Volume profile trading strategy for day traders

A volume profile is a sideways histogram: one bar per price level, sized by the volume that traded there over a session or a chosen range. The longest bar is the point of control (POC). The value area is the band around it that holds roughly 70% of the volume.

Market profile, also called TPO, measures time instead of volume. It counts how many 30 minute periods traded at each price. Both build a POC and a value area, and on most days they land close together. When they differ, volume shows where size changed hands and TPO shows where price spent its time.

Return to value. When the session opens outside the prior day's value area and then trades back inside it, traders look for a move toward the far side of value, with the POC as the first target.

Acceptance outside value. When price breaks out of the value area and keeps building volume beyond it, the market is accepting new prices. Traders look to join pullbacks toward the old value edge instead of fading the break.

Low volume nodes as stops and targets. Thin areas in the profile are prices the market passed through quickly. Price tends to move fast through them again, so they make useful stop locations just beyond, and they mark where a move may run before it meets the next heavy area.

Before the open, mark the prior session's POC, value area high and value area low. During the session, watch the developing profile: is the POC moving with price or staying put? A POC that follows price shows initiative. One that stays behind while price drifts away often means the move lacks participation.

Pair the profile with VWAP and with the higher timeframe trend. A profile level is a place to watch, and the trade still needs a trigger, a stop and a size you can afford to lose.

Profiles are built from the data feed behind the chart, so two platforms can draw a POC a tick or two apart. Treat levels as zones. A profile drawn over a period that mixes very different sessions, like a quiet holiday and an earnings day, blends two auctions and says little about either.

Obelion charts include Monkey Bars, a TPO market profile deep view, on the free plan. The Volume Profile deep view, with the POC, value area and low volume nodes drawn on the chart, is part of the Obelisk plan.