Indicator library · Volume
Volume by Price, The Traded Profile
Every other measure here plots against time. This one throws time away and asks a different question: of everything that changed hands over this period, how much of it happened at each price?
What the profile is
Take every trade over a chosen period, sort it by the price it happened at rather than the day, and total the volume in each price bin. Drawn horizontally beside the chart, the result is a distribution: wide where a great deal changed hands, narrow where the instrument passed through quickly.
That single change of axis is what makes it worth having. A volume bar under a candle tells you Tuesday was busy. A profile tells you that on the window charted below, 44% of everything that changed hands did so in a three-point band between 63 and 65, a statement about where the market has agreed, and one no time-indexed measure can make.
The distinction matters most when a market has spent months going nowhere. A time-series chart of a long consolidation is a flat, uninformative smear; the profile of the same period shows exactly where inside that range the business was actually done, and how much of it sits above or below wherever price happens to be standing now.
The three readings
| Feature | Definition | Read as |
|---|---|---|
| Point of control | The price with the most volume | The level most agreed on. Unstable when two peaks are nearly equal. |
| Value area | The band holding 70% of the volume | The range the instrument has been accepted in. More robust than the single level. |
| Low-volume node | A thin stretch between two shelves | Prices the market passed through. Little accumulated interest to slow a return. |
The value area deserves preference over the point of control for a reason that has nothing to do with theory. A profile with two peaks of nearly identical height has a point of control that can jump between them on a single day’s data, while the value area containing both barely moves. When a reading is unstable under a small change in the input, the more stable form of it is the one to quote.
What it discards
A profile throws away time, and the cost of that is worth stating plainly because the tool is usually presented without it. Heavy volume at 64 does not say when: it may be last week’s consolidation or a shelf from four months ago that has since been traded through in both directions. Those are different markets and the profile draws them identically.
Two habits follow. Keep the ordinary price chart beside the profile, so the shelves can be dated by eye. And fix the window before looking, a profile computed from a period chosen after seeing where price is now will always produce a shelf that explains the present, which is the same circular exercise that ruins Fibonacci retracements drawn from a swing selected in hindsight.
Where it misleads
| Situation | What goes wrong |
|---|---|
| Time discarded | A shelf from four months ago and one from last week look identical, and mean different things. |
| Window chosen after the fact | Extending the period until a shelf lands near the current price fits the tool to the answer. |
| Built from daily bars | Spreading each session's volume across its range is an approximation; on wide-range days it is a poor one. |
| Point of control quoted alone | With two near-equal peaks it can jump between them on one day's data. Use the value area. |
| Bin width ignored | Coarse bins merge two shelves into one; fine bins fragment a single shelf into noise. |
| Mechanical volume included | An index rebalance or expiry can build a shelf at a price nobody chose, purely from obliged trading. |
Why it belongs on this site
Volume by price is the most literal answer to the question the whole reference is organised around. If a large position cannot be established or unloaded without leaving a trace, the trace is a great deal of volume at a particular price, and the profile is the only measure here that shows it as a price rather than as a date.
It pairs naturally with the two other volume readings for that reason. A shelf says where size changed hands; the bar says whether the effort on any given session met result; VWAP says where the average of it all sits today. None of the three forecasts anything, and together they describe a market’s participation more completely than any oscillator built from closing prices can.
Frequently asked questions
What is volume by price?
A histogram of how much volume traded at each price level over a chosen period, drawn horizontally beside the chart rather than along the time axis. It answers a different question from ordinary volume bars: not "how busy was Tuesday" but "how much of this instrument changed hands around 64". Everything else on this site plots against time; this is the one measure that discards time entirely.
What is the point of control?
The price at which the most volume traded over the period, the tallest bar in the profile. It is read as the level the market has most agreed on, since more shares changed hands there than anywhere else. It is a description of the past with no forecast attached, and its usefulness is that a level a great many participants transacted at is a level a great many participants remember.
What is the value area?
The band of prices containing a fixed share of the total volume, conventionally 70 per cent, expanded outward from the point of control. It gives a range rather than a single level and is the more robust reading of the two, a profile with two nearly equal peaks has an unstable point of control while its value area barely moves.
What does a thin stretch in the profile mean?
That very little traded at those prices: the instrument passed through quickly, usually on a gap or a fast move, and few positions were established there. Practitioners treat thin areas as levels price tends to travel through rather than stall at, because there is little accumulated interest to slow it. It is a plausible mechanism and considerably weaker evidence than the confident charts in the literature suggest.
How is it different from VWAP?
VWAP compresses the same information into one number — the average price weighted by volume — while a profile keeps the whole distribution. That matters when the distribution is not a single hump: an instrument that traded heavily at 60 and again at 70 has a VWAP near 65, a price at which almost nothing changed hands. The profile shows the two shelves; the average hides them.
What period should the profile cover?
Whatever period you can justify as one episode, a single session for intraday work, a consolidation from its start to its end, a range between two obvious turning points. The choice is the whole discretion in this tool, and extending the window until a shelf appears where you want one is fitting the tool to the answer. Fix the boundaries before you look at the profile.
What can it not tell you?
When any of it happened. A profile that shows heavy volume at 64 does not say whether that was last week or four months ago, and those are very different situations. Recent transactions are held by participants who still remember the price, and old ones may have changed hands many times since. Reading a profile without the time-series chart beside it discards exactly the information the profile threw away.
Do I need tick data to build one?
For an accurate profile, yes. The volume needs allocating to the prices it actually traded at, which requires intraday or tick data. What is commonly built from daily bars instead spreads each session’s volume across its high-low range, which is an approximation and a fairly rough one on a session with a wide range. It is usable for a general picture and should not be quoted to the cent.
Is a profile a support and resistance tool?
It is used as one, and the mechanism is the same coordination effect that makes pivot points and Fibonacci levels behave: a level where a great deal traded is a level many participants have a position at, and their orders cluster near it. That is real and it is weaker than a rule. Treat a shelf as a place where a question will be asked, and read the volume on the day price returns to it for the answer.