paulflint

Gaps in the volume profile

Education
paulflint Updated   
BITMEX:XBTUSD.P   Bitcoin
Just a example to show how gaps in the Volume Profile caused during fast falls or rises in price are filled at a later date.

The gap between 4200 down to 3800 during the drop on 24th November was filled just over 24 hours later.

The left window shows the volume profile prior to the drop and up to the bottom of the drop.
The right window shows the volume profile from the start of the rise back up to 4000.
I have displayed the volume profiles back to back to make it easier to visualise.
The range of the gap in the volume profile has been marked with a box extending across both sides.

There are some other boxes in the chart that mark previous volume areas from last year.
This was created on my working chart and I didn't want to spend the time hiding them or opening a new chart for this example.
Comment:
See how the recent 15 minute candles conform to the volume profile

Notice the pump stops short where the spike is in the volume profile earlier.
Also notice how the wick extends to fill the gap where the profile dips in.
With practice you can target wicks in this way for your entries and exits, depending on position size.
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