analysis differs from the regular volume because instead of looking at the volume down here where it’s telling us how much of something was traded over a period of time and then it usually shades it red or green to say there were more buyers or sellers so where I’m looking at now there were 1000 or 1631 thousand contracts or stocks or coins or units of currency that were treated over this hour. That that we traded and that most of the volume was from people selling. So that gives us a good idea of what is happening with a timeframe, but it doesn’t tell us what is happening with the price and this is one of the hidden gems and kind of the greatest advantages for intraday trading or day trading. And. Sometimes you can find this for free on some software, but in at least in trading view, this is a this is a paid software or paid version and the volume profile we’re going to go to session volume. So the session volume only brings up what is what is the volume profile appears for just the day that it’s happening. So the open of Crypto currencies on trading view as that ends and closes and opens at 7:00 p.m. Central Standard Time. And so this is the volume profile but I’d like to I’d like to get rid of the Histogram a little bit and then create larger value areas. Rose rather and then I like to decrease the value area just a little bit. And then what we see here is the volume profile for each session. And if you can see that essentially what we have is we have a we have a horizontal representation of volume versus a vertical so were vertical volume tells us what has happened and how much has been traded during a certain set of time. This is telling us how much of something has traded at a particular price and if we were to even zoom in a bit here. And we were to apply the values. Very hard to see right now what we can see that the. For instance right here this says that we had 38 at this price level of about 82 58 in bitcoin and there were 38 bitcoin bought versus 56 sold. And so what this does the volume profile it tells us where most of the activity happens in this red line. Tells us where our where our point of control they call this the V.P. Ossi the pop or Paak PEOC the point of control is where the most of the volume at a price has been traded. So the price has spent most of the time trading at this 82 32 value area. And what’s the point of control tells us. Is that if prices are trading below the point of control, we are in an in a bearish and a weak condition and if we are trading above we are in a bullish in a strong condition.
And you’ll see that as the forms as the point of control forms we can get into conditions where it acts as a natural support and resistance there. So the price was trading here fell down came back up to visit that formed a resistance area and it broke down away. That became a lot of selling pressure. Additionally, when we came down to the current price range we are trading with a point of control down here at seventy nine hundred.
We are trading below that and we have not reached back up to it so we are considered to be in a in a weak and bearish cycle here. But we can look back and see over time. A thing to notice on on your charts is looking at. How the point of controls is forming are they ascending or descending and as the gap between them expanding that can tell us a lot. What we really like to see and identify are these. High volume and low volume nodes so a big peak in volume rate here. This is called a high volume node. And then areas where there’s not a lot of activity those are called Lowboy nodes or I’d like to combine deserts. And so the behavior of these zones is that when price approaches a low volume, area it can, it will a price area that has not had a lot of volume it moves through it really fast and you may not be able to see so much on a on a. On this type of chart volume, but we could look at a different way. So this is great for Intraday trading and looking at how the price action has been over the last few days to trade, but sometimes we need a broader view so we can do a fixed range.
And for fixed range let’s say we want to. Well, let’s go to a daily chart. And then let’s find the beginning of the month. So let’s look for higher Herewill start start on May 1st and we’ll make a fixed range of May 1st and that will go all the way to where we are now. All right, now here’s our volume profile for the current month of May in 2018 and we’ll do the same thing where I like to get a few more bars lower volume areas and get rid of the shade background because this is all I really need. So for the entire month of May, this is what we’ve got so far and the price action we see that the point of control is down here is that the 80 300 value area. And that we are trading below that line. The point of control while it acts as kind of a natural support resistance and it also acts as a natural point to return to. So think of price being attached to the point of control like a rubber band. The further it pulls away the more it wants to snap back up to it. And we have a high degree of probability that when Price comes from a higher or lower end it retraces all the way to the point of control and then goes above it or below whatever direction it is.
We have a high chance of retracing the entire move above here. So in this scenario if we were to trade all the way back above to this point of control on this chart here we have a high probability of actually trading higher and above this. The point of control is also very, very useful to use with natural areas of support and resistance or zones of control based off of Pivot’s if you remember watching a video we did recently together over Pivot’s. Redo pivots point standard if we take a look here this pivot was at 80 400 which is right within the value range of our point of control. So that is telling us that we have a very strong area of support and resistance so if price were to return to this area it would have a very difficult time getting there. Now we should also look at the prior month trading period because that is also going to give us an idea of wall prices falling down below this point of control where could it go. And so we’re going to get session by may want the fixed range. So we’re going to go to April first. And we’re going to trade that entire range here and do the same thing we did for the others. And what do we see here we see that the point of control. In April was down here where we spent the majority of the time trading down at the 68 100 value area. Now what is interesting to take a look at is. So we have what we’re basically looking at a monthly volume profile and we see that price. Trading pretty rapidly above through this area to see where we have this lot of volume here acting as a support zone as we moved up. It was easier to move up because there was not a lot of volume traded in here. And then we start to form another kind of base. We saw a high note form and that was very easy to trade through it. And so the past volume profiles can tell us a lot and if we really want to get a broad view, this is kind of a more dynamic style of. We can, we can get to a. Look at it through the visible range, which will just tell us everything on the chart that is currently visible. It will form that Moim profile. Sometimes just a little bit easier to see the kind of a larger picture view. We’ll go to 50 rows actually probably these 100 rows same volume area. And if we want to go just from the all-time high here we destroyed our screen over there about right there. And so this is the volume profile of the all-time high of set in December 15th to now.
And so what we’re looking at is the work actually treating just slightly below the current value the most traded volume areas and we’re right below the point of control which is 81 78. So that is the point of control on this large swing from the swing high to where we currently are. This is telling us that we are slightly below the point of control and so that is a bearish condition. So we should observe over the next few days and watch to see what price does at these levels because the behavior and the theory behind us says that while this is a high volume no trend and we’re technically trading below its so price has a much easier time moving down than it does moving up. If we ever saw price trading back up to 93 56 or that 93 100 zone. If we look above us all of this price activity very very very open. Not a lot there. If we even want to scroll out and go all the way to let’s go to 20 cent beginning of 2017. And this is our volume profile for 2017 for now. So we can see that the volume profiles actually telling us the poison control is way down here at 1185. And that we’re in.
We’re kind of in the middle of a big trading zone right here. So this is a pretty interesting way to look at it go to our weekly. We can see the whole price history and we can see that over the entire price history of Bitcoin’s chart and trading view the point of control is down at two hundred twelve dollars it seems like a light like kind of a silly value but it’s really not in the long run it’s just telling us where most of the participation has happened. And again, if we were to go with a recent swing low to that all time swing high and we look at where we’re at we’re still sitting right below that that boiling point of the controlled zone of 80 100 80 280 100. And that is what price is currently trading at. And if we see below us that the volume profile starts to decline to lower we go. So it is going to be much easier for price to move lower than it is to move higher. All right. That was just a little intro. And look at volume profile and how it can be used in your trading I hope you find this video very informative and useful and look forward to talking with you in our next videos bye.
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