Volume Profile histogram has a few basic shapes it can develop into. Their names are based on their looks. We have the âb-shaped profileâ which is shaped like a letter âbâ, we have a âD-shaped profileâ, which looks like the capital letter D, there is also the âp-shaped profileâ which looks like the letter âpâ, etcâĶ
I talked more in detail about those in the Volume Profile For Beginners Guide.
Today, I would like to talk about the âDouble-distributionâ profile.
The main feature of this profile shape is that it has two significant volume areas. One at the top, and one at the bottom.
âDouble distributionâ â âD-shapedâ profile
The âDouble-distributionâ profile very often turns into a âD-shapedâ profile. This means that the thin Volume area which is in between of the two heavy volume areas gets filled with volumes.
In order for this to happen, the price needs to react to the two heavy volume areas and bounce off them inwards â towards the center of the âDouble-distributionâ profile.
The price has a tendency to stay in that center. This is when the heavy volumes get placed there and the âDouble-distributionâ starts to turn into a âD-shaped profileâ.
How to profit on the âDouble-distributionâ profile?
Since the âDouble-distributionâ tends to transform into âD-shapedâ profile, the two heavy volume areas at the top and at the bottom work as Support and Resistance zones. From there the price tends to go inwards towards the center.
Thatâs how you trade the âDouble-distributionâ Volume Profile shape: Short from the upper volume zone, and Long from the lower volume zone.
I hope you guys liked this article! Let me know what you think in the comments below.
Happy trading!
-Dale
I talked more in detail about those in the Volume Profile For Beginners Guide.
Today, I would like to talk about the âDouble-distributionâ profile.
The main feature of this profile shape is that it has two significant volume areas. One at the top, and one at the bottom.
âDouble distributionâ â âD-shapedâ profile
The âDouble-distributionâ profile very often turns into a âD-shapedâ profile. This means that the thin Volume area which is in between of the two heavy volume areas gets filled with volumes.
In order for this to happen, the price needs to react to the two heavy volume areas and bounce off them inwards â towards the center of the âDouble-distributionâ profile.
The price has a tendency to stay in that center. This is when the heavy volumes get placed there and the âDouble-distributionâ starts to turn into a âD-shaped profileâ.
How to profit on the âDouble-distributionâ profile?
Since the âDouble-distributionâ tends to transform into âD-shapedâ profile, the two heavy volume areas at the top and at the bottom work as Support and Resistance zones. From there the price tends to go inwards towards the center.
Thatâs how you trade the âDouble-distributionâ Volume Profile shape: Short from the upper volume zone, and Long from the lower volume zone.
I hope you guys liked this article! Let me know what you think in the comments below.
Happy trading!
-Dale
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