VolumeProfileIndicator:The“Unfair”AdvantageVolumeindicatorsVolumeProfileshowsthepricewherethesecuritywasmosttraded.Ittakesagivenrangeforcomputation(eithervisibleorfixed).Themorevolumetradedatagivenprice,thebiggertheVolumeProfilebarwillbe.Whatyou'lldiscoverinthisarticle++show++1WhatistheVolumeProfileindicator?2WhatisVolume?3Howdoesindicatorwork?4TypesofVolumeProfile5ThevariousshapesofVolumeProfile6TerminologiesassociatedwithVolumeProfile7VolumeProfilerules8ConclusionWhatistheVolumeProfileindicator?VolumeProfileisanadvancedchartingstudyandindicator.Itshowsthetradedvolumeamountofanassetoveraspecifiedperiod,atcertainpricelevels.VolumeProfilemakesuseofprevioustradedvolumeandallthestrategiesandplansarebroughtfromhistoricaldata.Tradersfocusontheregionswhereareversalcouldoccurwithvolumeprofile.Somepeoplebelievethatvolumeprofileanalysisprovidestraderswithan“unfair”advantageasaresultofmarketcontextandthatinstitutionsandbanksusesuchstrategies.WhatisVolume?Volume,alsoreferredtoasvolumeoftrade,givesthetotalnumberofsharesorstockstradedforaspecificsecurity.Volumeindicatestheamountoftransactionsthatcarriedout.Asaresult,itcanalsomeasuretheliquidityofsecurity.Asecurityisconsideredactiveorliquidwhenvolumesarehigh.Howdoesindicatorwork?Thevolumeprofilecancomeinanyshapedependingonthedistributionofvolumes.Itdrawsbyusinghorizontallinestoformahistogram.Themorethevolumetradesatagivenlevel,thebiggertheprofilebecomes.Thevolumeprofileisusuallylocatedattherightsideofthechartbesidethepricelevels.Itisrepresentedwithbars.Thevolumeprofilebarsarecreatedbygettingtotalvolumetradedataprice,inagiventime.Thetotalbuyisthendivided,andvolumessoldrepresentingitonahistogramchart.Traderscanunderstandandusethevolumeprofileindicatorasoneoftheimportanttoolsamongalltheirtechnicalanalysistools.TypesofVolumeProfileTherearethreedifferentkindsofvolumeprofileusedintrading.Thereisnotsomuchdifferenceinthewaytheyalloperate.Thedifferencesthatexistamongstthemarethewaytheyappearonthechartandtheeaseofaccesstovolumeprofileonthe