Volume Profile is a powerful indicator that will show you where volume is concentrated. You can use this information to make more informed trading decisions by looking at the total volume, how it changes over time, and the volume distribution. Thinkorswim includes Volume Profile as one of its default charts.
Volume Profile can also be used to identify areas of support and resistance. In conjunction with other indicators such as price movement, trend lines, and other technical indicators, the volume profile provides the trader with a complete picture of the trading environment.
In this article,
- I will explain how to set up volume profile on Thinkorswim Step-By-Step
- Show Pictures below with examples on how to do this
- Help you understand how Volume Profile Analysis Indicator can complement your trading style
- Give an example on how to read volume profile analysis indicator
- Provide a great book on Volume Profile Analysis Indicator you can purchase if you want to study in-depth
How To Add Volume Profile Analysis Indicator on ThinkorSwim (TOS) Settings
- Go to the ThinkorSwim Software and click on the Charts Tab header at the top of the page
- Type in a ticker symbol (our example image uses LCLP)
- Once you have finished loading your chart click on Studies at the top right
- The Studies button will show you a dropdown list of Indicators to select from
- Select Studies / Add Study / Market Strength Studies / Volume Profile
- Add the indicator by clicking on the name Volume Profile
- Close the pop-up window
- You should now be able to see the Volume Profile Indicator on your TOS – Thinkorswim charts
- As you change the time-frame of the chart you are looking at (ie. 5min, 30min, 60min, 1 day), the Volume Profile should adjust to capture support and resistance pressure lines with the new time-frames you have selected in Thinkorswim.
How To Overlay Volume Profile Indicator In Thinkorswim
How To Read TD Volume Profile Analysis Indicator Thinkorswim (Explained)
Volume Profile Analysis is a way to analyze the different characteristics of trading volume on the chart. It is used to determine possible changes in price direction or timing, and it can be applied to all time frames.
To read Volume Profile Analysis, traders need to look at the bars column on the right-hand side of this chart example.
Notice the following plots on the example chart below:
- POC – Point Of Control (most volume/price action has traded)
- Profile High – The highest price level reached within the specified time interval
- Profile Low – The lowest price level reached within the specified time interval
- VA (Value Area) High – The highest price level of the Value Area
- VA (Value Area) Low – The lowest price level of the Value Area
- As price action trades sideways (highlighted by the white Rectangle Box) in our example below, it builds a support area for future price movement. This is easily viewed when the price touches the new support and bounces higher (slightly above the white box, where our white arrow has been drawn to illustrate this)
- The longer price action trades sideways, the bigger the Volume Profile bars become which indicates a key important trading price or area on the chart
- Volume Profile is a popular indicator used by traders to analyze and identify patterns in the price movement of a security. The indicator attempts to show how much volume was done at the specified period and the relationship between the volume profile and the price. Traders may use it as a signal for an upcoming trend change
How To Setup Volume Profile On Tradingview
If you are looking for a tutorial on how to setup Volume Profile for Tradingview charts, check out the following article
Volume Profile Trading Book
Volume Price Analysis is a technique for understanding what is happening. The book A Complete Guide To Volume Price Analysis by author Anna Coulling can be purchased on Amazon, explains the method, and provides in-depth examples of using it.
The book explains how volume profile is a technical analysis tool and is used to project trading positions by identifying support and resistance areas. The highest high and lowest low prices are specified to read the indicator.
The volume profile can be adjusted to reflect time by considering each high or low point. Volume Profile Analysis book is a guide to understanding the basic principles of volume profile price analysis. It is a must-read for anyone interested in reading the market.
A Complete Guide To Volume Price Analysis by author Anna Coulling
Keep in mind that the Volume Profile Analysis Indicator can be used at any time frame. The example above shows the volume pressure in Tradingview charts. This is shown on the one-day trading time frame for a particular penny stock APTY.
You can set up the Volume Profile Analysis Indicator in Tradingview, Thinkorswim (TOS), Ninjatrader, MT4, or any other charting/volume analysis tool you are subscribed to.
Types Of Technical Indicators (Most Used)
- List Of Technical Indicators (Most Used)
- Buy And Selling Volume Analysis Indicator
- Relative Strength Index Indicator (RSI)
- Moving Averages For Stocks (MA, EMA, SMA)
- Accumulation vs Distribution Indicator
- Moving Average Convergence Divergence (MACD)
- TTM Squeeze Indicator
- Know Sure Thing (KST) Indicator
- Awesome Oscillator and MACD Histogram
- Volume Weighted Average Price (VWAP)
The Thinkorswim trading platform can be a powerful tool for trading stocks. Traders need to set up a volume profile to take full advantage of the software. This involves choosing to add the Volume Profile setting in their charts.
Leveraging volume profile in trading can help you determine when a stock has been oversold or overbought. It is a technical analysis that allows traders to identify buyers’ and sellers’ balances.
Hopefully, you found this article helpful and better understand how to set up the volume profile in the Thinkorswim trading platform.
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