Volume Profile [ActiveQuants]

The Volume Profile indicator visualizes the distribution of trading volume across price levels over a user-defined historical period. It identifies key liquidity zones, including the Point of Control (POC) (price level with the highest volume) and the Value Area (price range containing a specified percentage of total volume). This tool is ideal for traders analyzing support/resistance levels, market sentiment, and potential price reversals.


█ CORE METHODOLOGY

1. Vertical Price Rows: Divides the price range of the selected lookback period into equal-height rows.
   
2. Volume Aggregation: Accumulates bullish/bearish or total volume within each price row.
   
3. POC: The row with the highest total volume.
   
4. Value Area: Expands from the POC until cumulative volume meets the user-defined threshold (e.g., 70%).
   
5. Dynamic Visualization: Rows are plotted as horizontal boxes with widths proportional to their volume.
   

█ KEY FEATURES

- Customizable Lookback & Resolution

• Adjust the historical period (Lookback) and granularity (Number of Rows) for precise analysis.
  

- Configurable Profile Width & Horizontal Offset

• Control the relative horizontal length of the profile rows, and set the distance from the current bar to the POC row’s anchor.
  

Important: Do not set the horizontal offset too high. Indicators cannot be plotted more than 500 bars into the future.

- Value Area & POC Highlighting

• Set the percentage of total volume required to form the Value Area, ensuring that key volume levels are clearly identified.
  
• Value Area rows are colored distinctly, while the POC is marked with a bold line.
  

- Flexible Display Options

• Show bullish/bearish volume splits or total volume.
  
• Place the profile on the right or left of the chart.
  

- Gradient Coloring

• Rows fade in color intensity based on their relative volume strength.
  

- Real-Time Adjustments

• Modify horizontal offset, profile width, and appearance without reloading.
  

█ USAGE EXAMPLES

Example 1: Basic Volume Profile with Value Area
Settings:

• Lookback: 500 bars
  
• Number of Rows: 100
  
• Value Area: 70%
  
• Display Type: Up/Down
  
• Placement: Right
  

Image Context:
The profile appears on the right side of the chart. The POC (orange line) marks the highest volume row. Value Area rows (green/red) extend above/below the POC, containing 70% of total volume.


Example 2: Total Volume with Gradient Colors
Settings:

• Lookback: 800 bars
  
• Number of Rows: 100
  
• Profile Width: 60
  
• Horizontal Offset: 20
  
• Display Type: Total
  
• Gradient Colors: Enabled
  

Image Context:
Rows display total volume in a single color with gradient transparency. Darker rows indicate higher volume concentration.


Example 3: Left-Aligned Profile with Narrow Value Area
Settings:

• Lookback: 600 bars
  
• Number of Rows: 100
  
• Profile Width: 45
  
• Horizontal Offset: 500
  
• Value Area: 50%
  
• Profile Placement: Left
  

Image Context:
The profile shifts to the left, with a tighter Value Area (50%).


█ USER INPUTS

Calculation Settings

• Lookback: Historical bars analyzed (default: 500).
  
• Number of Rows: Vertical resolution of the profile (default: 100).
  
• Profile Width: Horizontal length of rows (default: 50).
  
• Horizontal Offset: Distance from the current bar to the POC (default: 50).
  
• Value Area (%): Cumulative volume threshold for the Value Area (default: 70%).
  
• Volume Display: Toggle between Up/Down (bullish/bearish) or Total volume.
  
• Profile Placement: Align profile to the Right or Left of the chart.
  

Appearance

• Rows Border: Customize border width/color.
  
• Gradient Colors: Enable fading color effects.
  
• Value Area Colors: Set distinct colors for bullish and bearish Value Area rows.
  
• POC Line: Adjust color, width, and visibility.
  

█ CONCLUSION

The Volume Profile indicator provides a dynamic, customizable view of market liquidity. By highlighting the POC and Value Area, traders can identify high-probability reversal zones, gauge market sentiment, and align entries/exits with key volume levels.


█ IMPORTANT NOTES

⚠ Lookback Period: Shorter lookbacks prioritize recent activity but may omit critical levels.

⚠ Horizontal Offset Limitation: Avoid excessively high offsets (e.g., close to ±300). TradingView restricts plotting indicators more than 500 bars into the future, which may truncate or hide the profile.

⚠ Risk Management: While the indicator highlights areas of concentrated volume, always use it in combination with other technical analysis tools and proper risk management techniques.


█ RISK DISCLAIMER

Trading involves substantial risk. The Volume Profile highlights historical liquidity but does not predict future price movements. Always use stop-loss orders and confirm signals with additional analysis. Past performance is not indicative of future results.

📊 Happy trading! 🚀