Volume Profile Analysis: Finding Key
Praveen Dubey (SEBI Registered RA)
SP RESEARCHVIA PVT. LTD. (INH000015808)
Analyzing Price Acceptance and Rejection Levels
Standard volume bars show volume over time, but Volume Profile charts display volume traded at specific price levels over a set period. This provides deeper insight into market consensus and value levels. The trading experts at SP RESEARCHVIA PVT. LTD. outline how to use these metrics in day trading systems.
What are High-Volume Nodes (HVNs) and how do they function in trading?
High-Volume Nodes represent price levels where heavy volume was traded, indicating strong price acceptance and consensus. These levels act as strong support and resistance areas, as institutional participants frequently defend their average entry prices at these nodes.
Locating the Point of Control (POC)
The Point of Control is the single price level with the highest traded volume during the selected session. The market often behaves like a magnet toward the POC, returning to it during consolidation before initiating directional trends.
Trading Low-Volume Nodes (LVNs)
Low-Volume Nodes represent price zones where very little volume was transacted, indicating rejection. Prices typically move rapidly through LVNs, making them ideal targets for breakout and momentum trades.
Written by Praveen Dubey
Chief Research Analyst | SEBI Reg: INH000015808
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