Volume Profile / Fixed Range

The Volume Profile / Fixed Range indicator calculates and visualizes volume distribution over a specified lookback period to identify high-activity price levels and the Point of Control (POC).

Usage

The Usage section describes how the script can be used to identify key liquidity zones and market sentiment within a fixed historical range. Traders can use this tool to determine where the majority of trading activity has occurred, helping to identify potential support and resistance levels.

• Point of Control (POC): The indicator highlights the price level with the highest traded volume. This often acts as a magnet for price or a significant pivot point.
• Value Area (VA): The script identifies the price range where a specified percentage of the total volume took place (default is 70%). Trading within this area suggests market balance, while breakouts from this area may indicate new trends.
• Buy/Sell Volume Split: Each row in the profile displays an approximate breakdown of "Up" (buying) and "Down" (selling) volume, providing insight into the aggressive side of the market at specific price levels.

Details

The script utilizes the box.new() feature to render the volume profile bars dynamically on the chart. Since traditional volume data does not always specify buy or sell intent, this script approximates these values by analyzing candle structure (body vs. wicks).

The calculation process involves:

1. Determining the highest and lowest price within the user-defined "Number of Bars."
2. Dividing this vertical range into a set number of rows (Row Size).
3. Allocating the volume of each candle within the range to the corresponding price rows.
4. Calculating the Point of Control by finding the row with the maximum total volume and expanding outward to determine the Value Area.

Settings

General Settings

• Number of Bars: Specifies the historical lookback period (up to 500 bars) for the volume calculation.
• Row Size: Determines the vertical granularity by setting the number of price rows in the profile.
• Value Area Volume %: The percentage of total volume used to calculate the Value Area (typically set to 70%).

Visuals & POC

• POC Color: Sets the color of the Point of Control line and label.
• Width: Adjusts the thickness of the POC line.
• Show POC Label: Toggles the visibility of the price label for the POC.
• Value Area Up: Color for the buying volume portion within the Value Area.
• Value Area Down: Color for the selling volume portion within the Value Area.
• UP Volume: Color for buying volume outside the Value Area.
• Down Volume: Color for selling volume outside the Value Area.

FAQ

How do I interpret the Point of Control (POC)? The POC is the price level where the most volume was traded. It often serves as a significant level of support or resistance, as it represents the "fairest" price according to market participants during that period.

Why does the volume profile change when I scroll or change timeframes? The profile is calculated based on a fixed "Number of Bars" relative to the most recent candle. If you change timeframes, the historical period covered by those bars changes, leading to a new volume distribution.

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