Weighted Volume Profile Pivot Points

The Weighted Volume Profile Pivot Points indicator automatically renders a volume profile between the most recent price pivots, dynamically adjusting the calculation range as new market structures emerge. By allowing users to weight volume data toward recent or historical bars, the tool provides a unique perspective on which price levels currently hold the most market significance.

Usage

The indicator identifies critical price ranges and calculates the distribution of volume within them. It is primarily used to identify the Point of Control (POC) and high/low volume nodes within a specific market context (swings or order blocks).

• Pivoting Modes: Users can choose between standard "Pivots" (based on swing highs/lows over a set length) or "Order Blocks" mode, which sets the profile range between the latest buy-side and sell-side institutional activity zones.
• Volume Weighting: This unique feature allows you to prioritize the "Recent" price action, giving more statistical weight to the latest candlesticks, or "Past" action to emphasize older price levels.
• Support & Resistance: The POC line generated by the script serves as a high-liquidity benchmark, often acting as a magnet or a rejection level for future price action.

Details

The script executes through a multi-step process:

1. Scanning: It analyzes a user-defined number of bars back to identify the most recent significant pivots or order blocks.
2. Segmentation: The vertical range between these points is divided into a configurable "Row Count."
3. Weighting Logic: If weighting is applied, volume is penalized based on its distance from the current bar using a decay formula.
4. Categorization: Volume is split into bullish and bearish components based on bar polarity, allowing for a detailed look at the internal delta of the profile.

Settings

General Configuration

• Mode: Selects the method for range detection (Pivots or Order Blocks).
• Analyze Bars: Determines the total historical lookback for the indicator.
• Row Count: Controls the granularity of the volume histogram.
• Volume Weighting: Choose between Recent, Normal, or Past to shift the profile's sensitivity.
• Swing Length: Sets the lookback period for identifying high and low pivots.
• Keep Past POC Lines: When enabled, historical POC levels remain on the chart for reference.

Style

• Align To: Adjusts the profile to the left or right side of the specified range.
• POC Line Style: Customizes the visual appearance (color, width, style) of the Point of Control.
• Bullish/Bearish Color: Sets the colors for the buying and selling volume within the histogram rows.

FAQ

How do I interpret the Point of Control (POC)? The POC is the price level with the highest volume in the range. It represents the most "fair" price where the most trading occurred and often acts as a significant support or resistance level.

What is the benefit of "Recent" Volume Weighting? It helps traders ignore "stale" volume from the beginning of a move, focusing instead on where the most aggressive positioning is happening right now.

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.