Volume Profile Indicator
In the GBPUSD above, the H1 chart price reverses in VPOC and continues to move towards the trend through the low volume area as the indicator displays volume levels to create a volume profile. Thus, it helps Forex traders to identify potential reversal areas. In addition, volume control points VPOC or POC have proven to be excellent support or resistance areas as reversal points.
Once the VPOC or POC areas are marked, they become points of future support and resistance and the market often retests them. Therefore, retesting of these areas provides additional entry points. On the other hand, volume control points provide a good exit point for booking profits as a VPOC. Along with the VPOC, high volume areas can also serve as potential exit points.
Traders often combine VPOC with TPO (Time Price Opportunity) to create a complete market profile. The Volume Distribution Indicator is useful for all types of online forex traders as it provides viewable lines and bars. In addition, the indicator is free to use, easy to download and works with any chart time frame. However, forex traders should confirm the indicator signals by price behavior to get the best trading results.