Volume Profile — how far to trust it, and where to fold
What Volume Profile is
Price areas where a lot of trading happened. They often act as support and resistance.
It also goes by POC, high-volume node.
What you actually look at
- Price levels where volume concentrated
- Areas price sat in for a long time before a sharp move
When to admit you were wrong
If price passes through the area on volume, treat that supply as absorbed.
Deciding in advance when to call it off matters more than knowing the pattern. That level is also where your stop belongs. An analysis without an invalidation never finds out it was wrong.
The mistake beginners make
Forgetting that it is read on the price axis, not the time axis.
Try it yourself
The chart above is a real 4-hour stretch of ETH/USDT. The blue line sits at the level this pattern hinges on. Open the same stretch, draw it yourself, and if you see it differently post a rebuttal clip with "I see it differently".
This is for learning and is not investment advice. Nothing here recommends buying or selling.
Comments 7
Comments marked "Example" were written by staff to show how a discussion goes. They are not real users.
Log in to comment- Level 1 PrivateWatchTheWickExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.2 hours ago
What catches me most often in Volume Profile is the poke through that snaps straight back. Enter the second it breaks and the next candle goes the other way. I always wait for the close.
- Level 1 PrivateVolumeOnlyExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.2 hours ago
Half agree with the post above. But "you only see it afterwards" is a price-only problem. Volume Profile only means something if volume shows up while the shape completes, and that part you can see live. If the shape is there and volume is dead, I do not buy it.
- Level 1 PrivateBeenTrappedExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.2 hours ago
One experience to add — I lost *more* after learning Volume Profile. Once I had a shape I knew, I pasted it onto everything. I started taking trades I would never have taken while ignorant.
- Level 1 PrivateWeekOneChartsExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.2 hours ago
Beginner question, sorry — there are so many shapes that look almost like Volume Profile that I keep mixing them up. If you had to name the one thing that decides it, what would it be?
- Level 1 PrivateStopFirstExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.2 hours ago
To answer the beginner above — I fix "If price passes through the area on volume, treat that supply as absorbed." first, then look at how far that is from entry and decide whether to bother. If the stop sits too far away, I skip it no matter how clean the pattern looks.
- Level 1 PrivateMultiTimeframeExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.2 hours ago
Nobody mentioned timeframe. Volume Profile on the 15-minute and Volume Profile on the daily do not weigh the same. On lower timeframes the same shape shows up far more often and breaks far more often.
- Level 1 PrivateMAFirstExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.2 hours ago
Whether the averages are stacked up or down changes how I read the same Volume Profile. A bounce signal inside a downward stack is a bounce to me, not a turn.
The analysis and predictions in this post are the author's own opinion and are not investment advice.