The RIGHT WAY to use Volume on Candlestick Charts (with ZERO experience)

Main ideas / lessons from the video

• Volume Profile basics

  • Volume Profile is a technical indicator that maps traded volume to price levels (not time).
  • It visualizes where the most shares traded at different prices.
  • The indicator provides a key level called the POC (Point of Control):
    • Above POC: bulls are generally in control.
    • Below POC: bears are generally in control.
  • The POC line is treated as a practical support/resistance “battle” level.

• How to interpret Volume vs Candlesticks

  • “Regular” volume is the total shares traded during a time period, shown under candlesticks.
  • The speaker emphasizes matching volume bar color to candle color to determine whether high volume occurred on buying vs selling candles.

• Where Volume Profile fits vs VWAP

  • VWAP (Volume Weighted Average Price):
    • Acts like an equilibrium/moving average of price weighted by volume.
    • When price is above VWAP → bullish, below VWAP → bearish.
    • Typically lags because it behaves like an average over time.
    • Breaks of VWAP are often meaningful and frequently associated with strong follow-through (flush/breakout behavior).
  • Volume Profile / POC:
    • Is “pure volume by price,” and changes more quickly around heavy-volume zones.
    • Helps identify why price is consolidating and where buyers/sellers most actively traded.
  • Caution taught: signals can conflict—sometimes price can be above VWAP (bullish) but below POC (bearish) (or vice versa), so use caution.

• Best practice timing/display

  • The speaker does not use Volume Profile on the daily chart.
  • Primary usage is on the 5-minute chart (intraday).
  • Display/accuracy issue:
    • If you zoom in tightly (narrow visible range), the profile can change.
    • Therefore he avoids using it on the 1-minute chart because his 1-minute view is usually too zoomed-in.

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Methodology / step-by-step instruction (as taught)

1) Set up Volume Profile correctly (platform settings)

• Open Indicators in your trading platform.
• Search/type for “volume profile” (or “vol” depending on platform).
• Choose Visible Range (not Fixed Range), so it uses the current visible portion of the chart.
• Use standard settings (speaker’s defaults when loaded):
  • Value Area = 70
  • Row Size = 24
  • Volume up vs down (standard behavior)
• Color guidance:
  • POC is red by default.
  • He says he only relies on the POC line color for identification (not for other meaning).

2) Use Volume Profile signals during trading

• Identify the POC line on the active chart.
• Interpret relative position:
  • Price above POC → bullish bias
  • Price below POC → bearish bias
• Treat POC as:
  • A support/resistance battle line
  • A place to watch for:
    • Breakouts and holds above it
    • Rejections and flushes below it
• Monitor “battle zones”:
  • When price repeatedly crosses and struggles around the POC (especially near VWAP), expect chop/less reliable follow-through.
• “Pivot/trigger” concept:
  • Above/holding tends to enable continuation.
  • Falling below may lead to weakness/rejection.

3) Compare POC with VWAP for confirmation or warning

• Use both to reduce confusion:
  • Price above VWAP and above POC → stronger bullish case
  • Price above VWAP but below POC → mixed signals; be cautious
  • Price below VWAP and below POC → stronger bearish case

4) Execution mindset described (how he decides when to stop/avoid)

• He uses POC to help with:
  • Where to take profit / stop trading
  • Avoiding overstaying a trade
• He adds:
  • If price breaks below POC after being above, he expects potential deterioration.
  • When the chart becomes too choppy around POC, he stops trading that name.

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Case studies (stocks traded and what Volume Profile taught him)

1) LIPO (major winner; squeeze day)

• Setup discovery:
  • Found via top gappers / scanner using premarket momentum criteria (large % gainer, low-ish float, huge relative volume, and news catalyst).
• Volume Profile behavior:
  • POC moves upward as new volume arrives at higher prices.
  • He treats zones around POC as support during dips.
• Trading lesson:
  • Best trading was when price respected/held key levels around POC.
  • When price became a tug-of-war around POC, it turned choppy and he stopped trading.
• Takeaway:
  • POC helped identify:
    • support during consolidation
    • conditions where the move was breaking down (battles around POC → less favorable conditions)

2) YIBO (small winner / mixed-to-not-great trade)

• He saw price straddling POC repeatedly, implying consolidation.
• Even though price stayed above VWAP, it struggled to hold above POC and ultimately showed bearish pressure.
• Trading lesson:
  • A real battle between VWAP and POC often leads to difficulty sustaining breakouts.
  • Heavy selling after initial bursts can dominate and reject price.

3) PALI (big winner)

• News-driven catalyst (microbiome study confirmation).
• Volume Profile behavior:
  • Early move: price initially above POC and above VWAP (bullish).
  • Later, after a push, conditions turned mixed:
    • below POC while interacting with VWAP
  • When price couldn’t sustain above POC after pullbacks, he avoided overshooting.
• Execution lesson:
  • He used POC + (optionally) MACD for timing to help avoid “overstaying.”

4) Other losers / learning points

• BMR (lost money early; described as not obvious enough / didn’t work)
• LR (rejection; he didn’t take profits quickly enough, increasing drawdown)
• TWW, CDI (later losses; he mentions overextending / overstaying welcome)
• Overall loss lesson from “big sizing too early”
  • A risk-management mistake:
    • When already up/down heavily, he sized up aggressively rather than taking “base hits” (partial profits / trimming risk).
  • POC is referenced as a tool to help decide when a trade is “not set up anymore,” but discipline around profit-taking still matters.

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Pros and cons explicitly stated

Pros of Volume Profile

• Clarifies the POC (where the biggest volume battle is).
• Helps identify sentiment more concretely:
  • Above POC = bullish tilt
  • Below POC = bearish tilt
• Adds depth to candlestick patterns by explaining why consolidations occur.
• Supports cross-method alignment:
  • Use with VWAP and standard support/resistance lines (including half-dollar/whole-dollar levels).

Cons of Volume Profile

• It’s another indicator to monitor, which can distract if used inconsistently.
• No indicator works 100% of the time; consistent use is emphasized.
• Display/visibility issues:
  • The profile can change with zoom/narrow visible range, so timeframe/display choices matter.

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Speaker / sources featured (at end)

Speaker(s)

• Ross Cameron (full-time trader; instructor in the video)

Other sources mentioned

• Volume Profile indicator (tool/indicator within trading platforms)
• VWAP (Volume Weighted Average Price concept/indicator)
• MACD (indicator concept; used as an additional timing/reference in some examples)
• Trading platform / scanners (unnamed platform software, but referenced as having volume profile indicators and scanners)
• Warrior Trading (mentioned as a trial/platform for access to market data and classes)