Volume Profile

Peter already knows the volume columns below a chart: each belongs to a time period. Volume Profile arranges the underlying information differently. Imagine sorting trade receipts into trays by price band, then adding the quantity traded in each tray. The result is a set of horizontal bars: longer means more volume, and a higher position means a higher price. TradingView builds its profile from lower-timeframe data. That processing does not necessarily capture every trade at its exact price. The number of rows and the resolution of the inputs therefore affect how detailed Peter’s picture can be. [1]

TradingView offers Visible Range Volume Profile for the portion of the chart on screen, and Fixed Range Volume Profile for a chosen time span. When Peter zooms out to include the previous week, the visible profile may incorporate more trades. The market’s past has not changed; Peter has changed the question he is asking. A fixed range helps keep the same starting and ending points. For a fair comparison, record the range and row settings instead of comparing pictures that merely look similar. [2] [3]

TradingView calls the most prominent row Point of Control (POC). It is the price band with the largest total volume in the selected profile. Think of the fullest tray, not the average of all the receipts. It need not be in the middle of the chart or at today’s price. If adjacent bands are combined into wider rows, a different band may become the largest. Ties also depend on the application’s selection rules. POC alone therefore does not tell Peter that buying there will be advantageous or that price must return. [1]

Value Area (VA) selects part of the profile according to a chosen share of total volume. TradingView commonly uses a 70 % target and works outward from POC through adjacent rows; VAH marks the upper boundary and VAL the lower one. For Peter this helps locate concentrated activity, rather than calculate bitcoin’s true value. Rows are whole bands, so the achieved share depends on the algorithm, tie handling and stopping rule. It is wrong to promise exactly the same 70 % in every application. It is certainly not the probability of price returning to the highlighted area. [1]

Coloured row segments might suggest that green belongs to buyers and red to sellers. TradingView instead describes an up/down split based on the direction of a lower-timeframe candle: Open is its first price and Close its last. This is not a direct buy/sell measurement based on which side initiated the trade with an immediately executable order. Every completed trade has both a buyer and a seller. Peter needs to establish what the colours actually classify; a predominance of green alone reveals neither the number of interested buyers nor new money entering the exchange. [1]

For crypto, TradingView distinguishes base volume, such as a quantity of BTC, from quote volume, such as its dollar value. Some other instruments use tick volume, meaning the number of price updates. These quantities cannot simply be added together or treated as interchangeable. Coinbase supplies candles for a particular product: one exchange’s BTC–USD data is not the entire bitcoin market. It also warns about incomplete history and unpublished intervals without trade records. Before comparing, Peter checks the exchange, pair, unit and completeness of the data. A prominent bar from a limited source still describes only that source. [1] [4]

TradingView calls prominent volume peaks High Volume Nodes (HVN) and troughs Low Volume Nodes (LVN). They give Peter a map of areas with more or less historical activity. He can compare them with support and resistance, areas where he watches for a possible halt in a fall or rise. But the profile is not today’s Order Book, the list of pending orders. Old trades do not establish that the same people want to trade at the same prices again. The profile’s shape alone therefore guarantees neither a bounce, a breakout nor the speed of the next move. [1]

Peter can easily find an impressive POC in a completed daily profile. That morning, however, he did not yet know the afternoon’s trades. Using them to assess his morning decision introduces lookahead bias: the test receives information unavailable at the time. TradingView also warns about overfitting, tailoring rules to a particular history. Define the profile range, decision time, entry, exit and position size in advance, include fees and the difference between expected and actual execution prices, then check the rules on other data. An attractive profile begins an investigation; it is not a complete trading strategy. [5]