A volume profile turns the chart sideways: instead of asking when things traded, it asks at what price they traded and how much. Three numbers do most of the work.
1. POC (point of control)
The single price where the most volume traded in the session. It is the price both sides agreed on the most. Price often comes back to it, and it tends to act like a magnet while the market is balanced.
2. Value area (VAH and VAL)
Start at the POC and add the busiest prices around it until you hold about 70% of the session's volume. The top of that zone is the VAH (value area high), the bottom is the VAL (value area low). Inside the value area is where the market was happy to trade. Outside it, it traded less and moved faster.
3. What to do with them
- Price inside value: rotation is normal. Moves from VAL toward POC or VAH are common.
- Price testing VAH or VAL: watch the reaction. A wick through the edge that closes back inside is a rejection.
- Price holding outside value with closes and volume: that is acceptance. Value is moving, and the old edge often becomes the reference on the pullback.
Live example on this chart (BTCUSDT, Binance, today's session in UTC, built from 1-minute volume):
- POC: 82,175
- VAH: 82,450
- VAL: 81,450
- Price now: about 81,780, inside today's value but below the POC.
So the market is still in its accepted range for the day. The questions for the next hours are simple: does price rotate back up to the POC, or does it go back to the VAL and test whether buyers still defend it?
Three common mistakes
- Treating every touch of VAH or VAL as a reversal signal. The edge only tells you where to pay attention.
- Calling a breakout on the first wick outside value. Acceptance needs time and volume.
- Mixing data sources. A CFD feed and an exchange feed can show different volume, so the same instrument can have slightly different levels.
The lines on the chart come from the AK FlowBook Lite indicator (daily, weekly and monthly profiles, VWAP and naked POCs).
Education only, not a trade signal...
