Volume Profile: Mapping Traded Volume Across Price Levels

Summary

Volume Profile displays transaction volume at each price level over a chosen time interval as a horizontal histogram. Longer bars indicate prices where more trading occurred, while shorter bars indicate lower activity. The description presents it as a lightweight indicator that can be calculated over a selected chart period.

To choose the interval, the user positions two vertical markers at its beginning and end. The chart width setting controls the maximum bar length. The document also contrasts calculations based on the chart’s current timeframe with calculations based on a one-minute timeframe. Lower-timeframe calculations may require downloading price data that is not already available, which can delay the display. It provides no trading rules, validation, or evidence that volume concentrations predict future price behavior; the profile is a visualization of historical activity, not a standalone signal.

Key ideas

• Volume Profile represents transaction volume horizontally at each price within a selected interval.
• The profile interval is set by placing start and end markers on the chart.
• The chart setting limits bar length relative to chart width.
• Lower-timeframe calculations may require downloading additional price data.
• The document explains visualization and setup but provides no tested trading signal.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.