Trading platforms often plot volume as a function of time. This means that the information displayed is related to how much volume was transacted within a period or bar. However, another critical information that traders could use would be volume as a function of price. It is important for us to know how much volume was traded as a particular price point since this gives us an idea whether the market views that price point as a key level or not. This is where the Volume Profile Range indicator is used for.
The Volume Profile Range indicator indicates volume as a function of price. It overlays horizontal lines on the price chart indicating the volume of transactions at different price points within a day.
The Volume Profile Range indicator detects the volume of price based on the “Tick Volume” of every 1-minute bar as a preset. However, it also allows traders to use “Real Volume” per “Tick” whenever this data is available from the broker’s server.
This indicator then plots horizontal lines indicating the volume of transactions on each price level.
It also plots a horizontal Volume Weighted Average Price (VWAP) line which is represented by the dotted lines.
The Volume Profile Range indicator has several useful bars that can be modified. Among this, the “Range Period”, “Range Count”, “Mode Step”, “Volume Type”, and “Data Source” are some of the most important options that traders can tinker with.
Price areas with high volume often indicate that these levels are key support or resistance areas. Price would typically find it difficult to move with momentum when it is in such area.
One of the most viable ways to trade this indicator is to trade breakouts coming from an area with dense volume as price tends to move with strong momentum as it breaks beyond these areas.
When to Enter?
Identify key price areas where there is high volume of trade. Open a buy order as soon as price breaks above the area with strong momentum. Set the stop loss on the support below the entry candle.
When to Exit?
Set the take profit on the next area with high volume of trade which can act as support.
Identify key price areas where there is high volume of trade. Open a sell order as soon as price drops below the area with strong momentum. Set the stop loss on the resistance above the entry candle.
Set the take profit on the next area with high volume of trade which can act as resistance.
This is one of the most effective tools that profitable traders use. However, this tool is more effective when the data feed used is from real price on a per tick level. Some brokers provide this data while others do not. Still, this information can be very useful and many professional traders use this type of indicator to trade profitably.
MT5 Indicators – Download Instructions
Volume Profile Range Indicator for MT5 is a Metatrader 5 (MT5) indicator and the essence of this technical indicator is to transform the accumulated history data.
Volume Profile Range Indicator for MT5 provides for an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
Based on this information, traders can assume further price movement and adjust their strategy accordingly. Click here for MT5 Strategies
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By: Forex CommitteesTitle: Volume Profile Range Indicator for MT5Sourced From: www.forexmt4indicators.com/volume-profile-range-v6-0-forex-mt5-indicator/?utm_source=rss&utm_medium=rss&utm_campaign=volume-profile-range-v6-0-forex-mt5-indicatorPublished Date: Thu, 18 Aug 2022 19:27:35 +0000