About Volume Profile by Divergence Software
The Volume Profile indicator — part of the DS Essentials package — is a comprehensive volume analysis tool that can be used on any bar interval available in Technician. When run on an intraday interval you specify the number of days to include in the profile, and whether or not to include the current day. You can also filter the profile to only include bars between a user-specified start and end time. When run in Daily, Weekly, or Monthly intervals you specify the total number of bars to include as well as the bar offset (i.e., you can shift the profile back by a user-specified number of bars, if desired). In both cases the indicator will create a color-coded volume profile histogram and will identify the UVA/LVA (Upper and Lower Value Areas), the POC (Point of Control) and the VWAP (Volume Weighted Average Price). The total volume traded above and below the POC will also be displayed.
The POC is the price level at which the most volume occurred. If there is more than one price level with the same max volume, the price level closest to the mean of the range is used as the POC.
For the Value Area calculation, two options are provided:
- 70% Method: Accumulates volume on either side of the POC until 70% of the total profile volume is reached. So in this scenario the UVA and LVA will bound 70% of the volume traded in the selected data range.
- StdDev Method: Calculates one standard deviation from the Volume Weighted Average Price (VWAP).
When run on symbols that do not report volume, the Volume Profile indicator will assume one volume unit for each touch of a particular price level.
Once the indicator has been loaded, you can access the parameters dialog by selecting the indicator menu. You will see a pencil icon to the right of the Volume Profile menu option.
The full Volume Profile user guide can be found on the Divergence Software website here: http://www.sr-analyst.com/ChartIQHelp/index.html
It should not be assumed that past performance is any guarantee of future results. Results obtained from the use of the DS Essentials Indicator Collection for ChartIQ indicators or any information provided in this User Guide are not guaranteed to be profitable. It should be understood that investing or speculating in the financial markets involves risk and may result in either a partial or total loss of one’s investment capital. The information presented in this User Guide is believed to be reliable, but cannot be guaranteed as to its accuracy or completeness.
Divergence Software, Inc. and/or its principals and employees will accept no liability whatsoever for any loss arising from any use of the DS Essentials Indicator Collection for ChartIQ indicators, or the information contained in this User Guide. Neither Divergence Software, Inc. nor ChartIQ offer trading advice of any kind and we are solely involved in the business of financial software development and education.
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