Fixed Range Volume Profile

The Fixed Range Volume Profile indicator provides a visual distribution of transaction volume across specific price levels over a set lookback period, helping traders identify key supply and demand zones.

Usage

The Usage section describes how the script can be used to analyze market structure. By plotting volume on the vertical axis (price), the indicator highlights areas of high and low liquidity.

• Support and Resistance: The Point of Control (POC), represented by the longest volume bar, serves as the most significant price level where the highest volume was traded. It often acts as a powerful magnet or a pivot for price action.
• High Volume Nodes (HVN): These are price levels with significant trading activity. Prices often stabilize or consolidate around these zones, making them reliable areas for identifying strong support or resistance.
• Low Volume Nodes (LVN): These represent price gaps where very little trading occurred. Markets tend to move quickly through these areas, which can be used to anticipate "gap movements" or fast breakouts.
• Trend Determination: If volume distribution is concentrated above the current price, it may indicate a collection section. Conversely, if volume is driven below, it suggests a distribution phase within a downtrend.
• Entry and Exit Strategies: Traders may look to enter long positions near an HVN if the price shows signs of support, while a break through an LVN may signal a momentum trade toward the next HVN.

Details

The indicator calculates the cumulative volume for specific "bins" or price segments within a defined lookback period.

• Point of Control (POC): The price level with the highest total volume.
• Value Area (VA): Although not explicitly highlighted as a box, the volume distribution allows users to visually identify where approximately 70% of the volume is concentrated (Value Area High to Value Area Low).
• Delta Approximation: When enabled, the script approximates buying and selling pressure based on candle direction. Green bars signify a buying advantage, while red bars signify a selling advantage within that price segment.
• Dynamic Visuals: The script updates labels and lines in real-time on the right side of the chart, ensuring the most recent volume data is always accessible without cluttering historical price action.

Settings

General Settings

• Lookback bars: Sets the number of historical bars used to calculate the volume distribution (min: 50, max: 5000).
• Levels (total): Determines how many volume labels are displayed vertically around the current price.
• Price bins: Adjusts the granularity of the profile; more bins result in finer price segments.
• Shift right (bars): Controls the horizontal offset of the labels from the most recent candle.
• Max/Min opacity: Adjusts the visual transparency of the volume bars based on their relative strength.
• Use candle delta approx: When enabled, colors the volume blocks based on whether the price closed higher (bullish) or lower (bearish) during the volume accumulation.

FAQ

How do I use the POC for trading? The POC (Point of Control) is the price level with the most significant trading activity. It is often used as a target for mean reversion or as a breakout level for trend continuation.

What does a Low Volume Node (LVN) signify? An LVN signifies a price range where transactions were sparse. Prices often "zip" through these levels because there is a lack of historical interest to provide support or resistance.

How can I access this indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.