LEARN VOLUME PROFILE VISIBLE RANGE（VPVR） IN 3 MINUTES – BLOCKCHAIN 101

introduction

Quantity and energy are the basis of pushing all trading fluctuations, and the rising and falling trend is also a concrete manifestation of the strength of quantity and energy of buyers and sellers. There is a saying in the trading world: “Only by capturing the trend of mainstream funds can we grasp the pulse of trading fluctuations.” It can be said that the amount of energy not only determines the rise and fall of the trading market, but also determines how high and how fast it rises!

Today, we are going to learn that capturing the volume distribution is a technical indicator: Volume Profile Visible Range；It has a very good display of the volume distribution within a specific price.

The historical origin of Volume Profile Visible Range(VPVR) can be traced back to the development of technical analysis and market structure. There is not a specific single inventor, but as a part of the evolution of volume analysis tools. It is gradually formed with the joint efforts of the trader community and the market analysis field.

Volume analysis has always been an important part of technical analysis. The early volume charts and analysis methods did not have a clear inventor, but were gradually developed with the efforts of many traders and analysts. The concept of volume analysis itself existed as early as the early stage of technical analysis.

In this context, the development of Volume Profile is also a gradual process. The evolution of this concept may involve many traders, analysts and technical experts, who have gradually formed this powerful market analysis tool through practice, research and community discussion.

How does Volume Profile Visible Range(VPVR) work?

By drawing a vertical bar chart on the chart, VPVR corresponds the transaction volume to the price level, forming a visualization of the transaction volume. Peak areas will be displayed in bright colors or other eye-catching colors, so that traders can quickly identify the main trading areas of the market.

Practical Application of Volume Profile Visible Range(VPVR)

The purpose of using Volume Profile Visible Range(VPVR) is to get a deeper understanding of the volume distribution of the market, so as to find the key support and resistance levels. The following are some methods and concrete examples of using VPVR:

1. Identify key supports and resistances:

VPVR distinguishes high and low volume areas by color, and high volume areas may become key support or resistance. On charts, these areas are usually displayed in bright colors.

Example: If there is a high volume area at a certain price level, it may mean that the market has a strong interest at that level and will become a support or resistance in the future.

2. Identify potential trading opportunities:

VPVR helps to discover the unique activity level of the market and provides traders with information to identify potential trading opportunities.

Example: If the market price fluctuates in a low volume area, it may provide opportunities for short-term trading, because relatively low volume may lead to faster price movement.

3. Confirm the trend direction:

VPVR can help traders confirm the direction of market trends. The trend of high turnover may indicate that market participants have a consensus on the current price level.

Example: If the price meets a high volume area in the upward trend, it may indicate that the buyer still has confidence and the trend may continue.

4. Identify potential price reversal points:

Low-volume areas may mark the potential reversal point of prices, because it indicates that the interest of market participants is relatively low.

Example: If the price enters the low volume area during the rising process, it may be a signal of price reversal, because the market may lack sufficient kinetic energy.

Write at the end:

For the use of VPVR, it is best to combine it with other technical indicators and trend analysis methods to enhance the accuracy of trading decisions.

At the same time, practicing and repeatedly observing the performance of VPVR can help traders better understand the market dynamics.

Generally speaking, VPVR is a powerful tool for market analysis, but it needs to comprehensively consider multiple factors and combine the trading plan and risk management principles to improve the accuracy and success rate of decision-making.