Volume profile, explained.

A normal volume histogram sits under the chart, one bar per candle, and tells you when volume traded. A volume profile sits on the price axis, one bar per price level, and tells you where it traded. Long bars mark prices where a lot of business was done; short bars mark prices the market moved through quickly.

The idea comes from auction market theory, closely linked to market profile work developed at the Chicago Board of Trade. The market is seen as an auction searching for a price where buyers and sellers are both willing to trade. Prices that attract a lot of volume are accepted as fair; prices that attract little are rejected.

A profile can cover one session, several sessions combined (a composite), or the visible range of the chart. The period you choose changes the levels, so it should match the timeframe you trade.

• Point of control (POC). The single price with the most volume in the period. It is the market's best estimate of fair value for that period, and price often returns to it.
• Value area. The range of prices around the POC where most of the volume traded. By convention it is set at about 70 percent of the period's volume, roughly one standard deviation, although many platforms let you change it.
• Value area high and low (VAH and VAL). The upper and lower edges of the value area. They are among the most watched levels in profile trading.
• High volume nodes (HVN). Bulges in the profile where a lot traded. Price tends to slow down and rotate in these areas.
• Low volume nodes (LVN). Gaps in the profile where little traded. Price tends to move through them quickly, and they often act as the boundary between two areas of value.

Open in relation to value. Many traders start the day by asking where price opens compared with the previous session's value area. An open inside value suggests a balanced, rotational day is more likely. An open outside value raises the question of whether the market will accept the new prices or return to the old range.

The value area rule. A common idea in profile trading is that if price moves back inside the prior value area and holds there, it often travels to the other side of it. It is a tendency, not a law.

Low volume nodes as targets and stops. Because price tends to move through LVNs quickly, traders use them as targets once a level breaks, and avoid placing stops right inside them.

Naked POCs. A previous session's POC that price has not yet revisited is sometimes watched as a magnet.

Profile shapes. A balanced, bell-shaped profile (often called D-shaped) shows two-sided trade. A P-shaped profile, fat at the top, often appears when short sellers cover in a rally. A b-shaped profile, fat at the bottom, often appears in long liquidation. A thin, elongated profile shows a trend day with little agreement on value.

Illustrative routine, not a trading rule. A simple way to put a profile to work is to prepare three or four levels before the session starts and let price come to them.

• Mark the prior session's value area high, value area low and POC. These are the main reference prices for the day.
• Note any obvious low volume nodes between them, or just outside, where price may travel quickly.
• Check where price is trading before the open. Inside the prior value area points to a rotational day; outside it raises the question of acceptance.
• Plan a reaction, not a prediction. For example: if price opens above value, pulls back to the value area high and holds, that is a sign the higher prices are being accepted. If it falls back inside and holds there, the other side of value becomes the obvious target.

As the session develops, its own profile starts to form. Watching the developing POC migrate higher or lower through the day is another way to see which side is building value.

• Volume quality varies. Futures have a central exchange and a full volume count. Spot forex and spot metals do not, so their volume comes from a data provider and is a partial measure of the whole market. Crypto volume is spread across venues.
• Period choice matters. A POC from a single morning and a POC from a month of data are different levels for different traders.
• Levels need confirmation. A profile shows where volume traded, not what will happen next. Traders usually wait for price to react at a level, sometimes using delta or the footprint to judge that reaction.

Volume profile is one of the indicators on the Mizora Pro chart, next to VWAP, volume, EMA 20 and 50, Bollinger Bands and Ichimoku. The key-levels panel lists the point of control alongside VWAP and ATR 14, so you can see the session's main reference prices at a glance and mark them with the horizontal level tool (H). Set a price alert on the value area edge and the server will tell you when it is reached, even with the browser closed.

The separate order flow workspace, with the footprint, delta and heatmap, is in Beta and modelled from live prices, not exchange depth. You can practise all of it on a free $50K practice account. Mizora Pro accounts trade simulated capital.