Volume profile (POC, value area)
Also called: Market profile, Point of control, POC, Value area, VAH, VAL
In short. A volume profile is a histogram of the volume traded at each price over a period (a session, a week, a composite). Its point of control (POC) is the price with the most volume; the value area is the range around it holding 70 % of the volume, bounded by the value area high (VAH) and low (VAL). These levels are where order-flow patterns are read.
Price trading inside the value area is rotation: fading the edges works. Price accepting outside it is a trend day: the edge becomes support or resistance. A naked POC from a prior session (never revisited) is a magnet many traders use as a target.
The profile gives the where, the footprint gives the who: a value area low with absorption on the footprint is a trade; a value area low with nothing on the flow is a line on a chart.
Questions traders ask
What is Volume profile?
A volume profile is a histogram of the volume traded at each price over a period (a session, a week, a composite). Its point of control (POC) is the price with the most volume; the value area is the range around it holding 70 % of the volume, bounded by the value area high (VAH) and low (VAL). These levels are where order-flow patterns are read.