Nifty Volume Profile Analysis on Hourly Charts

Volume Profile is a simple and very interesting technical analysis method that can help to understand the activity behind the scenes in terms of institutional traders.

This is simple but powerful method that can enhance the accuracy of trading giving all together a different insight and conviction for taking a trade.

There are different shapes to Volume profile named “D Shaped”, “P Shaped”, “b Shaped”

Volume Profile:

We can see a D shaped profile above. The Magnet line which we have talked about in many webinars has continued to work amazingly well and prices are continuing to cling to it despite of events or global market movement.

The lows and highs made is very near tot eh highlighted grey area high and lows of the profile. This also adds to the fact that these are important support and resistance and we need to break away from the Magnetic pull by breaking the levels above 15920 or below 15620 for a clear trend to emerge.

Basis of this simple concept of volume profile one can make out zone of strong support and resistance where the volume profile is highest and if price acceptance above that zone hints towards bullish sign. However, one can further combine this along with Ichimoku cloud and other intraday techniques to enhance the conviction for trading.

In short, Volume profile is a powerful tool that can be adopted by traders to get a peek into what are big players or institutional traders are upto and then ride the trend in that direction. We are yet to see a clear breakout or breakdown here and once that happen a strong trend will emerge. Keep tracking volume profile but do not forget to combine it with Open Interest Analysis, Patterns and Elliott Wave for a complete trading system.

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