Standard volume bars tell you how much traded during a time period. That's useful, but limited.
Volume profile tells you how much traded at each price level. That's a completely different - and far more actionable - piece of information.
Here's how to read it and why it matters.
What Volume Profile Shows
Instead of vertical bars showing volume per candle, volume profile displays horizontal bars showing volume per price level.
Think of it this way: if you took all the volume from a trading session and organized it by price instead of by time, you'd see where most of the transactions actually occurred.
Some prices see massive volume - these are the levels where buyers and sellers found agreement and transacted heavily. Other prices see almost no volume - price moved through quickly because there was no interest there.
This distinction is powerful because it reveals where institutions actually built positions.
Key Volume Profile Concepts
Point of Control (POC): The price level with the highest volume. This is where the most trading occurred - the "fairest" price where buyers and sellers reached maximum agreement. POC often acts as a magnet; price tends to return to it.
Value Area: The range containing 70% of all volume (typically). This represents where most of the action happened. Price inside the value area is "fair." Price outside is exploring.
Value Area High (VAH): The upper boundary of the value area. Often acts as resistance when approaching from below.
Value Area Low (VAL): The lower boundary of the value area. Often acts as support when approaching from above.
High Volume Nodes (HVN): Price levels with significant volume accumulation. These act as support/resistance because many positions were established there.
Low Volume Nodes (LVN): Price levels with minimal volume. Price tends to move through these quickly - there's no "memory" there, no positions to defend.
How to Trade with Volume Profile
Support and Resistance: HVNs and the POC act as support/resistance levels. Unlike arbitrary lines drawn on charts, these levels have actual transactional evidence behind them.
Breakout Targets: When price breaks through an LVN, it often moves quickly to the next HVN. Low volume areas offer little resistance - price slides through until it hits accumulated positions.
Mean Reversion: Price extended far from the POC tends to snap back. The POC represents "fair value" where the most business was done. Extended moves away from it are often unsustainable.
Trend Confirmation: In healthy trends, the POC migrates in the trend direction. If price is making higher highs but the POC isn't moving up, the trend may be weakening - volume isn't confirming the price movement.
Volume Profile Types
Session Volume Profile: Shows volume distribution for a single trading session. Useful for day traders to identify intraday levels.
Visible Range (VPVR): Shows volume distribution for whatever's visible on your chart. Adjusts as you zoom in/out. Good for seeing the big picture.
Fixed Range: Shows volume distribution for a specific price/time range you define. Useful for analyzing specific moves or consolidations.
Periodic: Shows separate profiles for each day/week/month. Helps identify how value areas shift over time.
Common Volume Profile Setups
Value Area Rejection: Price enters the value area, tests the POC, and gets rejected. Trade in the direction of the rejection with stops beyond the POC.
Value Area Breakout: Price breaks above VAH or below VAL with strong volume. Enter on the breakout or on a retest of the broken level. Target the next HVN.
POC Magnet: Price extended far from POC tends to return. If price is significantly above/below the POC and momentum fades, consider mean reversion toward the POC.
LVN Speed Run: When price enters an LVN, expect fast movement to the next HVN. These are low-resistance zones where price rarely pauses.
Volume Profile Limitations
Volume profile isn't magic. Be aware of these limitations:
Data quality matters: Volume profile is only as good as your data. Different data feeds show different volumes. Use consistent, quality sources.
Context still matters: A POC from six months ago matters less than one from yesterday. Recent profiles are more relevant than ancient ones.
Not predictive: Volume profile shows where volume WAS, not where it WILL BE. It's a map of the past, not a crystal ball.
Can be overwhelming: Too many profiles on one chart creates noise. Use sparingly and purposefully.
The Bottom Line
Volume profile reveals what standard charts hide: where institutional money actually transacted. The POC shows fair value. HVNs show significant levels. LVNs show fast-travel zones.
Volume profile becomes even more powerful when combined with cycle awareness. A POC during accumulation (when smart money is building positions) behaves differently than one during distribution. VWAP levels with standard deviation bands add another dimension - showing not just where volume transacted, but where value was perceived across different time horizons.
Use volume profile to identify real support/resistance, set realistic targets, and understand market structure at a deeper level than price alone reveals.
Janus Atlas calculates Volume Profile across daily, weekly, monthly, quarterly, and yearly periods - displaying POC (Point of Control), VAH (Value Area High), and VAL (Value Area Low) for each. No manual setup required. The levels update at bar close and layer institutional price memory across timeframes.
See volume structure →