Volume Profile Vision

Volume Profile Vision - Complete Description

Overview
Volume Profile Vision (VPV) is an advanced volume profile indicator that visualizes where trading activity has occurred at different price levels over a specified time period. Unlike traditional volume indicators that show volume over time, this indicator displays volume distribution across price levels, helping traders identify key support/resistance zones, fair value areas, and potential reversal points.

What Makes This Indicator Original
Volume Profile Vision introduces several unique features not found in standard volume profile tools:

Dual-Direction Histogram Display:
Unlike conventional volume profiles that only show bars extending in one direction, VPV displays volume bars extending both left (into historical candles) and right (as a traditional histogram). This bi-directional approach allows traders to see exactly where historical price action intersected with high-volume nodes.

Real-Time Candle Highlighting: The indicator dynamically highlights volume bars that intersect with the current candle's price range, making it immediately obvious which volume levels are currently in play.

Four Professional Color Schemes: Each color scheme uses distinct gradient algorithms and visual encoding systems:

Traffic Light: Uses red (POC), green (VA boundaries), yellow (HVN), with grayscale gradients outside the value area
Aurora Glass: Modern cyan-to-magenta gradient with hot magenta POC highlighting
Obsidian Precision: Professional dark theme with white POC and electric cyan accents
Black Ice: Monochromatic cyan family with graduated intensity


Adaptive Transparency System: Automatically adjusts bar transparency based on position relative to value area, with special handling for each color scheme to maintain visual clarity.

Core Concepts & Calculations
Volume Distribution Analysis
The indicator divides the visible price range into user-defined price levels (default: 80 levels) and calculates the total volume traded at each level by:

Scanning back through the specified lookback period (customizable or visible range)
For each historical bar, determining which price levels the bar's high/low range intersects
Accumulating volume for each intersected price level
Optionally filtering by bullish/bearish volume only

Point of Control (POC)
The POC is the price level with the highest traded volume during the analyzed period. This represents the "fairest" price where most traders agreed on value. The indicator marks this with distinct coloring (red in Traffic Light, magenta in Aurora Glass, white in Obsidian Precision, cyan in Black Ice).
Trading Significance: POC acts as a strong magnet for price - markets tend to return to fair value. When price is away from POC, traders watch for:

Mean reversion opportunities when price is far from POC
Rejection signals when price tests POC from above/below
Breakout confirmation when price breaks through and holds beyond POC

Value Area (VA)
The Value Area encompasses the price range where a specified percentage (default: 68%) of all volume traded. This represents the range of "accepted value" by market participants.
Calculation Method:

Start at the POC (highest volume level)
Expand upward and downward, adding adjacent price levels
Always add the level with higher volume next
Continue until accumulated volume reaches the VA percentage threshold

Value Area High (VAH): Upper boundary of accepted value - acts as resistance
Value Area Low (VAL): Lower boundary of accepted value - acts as support
Trading Significance:

Price spending time inside VA indicates market equilibrium
Breakouts above VAH suggest bullish momentum shift
Breakdowns below VAL suggest bearish momentum shift
Returns to VA boundaries often provide high-probability entry zones

High Volume Nodes (HVN)
Price levels with volume exceeding a threshold percentage (default: 80%) of POC volume. These represent areas of strong agreement and consolidation.
Trading Significance:

HVNs act as strong support/resistance zones
Price tends to consolidate at HVNs before making directional moves
Breaking through an HVN often signals strong momentum

Low Volume Nodes (LVN)
Price levels within the Value Area with volume ≤30% of POC volume. These are zones price moved through quickly with minimal consolidation.
Trading Significance:

LVNs represent areas of rejection - price finds little acceptance
Price tends to move rapidly through LVN zones
Useful for setting stop-losses (below LVN for longs, above for shorts)
Can identify potential gaps or "air pockets" in the market structure

Grayscale POC Detection
A secondary POC detection system identifies the highest volume level outside the Value Area (with a 2-level buffer to avoid confusion). This helps identify significant volume accumulation zones that exist beyond the main value area.
How to Use This Indicator
Setup

Choose Lookback Period:

Enable "Use Visible Range" to analyze only what's on your chart
Or set "Fixed Range Lookback Depth" (default: 200 bars) for consistent analysis


Adjust Profile Resolution:

"Number of Price Levels" (default: 80) - higher = more granular analysis, lower = broader zones


Select Color Scheme:

Traffic Light: Best for clear POC/VA/HVN identification
Aurora Glass: Modern aesthetic for dark charts
Obsidian Precision: Professional trader preference
Black Ice: Minimalist single-color family



Visual Customization

Left Extension: How far back the left-side histogram extends into historical candles (default: 490 bars)
Right Extension: Width of the traditional histogram bars on the right (default: 50 bars)
Right Margin: Space between current price bar and histogram (default: 0 for flush alignment)
Left Profile Gap: Space between left-side histogram and candles (default: 0)

Trading Strategies
Strategy 1: Value Area Mean Reversion

Wait for price to move outside the Value Area (above VAH or below VAL)
Look for rejection signals (wicks, bearish/bullish candles)
Enter trades toward the POC
Take profits as price returns to POC or opposite VA boundary

Strategy 2: Breakout Confirmation

Identify when price is consolidating within the Value Area
Wait for a strong close above VAH (bullish) or below VAL (bearish)
Enter on the breakout or on first pullback to the VA boundary
Target previous HVNs or swing highs/lows outside the VA

Strategy 3: POC Support/Resistance

Watch for price approaching the POC level
If approaching from below, look for bullish reversal patterns at POC (support)
If approaching from above, look for bearish reversal patterns at POC (resistance)
Trade in the direction of the bounce with stops beyond the POC

Strategy 4: LVN Fast Movement Zones

Identify LVN zones within the Value Area (marked with "LVN" label)
When price enters an LVN, expect rapid movement through the zone
Avoid entering trades within LVNs
Use LVNs as confirmation of directional momentum

Alert System
The indicator includes 7 customizable alert conditions:

POC Touch: Alerts when price comes within 0.5 ATR of POC
VAH/VAL Touch: Alerts at Value Area boundaries
VA Breakout: Alerts on breakouts above VAH or below VAL
HVN Touch: Alerts when price contacts High Volume Nodes
LVN Entry: Alerts when entering Low Volume zones
POC Shift: Alerts when POC moves to a new price level

Reading the Profile
Price Labels (shown on the right side):

POC: Point of Control - highest volume price level
VAH: Value Area High - upper boundary of accepted value
VAL: Value Area Low - lower boundary of accepted value
LVN: Low Volume Node - expect fast movement through this zone

Color Intensity Interpretation:

Brighter colors = higher volume concentration
Dimmer colors = lower volume
Abrupt color changes = transition between volume zones
Gaps in the histogram = price levels with no trading activity

Technical Details
Volume Accumulation Logic:
For each bar in lookback period:
For each price level:
If bar's high/low range intersects price level:
Add bar's volume to that price level's total
Gradient Algorithm:

Traffic Light: Dual-range piecewise gradient (0-50% and 50-100% volume intensity)
Aurora Glass: Linear cyan-to-magenta interpolation
Obsidian Precision: Dark blue gradient with cyan highlights
Black Ice: Three-stage cyan intensity progression

Real-Time Updates:
The profile recalculates on every bar, including real-time tick data, ensuring the volume distribution always reflects current market structure.
Best Practices

Timeframe Selection: Use higher timeframes (4H, Daily) for swing trading, lower timeframes (5min, 15min) for day trading
Combine with Price Action: Volume profile shows WHERE, price action shows WHEN
Multiple Timeframe Analysis: Check daily VP for major levels, then drill down to intraday for entries
Volume Type Selection: Use "Bullish" volume in uptrends, "Bearish" in downtrends, or "Both" for complete picture
Adjust VA Percentage: 68% (default) captures one standard deviation; try 70% for tighter or 60% for broader value areas

Performance Notes

Maximum bars back: 5000 (handles deep historical analysis)
Maximum boxes: 500 (handles complex profiles)
Optimized calculation: Only recalculates on last bar for efficiency
Real-time capable: Updates as new ticks arrive