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Volume profile

A histogram showing how much volume traded at each price level over a period, plotted sideways on the chart.

A volume profile beside a price chartA price line on the left and, on the right, horizontal bars showing how much volume traded at each price; the longest bar marks the point of control and a shaded band marks the value area.52.051.050.049.0timePRICE OVER TIMEVOLUME AT EACH PRICEVALUE AREAwhere most ofthe volume tradedPOCthe single pricewith the mostvolumeLonger bars mean more shares changed hands at that price.
Volume profile, point of control and value area. Turn the chart on its side and count how much traded at each price instead of at each moment. The longest bar is the point of control, and the shaded band around it is the value area where most of the session's business was done.

Where a normal volume bar shows volume per time, a volume profile shows volume per price. Its peak is the point-of-control, and the area holding about 70% of the volume is the value-area.

High-volume nodes are prices where the market agreed on value and tend to act as support and resistance. Low-volume nodes are prices the market rejected quickly, and price often moves through them fast.

Example: over the last 20 days, 35% of a stock's volume traded between $48 and $50 and almost none between $52 and $54. A move into $52 could travel to $54 quickly; a drop into $49 is likely to find buyers.

Related: point-of-control, value-area, volume, support

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