Market Structure Volume Distribution
Apr 9, 2024
The Market Structure Volume Distribution tool is an essential asset for traders aiming to discern the strength behind market structure breaks within specific price ranges. This tool enhances the visual analysis of the forces between bullish and bearish trends, allowing traders to measure these dynamics effortlessly.
How to Use the Market Structure Volume Distribution Tool?
This comprehensive tool includes three primary features: market structure highlighting, grid levels, and volume profile. Each element of the tool plays a crucial role in providing insights into trading strategies.
Understanding Market Structure
Market structure revolves around the concept of swing points, which are pivotal in determining market trends. Traders have the flexibility to define the period of swing points, enabling identification of both short-term and long-term market structures. When the price breaks a prior swing point, it signifies a market structure occurrence.
The tool intuitively plots lines that confirm market structures, using green for bullish market structures and red for bearish structures. This color coding facilitates an immediate understanding of market trends.
Utilizing Grid Levels
The Grid feature divides the price range, visible within the tool's execution window, into equally sized rows, customizable up to 100 rows. This visual division assists traders in clearly identifying execution windows and associating breakout market structures (BoMS) with corresponding rows on the volume profile.
Additionally, by partitioning the price range into equal parts, the Grid feature provides automatic support and resistance levels, enhancing strategic planning for trading. It serves as a visual aid to instantly link MS with their respective rows within the profile, offering potential support and resistance indicators.
Exploring Volume Profile
The Volume Profile feature delivers an accessible visual representation of volume behind each market structure, aggregated by rows and differentiated into buy and sell volumes. This functionality aids traders in swiftly identifying liquidity associated with market structure events at specific price ranges and discerning areas with the most trading activity.
Detailed Settings for Customizing the Tool
Data Gathering Options
- Execute on all visible range: Activating this option utilizes all visible bars for calculations, disabling the subsequent "Execute on the last N bars" parameter. Default is false.
- Execute on the last N bars: This utilizes the last N bars for calculations, operational only when "Execute on all visible range" is disabled. Acceptable values range from 20 to 5000, with a default of 500.
- Pivot Length: Defines the number of bars used to confirm a pivot, with larger values detecting fewer market structure breaks. Values range from 1, with a default of 2.
Configuring the Profile
- Profile Rows: Specifies the number of rows in the volume profile, ranging from 2 to 100, with a default of 10.
- Profile Width: Determines the maximum width for the volume profile, with values from 25 to 500, defaulting at 200.
- Profile Mode: Selects how volume is displayed per row, with "TOTAL VOLUME" aggregating buy and sell volume, while "BUY&SELL VOLUME" separates them. Default is BUY&SELL VOLUME.
Designing Your Style
- Buy Color: Sets the color for buy volume when "BUY&SELL VOLUME" mode is active. Default is green.
- Sell Color: Sets the color for sell volume in "BUY&SELL VOLUME" mode. Default is red.
- Show dotted grid levels: Optionally displays dotted grid levels within the grid. Default is true.
FAQ
How do I access the Market Structure Volume Distribution tool? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
What is the significance of the grid feature? The grid serves as a visual tool to pinpoint execution windows and provides automatic support and resistance levels, facilitating strategic decisions during trading.
Can I customize the market structure settings? Yes, the tool allows users to define swing point periods and pivot lengths, enabling personalized market structure analysis.
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