If you play the move outside of a distribution and into imbalance, make sure the next possible distribution target is far away. If you play within a distribution, make sure that the distribution block is large enough for a swing, in this case we have $60 of movement. The acceptance outside of the distribution (price becomes imbalanced).The acceptance of support and resistance in the distribution (to maintain balance in the distribution).
You can see that price holds the resistance and support until the level breaks and price slips through. We have enclosed the distribution blow with two blue lines, from 240 down to 186. Take this image of META into consideration (below). Out of these, we are going to focus on the distributions and ledges as our prime swing trading tools under the volume profile.Ī volume profile distribution acts as an area of “balance” when price is within that balance, price would want to stay there, when price escapes, it looks for another balance. Ledges (a drop off between a high volume node and a low volume node, these surround distributions).Distributions (clusters of high-volume nodes that look like “bellies”).HVN/LVN (High volume nodes and low volume nodes, which represent levels of high volume spikes and low volume spikes, respectively).VAL/VAH (value area low and value area high, the top end and bottom end of the value area).POC (point of control or most volume traded at a level in a desired session).Value area (70% of the sessions volume).The Volume profile is made up of the following components: Which is important for distinguishing between distributions and market direction. The volume profile displays volume vertically on the screen so you can see how heavy the volume was on each of the levels traded. (Explanation wise), however using examples, we’re going to break it down to the fullest. We have done countless blogs on the volume profile, along with Youtube videos, so we are going to keep this briefer. The Volume Profile is a TRADEPRO Academy staple, no matter the asset class or trade, there is nearly 100% probability that the volume profile will be used. Now the way that you trade the products can be up to you, I’ve noticed that these work well with options and equities. The group of these indicators is fairly simple to understand and we can use them for either long swings or short swings. Throughout this article, we are going to discuss the top 3 indicators a trader can attribute to their swing trading. Naturally, swing trading has been around forever, so there is a lot to learn when it comes to the subject. Swing trading is a trading style that has been made really popular by retail traders during the 2020-2021 market recovery after we had a large pandemic-driven drop.
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