Volume Profile And Order Flow Analysis

Posted by on May 22, 2016 in Blog

I created this video to explain volume profile and order flow analysis together to find better trading opportunities. This video is more on volume profile and less on order flow though.

To me volume is more important than time. You can spend a lot of time in an area but that may be because the market is consolidating ahead of an economic release or a Fed announcement. As you can see volume shows a much better picture of support and resistance. No can we use this during the
intra-day time frame.. well yes, most traders including me will look for these areas to be traded during the day and trade off them accordingly. But can this information be used in other ways to help us trade the intra-day time frame. Again yes and very effectively when you know how to use it.Volume profile and order flow analysis can be used for trading anything on an organized exchange or over the counter. Because the volume profile reflects the underlying nature of markets, which does not differ fundamentally from one market to another, the same basic methods can be applied no matter what futures contract or commodity is being bought or sold. Volume profile and order flow analysis work great together by providing necessary volume information at key areas, thus allowing for much better timing of your trades and trade location.

Volume profile is a vertical bell curve graphic on a chart that shows the developing market dynamics of price and volume over time. It organizes what is otherwise chaotic price movement and provides the trader with a means to determine where and how buyers and sellers are interacting within the market. You can see quickly areas of price acceptance and price rejection.