Weighted Volume Profile
Jul 5, 2024
The Weighted Volume Profile indicator renders a volume profile based on the trading activity of recent candlesticks, allowing users to apply time-based weighting to prioritize past or current volume data. This tool provides a dynamic view of market interest and liquidity by identifying significant price levels where the highest volume concentration occurs.
Usage
The Weighted Volume Profile is used to identify high-volume nodes and the Point of Control (POC) within a specific lookback period. Traders can utilize the profile to spot support and resistance zones based on historical or recent participation.
- Standard Analysis: Use the "Normal" weighting to view a standard volume profile over the selected "Analyze Bars" period.
- Recent Weighting: Prioritize volume from the most recent bars. This is useful for identifying emerging price levels that are gaining significance in current market conditions.
- Past Weighting: Prioritize volume from the beginning of the lookback period to focus on older, established value areas that may still act as institutional benchmarks.
- POC Interpretation: The Point of Control line (the row with the highest total volume) acts as a primary level of interest. Price crossing or rejecting this line often signals a shift in market sentiment or a continuation of a trend.
Details
The indicator constructs a histogram by dividing the price range (from the highest high to lowest low within the lookback period) into a user-defined number of rows. For every candlestick in the lookback:
- The volume is distributed across the price rows it occupies.
- The volume is categorized as bullish or bearish based on the candle's close relative to its open.
- If a weighting mode is active, a decay function is applied. For "Recent" weighting, volume from older bars is penalized linearly, while "Past" weighting does the opposite.
Settings
General Configuration
- Analyze Bars: Determines the total number of historical bars included in the profile calculation.
- Row Count: Sets the vertical resolution of the profile by dividing the price range into a specific number of rows.
- Volume Weighting: Selects the weighting method (Recent, Normal, or Past) to adjust the influence of volume over time.
Style
- Align To: Controls whether the profile is anchored to the left or right side of the chart.
- POC Line: Toggles the visibility, style, width, and color of the Point of Control line.
- Bullish/Bearish Colors: Customizes the colors used for the volume bars representing upward and downward price movement.
FAQ
How do I access the Weighted Volume Profile?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
What is the difference between "Recent" and "Normal" weighting?
"Normal" weighting treats all volume equally regardless of when it occurred. "Recent" weighting applies a penalty to older volume, making the profile more reactive to the latest price action.
Can I use the POC line for automated alerts?
Yes, the script includes built-in alert conditions that trigger when the price crosses the Point of Control level.
Trading & investing are risky and many will lose money in connection with trading and investing activities. All content on this site is not intended to, and should not be, construed as financial advice. Decisions to buy, sell, hold or trade in securities, commodities and other investments involve risk and are best made based on the advice of qualified financial professionals. Past performance does not guarantee future results.
Hypothetical or Simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, including, but not limited to, lack of liquidity. Simulated trading programs in general are designed with the benefit of hindsight, and are based on historical information. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.
Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
As a provider of technical analysis tools and strategies, we do not have access to the personal trading accounts or brokerage statements of our customers. As a result, we have no reason to believe our customers perform better or worse than traders as a whole based on any content, tool, or platform feature we provide.
Charts used on this site are by TradingView in which the majority of our technical indicators are built on. TradingView® is a registered trademark of TradingView, Inc. www.TradingView.com TradingView® has no affiliation with the owner, developer, or provider of the Services described herein.
Market data is provided by CBOE, CME Group, BarChart, Massive, CoinAPI. Select U.S. equities data is provided through Massive. CBOE BZX real-time U.S. equities data is licensed from CBOE and provided through BarChart. Real-time futures data is licensed from CME Group and provided through BarChart. Select cryptocurrency data, including major coins, is provided through CoinAPI. All data is provided “as is” and should be verified independently for trading purposes.
This does not represent our full Disclaimer. Please read our full disclaimer.
© 2026 LuxAlgo Global, LLC.