Volume Profile and Value Areas
A volume profile allocates reported traded volume across price bins over a specified session or window. Its point of control is the highest-volume bin; a value area is a chosen fraction of volume selected by a stated algorithm.
How it works
The result depends on source coverage, bin width, session boundary and the platform’s allocation method. A profile estimates where activity occurred, not where all open positions or unfilled orders remain. “70% value area” is a convention; algorithms for growing it around the point of control can differ.
Worked example
Suppose four bins at 99,100,101,102 contain 10,40,30,20 units of volume. Total volume is 100 and the point of control is 100. Under an algorithm that begins at the point of control and adds the largest adjacent bin, adding 101 reaches 70 units, so the 100–101 bins form that example’s 70% area.
Amounts, prices and scenarios are fictional teaching examples. They exclude any effects not explicitly stated and are not trade recommendations.
Limits and common mistakes
Tick-based allocation and coarse bars can estimate different distributions. A high-volume area is not a guaranteed support zone. Do not apply a completed full-day profile to decisions made early in that same day.
Knowledge check
Does the point of control show the largest remaining buy order?
Read the explanation
No. It describes historical reported traded volume, not the current resting order book or participants’ remaining inventory.
References and further reading
These sources explain the underlying concepts and specifications. They do not endorse QBMFX Academy. Check the relevant market, protocol version and reporting rules before applying an example.