Mastering the Fixed Range Volume Profile

Mastering the Fixed Range Volume Profile: A Complete Guide

If you’re a trader looking to deepen your understanding of market movements, volume is one of the most critical components you can study. In a recent tutorial, TradingView walked us through one of their most powerful drawing tools: the Fixed Range Volume Profile (FRVP).

Whether you are analyzing Bitcoin, the S&P 500, or any other asset class, this tool allows you to see exactly where the most trading volume has occurred within a specific timeframe. Here is a breakdown of how to use it and why it matters.

What is the Fixed Range Volume Profile?

Unlike a standard volume bar at the bottom of your chart which shows volume per candle (time), the Volume Profile shows volume per price level.

The “Fixed Range” version is unique because it is a drawing tool. This means you can manually select a specific start point and end point on your chart to calculate the volume profile for that exact period. This gives you granular control over the data you want to analyze.

How to Use It

Using the tool is intuitive:

1. Select the Tool: You can find it in the “Forecasting and Measurement” tools section on the left sidebar of TradingView.
2. Click Start & End: Click once on the chart where you want the analysis to begin (e.g., the start of a trend) and click again where you want it to end (e.g., the current price).
3. Analyze: The tool instantly generates a histogram on your chart, showing volume distribution at different price levels for the selected range.

Key Concepts & Settings

To get the most out of this tool, you need to understand its key components and customization options:

1. Point of Control (POC)

The Point of Control is the specific price level with the highest traded volume within your selected range. In the video, this is often highlighted as a distinct line (e.g., red or yellow). This level acts as a significant reference point for traders, often functioning as support or resistance.

2. Value Area (VA)

The Value Area represents a specific percentage of the total trading volume.

• Default: It usually defaults to 70% or 75%, meaning the shaded region contains the bulk of the trading activity.
• Customization: You can adjust this in the settings. For example, setting it to 10% will show a very narrow band where the absolute highest volume occurred, while 80% will give you a broader view of the market’s acceptance.

3. Rows vs. Ticks

In the “Inputs” settings, you can define how the volume bars (rows) are calculated:

• Rows: Sets a specific number of horizontal bars to represent the data.
• Ticks Per Row: Offers a more granular view based on the number of price ticks per bar. Increasing this number zooms in on the data, while decreasing it aggregates it.

4. Visual Styles

You can toggle features like Up/Down Volume to see buying vs. selling pressure within the profile bars. You can also enable “Developing POC” or “Developing Value Area” lines to see how these key levels shifted over time as price action unfolded.

Why Use Multiple Profiles?

One of the most powerful features demonstrated is the ability to draw multiple Fixed Range Volume Profiles on the same chart.

For instance, you can measure the volume profile of a previous consolidation range and compare it to the current price action. In the video example, a profile drawn from September showed a Point of Control at the same level as a profile drawn from August, indicating a heavy “battleground” for price at that specific level.

Conclusion

The Fixed Range Volume Profile is more than just a fancy indicator; it’s a way to see the “why” behind price movements. by understanding where the majority of transactions are taking place, you can make more informed decisions about potential support, resistance, and breakout levels.

Give it a try on your next chart analysis—start small, maybe on a 5-minute chart, and see if the Point of Control lines up with your trade ideas!

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Disclaimer: This blog is for training and learning purpose only.

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