The ONLY Volume-Profile-Video you will EVER need (Trading World Champion reveals)

The only volume profile video you ever need. The volume profile is the most powerful indicator you have to choose to understand the deep side of trading. Today I will show you how the volume profile is working and I give you a lot of insights, a lot of explanations how you can use the volume profile indicator for yourself. And you feel much more committed with the markets if you understand the deep things inside of the volume profile.

Trust in me.

And I translated this video with AI because I'm not a perfect English speaker, but I think you will love it.

Yes, the Voluum profile is a very simple tool that can help us become much more aware of where markets are in balance or where they are out of balance. And it's very important for me to say upfront that you shouldn't use it in isolation for trading, but rather you can use it to identify zones and price areas where it makes sense to trade. Specifically, it makes sense to generate breakout trades, look for counter trades, or apply trend following strategies in the market to follow the global money. And that helps you a lot. And today I'm going to explain to you in a bit more detail how we do this at trade the traders and why this volume profile indicator helps us gain more awareness of the here and now in the market.

So how does the volume profile come about? I'd like to show you the following. First, imagine that we have a price movement in a certain price range here. And this is how the price has moved at some point. It started at time X and has now reached this point here at time Y.

What else do I know? I know that this price movement took place at different price levels.

And what does the volume profile do? The volume profile clearly shows us exactly how much trading volume was transacted in this particular price movement with the total volume summed up for each of the respective price ranges. This means that unlike what you might be used to, we are not showing price ranges with their corresponding volumes underneath here. That is information that many people already have. For example, you can see that in this price range here, 100 trades were executed. In my example, now the market has traded this price range again and let's say another 70 trades were executed there. This means that when summed up, we would have a total of 170 trades at this price level. So what happens now with the volume profile? The volume profile adds up these respective trades at the corresponding price levels. In plain terms, this simply means that we get a display of the total number of trades for the different price ranges here, showing how many trades were executed at a given Price range X. This helps traders and analysts better understand the distribution of trading activity across various price points. Simply put, for example, if you see that a market has spent a lot of time at a certain price range, the probability is relatively high that a lot of trades have also taken place there. In price ranges like here, where very little trading has occurred, there is usually also very little volume traded at those corresponding price levels. In this chart here, we again spent a somewhat longer period in the market, and as a result, higher volumes are generated at the corresponding price level. In conclusion, this price level is supplied with the corresponding volumes. So if we say that this volume profile gives us information, then we can simply use that information as such, knowing that here we have areas with very low trading volume. You can see it here. And here. In the areas where the market stayed longer, we generally have higher volumes. What does this tell us? It simply gives us the information that where the market is in balance, everyone is satisfied.

And where the market is out of balance, there is often dissatisfaction among the big players. Why is that? Because large market participants need time to enter and build up their positions. And that's why the market will always try to adapt to such fair price levels and return to them. And now I want to show you how we can use all of this in our trading before we get started. And take a look at which price zones are fair or unfair. And I want to explain these terms. There is the so called point of control. This is the point where the market has accumulated the highest total volume at a given price level. That means here and often. This is a price area with a very large range. The market has executed the most trades. Then there are the so called value area high and low. These are the price areas where the market starts to move into an imbalance. This means if I transfer this over here, everything above the value area high and below the value area low is considered an unfair price area. This means that everywhere here the market felt very comfortable. And in this price area and in this price area within the corresponding time frame, the market simply did not feel comfortable. What does that mean for us? The market will typically attempt to return to fair price areas when it is being used by large market participants to build up or reduce positions accordingly. And this is the case in about 70% of market phases. That's just something you need to know. For us, this means we can look to see if we can find trades here or here in order to trade back into equilibrium. That's the first result we get from the relevant information. Then, in addition, there are the so called low volume areas, low volume nodes. There are many terms for this. And these price areas are zones with very low volume for the respective time frame we're looking at. And the market often bounces off these areas. And the simple reason for this is that it likes to move down here, bounce off and return to equilibrium. And that's basically all there is to it. So what does that look like when you actually look at it on a chart? For example, here you can see the price movement of a market up to the end of the day. A new day has started here. The corresponding volume profile is this one here.

And so we can immediately see here the point of control, which many consider to be an important reference price for entering trades. But we see it a bit differently. And here we have the value area high, which is the price range where the market starts to move into unfair price regions above it. And here we have the value area low, which is the price range where the market then moves below into unfair price areas. How does this help us? Let's transfer all of this to the next day and then we can see quite clearly what the market did on this day. And I'll draw the value area for that day in orange. Now.

On this day it started here and immediately moved into the previous day's balance area. So we know that the probability is high that the market now has acceptance and wants to trade fair prices again. Then it moved up here and showed us that no, it's not going back into unfair price areas. So the logical consequence is that it wants to trade the entire price range of the previous day. In other words, this value area from the previous day, we can only refer to that one because this one here is new. So, and now may be an interesting moment for you to see what happens when the market falls below such a level. Very often it accelerates at first. And why is that the case? Because a lot of market participants fall out of balance and then they sell their positions below that level because they had speculated that the market would continue to move back and forth. So what can we conclude, for example, with a little illustration like this, you can explain it quite simply. This is a candlestick. And this candlestick is now split into bid and ask prices. That means in buy and sell prices for this time frame. Let's just say it's a day, daily high, daily low. And this is the body of the candle. What we see here are all the different prices that have been traded. And yes, this is a so called footprint chart. I'll make a separate video about that. Later. But what I want to show you is that you can also sum up, for example, the volume profile for the corresponding price range and you can immediately see where the market had its equilibrium. And this information helps us when we see that the market, for example, is moving further and further away from this price range. Because then we know, oh, everyone who is in equilibrium here could now run into trouble. Now we come to the topic that is exciting for us. So how does all of this help us? How does all of this help us to determine support and resistance, that is technical resistance and support zones, which are combined with trading volumes. So let's start and take a look at where these volume profiles occurred and where the corresponding value boundaries for these volumes volume profiles were. For example, here are these ones.

I'll keep drawing them nicely. And then here, and then here as well. What does this inside day tell us, meaning this day that was completely within the previous day's range? It tells us very clearly that everything is in total balance compared to the previous day. But now we have the market opening on the next day. And now we see, okay, the market goes down and now changes its balance. And look what often happens in the afternoon. The market tests this imbalance area here again. Yes. And then, since it has already indicated that it accepts lower prices and the major market participants now feel comfortable at lower levels, the logical consequence is that we can use such a price area here, because we know that the market is in imbalance compared to previous days and weeks, depending on which price area we are looking at. And here we can look for a counter trade in the direction of the trend or in the context direction. This means, as we have understood, when supply and demand shift, there is a new acceptance of prices at lower levels. And thus when the market tests an area, the probability is high that it will move back there again. And that is exactly the case here. That's one approach. What else can we do? We can look at if each of these structures here represents a day, then we can see where, for example, we have so called overlaps. And overlaps are, for example, volume nodes, value highs, or also several PoCs within a price range. These are interesting overlap levels. And when the market on a given day moves back into such a price area, like here, where we clearly know the probability that the market will break out explosively above this level is very high. Why is that? Because here we have accepted significantly lower prices. The major market participants have shifted their range from above to below. Now, for example, some news comes out. The market pushes up here and then tells us all right, this is where it ends. Because if we go above this level now, everyone here will be in a bad position. And being in a bad position is generally not cool. So the market participants push the price back down, and these are the logical consequences. If you look at the whole thing a bit more cleverly. Yes, that's what I really wanted to share with you today. And to sum up, what am I trying to tell you with this? You can use the volume profile to locate areas of balance and imbalance. You can look for storage levels where you can then identify the appropriate setups for breakouts, trend continuations or counter trades. And always keep in mind whether prices are fair or unfair. Maybe this has helped you and maybe the simple methodology and way of explaining things has helped you too, because there are no secrets in the stock market. Keep it simple should always be the motto. And maybe you realize that you don't have to make rocket science out of all these things, but that it's often much more effective to simply establish the simplicity of the processes for yourself. First build Lego, which many people enjoy, and then play with lego. Yes, and that's what traders have to do. They have to use their creation to spend some time there and simply play their game. Thank you for listening. I hope this has helped you gain a deeper understanding of the volume profile. And in the next lessons there will certainly be more great insights that you can implement there. Thank you very much.