Volume Profile with Delta [TradeMaster Lite]

29 ก.ค. 2023

The indicator estimates and displays the total traded volume and it's delta** at each price level during the user-defined period. It can be used to identify key support and resistance levels, determine logical take profit and stop loss levels, identify balanced and unbalanced markets and determine trend strength. The indicator offers different approaches to visualize the volume profile and can be chosen based on your preferred trading strategy and analysis method. The position and size of the Volume Profile is fully customizable, it can even be flipped if needed!

Three different display types (cosmetic effect only):

• Classic
  
• Compact
  
• Modern
  

The Lite version offers three different range types:

• Visible Range: displays the volume profile for the visible range of bars or candles on the chart. It adjusts dynamically as you change the chart view making it ideal for the modern trader who values both precision and simplicity.
  
• Open End: displays the volume profile from a specific start date without a defined end, including real delta data. It provides an overview of the volume activity across all price levels of the examined period.
  
• Fixed End: lets you define a specific start and end point for the volume profile. It can be useful if you want to analyze the volume activity within a specific time period or price range.
  

👉Usage

The Volume Profile is a histogram that shows the estimated trading volume at certain price levels, how much was sold and how much was bought of the asset. The longer the histogram, the greater the trading volume at that price level. The Delta estimates which side was dominant at that price level and by how much.

To make the most out of the indicator, you can look for

• pullbacks to high volume nodes or value areas,
  
• initial equilibrium pullbacks,
  
• buy or sell opportunities for price reversals,
  
• institutional order flow.
  

The largest histogram node is called the Point of Control (POC). It is the estimated real market price of a coin. There's a common belief that when the price is above this point, the market sentiment is bullish, and when it's below, the sentiment turns bearish. It can act as a strong support if the price is above it and as strong resistance if the price is below it.
Price action usually finds the most support and resistance and the edge of the high volume areas. The indicator can mark these as VAH and VAL (Value Area High and Low).
In addition to the indication of support and resistance zones, the volume profile can also be used to infer the speed of price movements. At levels where there is little trading volume, faster and more volatile price movements are expected. In such scenarios the price may fall or rise faster to the next high volume zone.


👉General advice

Confirming Signals with other indicators:
As with all technical indicators, it is important to confirm potential signals with other analytical tools, such as support and resistance levels, as well as indicators like RSI, MACD, and volume. This helps increase the probability of a successful trade.

Use proper risk management:
When using this or any other indicator, it is crucial to have proper risk management in place. Consider implementing stop-loss levels and thoughtful position sizing.

Combining with other technical indicators:
The indicator can be effectively used alongside other technical indicators to create a comprehensive trading strategy and provide additional confirmation.

Keep in Mind:
Thorough research and backtesting are essential before making any trading decisions. Furthermore, it's crucial to have a solid understanding of the indicator and its behavior. Additionally, incorporating fundamental analysis and considering market sentiment can be vital factors to take into account in your trading approach.

Limitations:

• The Lite version shows simple delta with current timeframe volume data.
  
• The indicators within the TradeMaster Lite package aim for simplicity and efficiency, while retaining their original purpose and value. Some settings, functions or visuals may be simpler than expected.
  

**The Delta estimates which side was dominant at that price level and by how much. It is the difference between bull and bear volume of the candle.


⭐ Conclusion

We hold the view that the true path to success is the synergy between the trader and the tool, contrary to the common belief that the tool itself is the sole determinant of profitability. The actual scenario is more nuanced than such an oversimplification. Our aim is to offer useful features that meet the needs of the 21st century and that we actually use.

🛑Risk Notice:
Everything provided by trademasterindicator – from scripts, tools, and articles to educational materials – is intended solely for educational and informational purposes. Past performance does not assure future returns.