Dynamic Volume Trace Profile

The Dynamic Volume Trace Profile indicator projects volume distribution directly onto price action using horizontal trace lines to identify high-activity zones and key liquidity levels.

Usage

The Usage section describes how the script can be used to identify market interest and potential price magnets.

• Identifying Support and Resistance: Use the orange trace line as a primary reference level. As the Point of Control (POC), this level represents the highest volume concentration and often acts as a magnet for price action.
• Assessing Market Liquidity: Intense teal traces indicate high-volume clusters where market acceptance is high. Conversely, faint or transparent gaps suggest low-liquidity zones where price may move rapidly.
• Timeframe Adaptation: Adjust the lookback window to suit different trading styles. Shorter lookbacks are ideal for capturing session-based intraday distributions, while longer lookbacks surface macro-level volume shelves for swing trading.
• Distribution Analysis: Utilize the right-side profile to compare normalized percentages. This helps determine if the current market distribution is top-heavy or bottom-heavy relative to the POC.

Details

The script functions by partitioning the price range between the highest high and lowest low of the recent 100 bars into 25 distinct bins. It then aggregates volume for each bar within the user-defined lookback window based on where the closing price falls relative to these bins.

The visual output is normalized against the maximum recorded volume. This normalization allows for gradient color mapping, where the intensity of the color reflects the relative strength of the volume at that specific price level. The right-hand profile provides a secondary view, displaying absolute volume units alongside a percentage share where the POC is defined as 100%.

Settings

• LookBack: Sets the number of historical bars used to calculate the volume distribution.
• Dynamic Volume Traces: Toggles the visibility of the on-chart horizontal trace lines.
• Dynamic Bins Color: Sets the base color used for the volume gradient traces.
• Width: Adjusts the thickness of the dynamic trace lines.
• Max Volume Trace: Toggles the specific highlighting of the Point of Control (POC) level.
• POC Color: Sets the color used to distinguish the POC from other volume bins.

FAQ

How do I interpret the color gradients in the Dynamic Volume Trace Profile? The gradients represent relative volume. A more intense color indicates higher historical traded activity at that level, while more transparent lines indicate lower volume zones.

What is the significance of the orange line? The orange line (or your chosen POC color) represents the Point of Control, which is the price bin with the highest total volume within the specified lookback period.

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