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Volume Profile Regression Channel

By LuxAlgoMay 16, 2023

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Volume Profile Regression Channel tilts volume profiling to match the trend: volume is accumulated inside a linear regression channel rather than across a static horizontal range. You pick the left and right time coordinates, the channel fits the enclosed price action and widens until it envelops the full movement, and traded volume is then distributed across angled sections that follow the slope. In directional markets, exactly where flat profiles turn shapeless, the angled read keeps the distribution meaningful.

How to Trade the Volume Profile Regression Channel?

  • Line of Control (LOC): the channel section holding peak volume accumulation, a sloped counterpart to a point of control, watched as support or resistance when price returns to it.
  • Developing LOC: traces how the LOC shifts across the profile, hinting whether heavy trade is migrating with the trend or resisting it.
  • Value area: the sections around the LOC that accumulate your chosen share of total volume outline where the bulk of business was done inside the channel.

One practical limit: very long calculation windows can exhaust the drawing budget and truncate the profile, so shorter intervals keep the picture complete.

Volume Profile Regression Channel Settings

  • Sections: how many slices the channel is divided into for the volume calculation. More sections, finer resolution.
  • Width %: the profile's length as a proportion of the channel's overall length.
  • Value Area %: the share of total section volume the highlighted value area accumulates, starting from the POC.

Frequently Asked Questions

Free on Vela

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Also works on

TradingView
NinjaTrader
Original indicatorBuilt in-house by LuxAlgo

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