VOLUME PROFILE SECTIONS:
1> What is Volume ?
2> What are volume NODES?
3> HIGH vs LOW volume NODES
4> Value Area - $ Price Rotation
5> 3 KEY Parts of VALUE Area? “VAH” “VAL” “POC”
6> Types of “Time Per Profile”
7> 4 Common Volume Profile SHAPES - D P B b
8> How to use for ENTRY/ EXIT
9> Trade Plan - What Is That?
1. What is VOLUME when it comes to trade?
It represents the number of shares/contracts of a underlying security “stock” traded between market participants called by us as Traders "buyers and sellers".
Stocks > the volume it is measured by the number of shares traded.
Futures/Options > the volume it is measured by the number of contracts traded.
Using Volume Profile instead of it being on the X axis “bottom” of the chart it is on the Y axis “left" side horizontally. Check RED ARROW chart below.
Volume profile shows us volume traded for a SPECIFIC PRICE instead of time like market profile. Two different types of profile.
Every time a contract is traded the volume profile builds out to the right as more and more contracts are traded at that price.
. NODES: What are nodes?
When you zoom all the way in on volume profile you can see the size of each node. These price levels are called nodes and measure the amount of contracts traded within a specific price point.
3. HIGH Volume Nodes vs LOW Volume NODES.
HIGH Volume Nodes: (GREEN ARROWS —> in picture below) Are were a HIGH number of contracts are traded so it is slow for price to move through these nodes sometimes.
BALANCE - When there are high volume nodes it means there is balance forming and that market participants agree on a price also know as “fair value”
LOW Volume Nodes: (RED ARROWS —> in picture below) Are were a LOW number of contracts are traded so it is fast for price to move through these nodes usually.
IMBALANCE - When there is a market imbalance price moves very fast until it finds a “fair” value.
Sometimes price will move quickly to a LOW NODE which they call vacuums so sometimes they will wick to them. (Look at where the wicks are in the picture and they are where the LOW Volume Nodes are.
1> What is Volume ?
2> What are volume NODES?
3> HIGH vs LOW volume NODES
4> Value Area - $ Price Rotation
5> 3 KEY Parts of VALUE Area? “VAH” “VAL” “POC”
6> Types of “Time Per Profile”
7> 4 Common Volume Profile SHAPES - D P B b
8> How to use for ENTRY/ EXIT
9> Trade Plan - What Is That?
1. What is VOLUME when it comes to trade?
It represents the number of shares/contracts of a underlying security “stock” traded between market participants called by us as Traders "buyers and sellers".
Stocks > the volume it is measured by the number of shares traded.
Futures/Options > the volume it is measured by the number of contracts traded.
Using Volume Profile instead of it being on the X axis “bottom” of the chart it is on the Y axis “left" side horizontally. Check RED ARROW chart below.
Volume profile shows us volume traded for a SPECIFIC PRICE instead of time like market profile. Two different types of profile.
Every time a contract is traded the volume profile builds out to the right as more and more contracts are traded at that price.
. NODES: What are nodes?
When you zoom all the way in on volume profile you can see the size of each node. These price levels are called nodes and measure the amount of contracts traded within a specific price point.
3. HIGH Volume Nodes vs LOW Volume NODES.
HIGH Volume Nodes: (GREEN ARROWS —> in picture below) Are were a HIGH number of contracts are traded so it is slow for price to move through these nodes sometimes.
BALANCE - When there are high volume nodes it means there is balance forming and that market participants agree on a price also know as “fair value”
LOW Volume Nodes: (RED ARROWS —> in picture below) Are were a LOW number of contracts are traded so it is fast for price to move through these nodes usually.
IMBALANCE - When there is a market imbalance price moves very fast until it finds a “fair” value.
Sometimes price will move quickly to a LOW NODE which they call vacuums so sometimes they will wick to them. (Look at where the wicks are in the picture and they are where the LOW Volume Nodes are.
Options & Futures Trader