Summary of "Volume Profile + Liquidity Strategy."

Summary of "Volume Profile + Liquidity Strategy" Video

This video presents an advanced trading approach combining Fixed Range Volume Profile with Smart Money Concepts (SMC) and Inner Circle Trader (ICT) methodologies to improve trade entry precision by following institutional footprints in the market.

Main Financial Strategies and Concepts

Volume Profile Integration with SMC & ICT:
- Traditional SMC & ICT traders often fail because they rely solely on concepts like fair value gaps, order blocks, and supply/demand zones without considering volume distribution.
- Adding Fixed Range Volume Profile helps identify where institutions have traded the most volume, providing better entry points.
Fixed Range Volume Profile Basics:
- Shows volume traded at different price levels within a selected range.
- Key components:
  - POC (Point of Control): Price level with the highest traded volume, acting as strong support/resistance or liquidity zone.
  - Value Area (VA): Zone where 70% of the volume is traded; key for identifying fair price levels.
  - Value Area High (VAH): Upper boundary of the Value Area, indicating overbought or premium zones.
  - Value Area Low (VAL): Lower boundary, indicating oversold or discount zones.
  - High Volume Nodes (HVN): Peaks in Volume Profile acting as magnets for price, indicating accumulation or retest zones.
  - Low Volume Nodes (LVN): Volume gaps where price moves quickly with little resistance, often linked to fair value gaps and breakout zones.
How to Use Fixed Range Volume Profile:
- Draw Volume Profile from swing low to swing high to identify institutional activity zones.
- Use POC and Value Area boundaries as dynamic support/resistance.
- Avoid trading in low volume gaps (LVNs) as these are areas of price slippage.
- Confirm fair value gaps and order blocks with Volume Profile to check their validity.
Trading Methodology Using Volume Profile:
- Identify swings and draw volume profiles on those ranges.
- Mark zones of high volume accumulation to find valid supply and demand zones.
- Use Volume Profile to confirm or invalidate fair value gaps and order blocks.
- Enter trades on retests of POC or Value Area boundaries with proper stop loss and target (recommended risk-reward 1:3 or better).
- Watch for volume accumulation during consolidation phases to anticipate breakouts or reversals.
Volume Profile Combined with Price Action:
- Use Volume Profile to identify retail traps and avoid false entries.
- Confirm strength or weakness by observing price reaction at POC, VAH, and VAL.
- Use Volume Profile to spot zones where price is likely to accumulate or reverse.
Wake of Plus Volume Profile Strategy (Wake of Spring):
- Identify volume accumulation during consolidation phases.
- Look for a "spring" or breakout below support followed by continuation in the original trend.
- Use Volume Profile to confirm accumulation zones and validate entry points.
- Combine with retest and stop loss management for high reward-to-risk trades.

Step-by-Step Guide to Drawing and Using Fixed Range Volume Profile

Add Fixed Range Volume Profile Tool:
- In TradingView, go to the 5th section of indicators and add the Fixed Range Volume Profile (free tool).
Draw Volume Profile:
- Click on the swing low point and drag to the swing high point of the price range you want to analyze.
Adjust Settings:
- Inputs:
  - Set Row Size to 50.
  - Volume to "Total."
  - Value Area Volume at 70%.
- Style:
  - Choose preferred colors for volume bars.
  - Turn on VA (Value Area) lines: red for VAH and blue for VAL.
  - POC line is black by default.
Interpret Volume Profile:
- Identify POC as key support/resistance.
- Value Area (between VAH and VAL) shows where 70% of volume traded.
- HVNs indicate strong volume zones acting as price magnets.
- LVNs or gaps indicate potential breakout zones or slippage areas.
Use Volume Profile for Trading:
- Confirm supply/demand zones and fair value gaps with Volume Profile.
- Avoid low volume zones for entries.
- Look for retests of POC or Value Area boundaries for valid entries.
- Apply proper stop loss below/above Volume Profile zones.
- Aim for risk-reward ratios of at least 1:3.
Combine with SMC/ICT Concepts:
- Use Volume Profile to filter and validate entries based on smart money footprints.
- Avoid retail traps by confirming volume presence in order blocks and fair value gaps.