Recently, I’ve been looking into how traders use the VPVR indicator, and I found that this tool is definitely worth delving into further.

The Volume Profile Visible Range (VPVR) is a bit different from typical volume indicators. A regular volume histogram is plotted along the time axis, but the VPVR indicator is displayed along price levels—so you can immediately see which price points have the most concentrated trading volume. This is especially useful for judging support and resistance levels.

The core concept of VPVR is actually not complicated. First, there are the histogram bars—each one represents the trading volume at a specific price level. The longer the bar, the more active that price level is. Then there is the Point of Control (POC), which is the price level with the highest trading frequency during the entire period, and it’s usually marked with a bright color. There are also High Volume Nodes (HVN) and Low Volume Nodes (LVN): the former are areas where trading is concentrated, while the latter are zones where trading is sparse.

How do you use it in practice? My observation is that HVNs often act as strong support or resistance because they gather a large amount of orders. When the price approaches these zones, you usually see a clear reaction. POC is a bit more special: it represents the most active price level, and once it’s broken, it may indicate that the price could make a big move.

LVNs, on the other hand, are another kind of opportunity. Low-volume areas are often where price can swing quickly, because there aren’t many orders there to “hold up” the price. Traders often use breakouts of LVNs to find short-term opportunities, or to judge the start of a new trend.

In terms of real-world application, the VPVR indicator helps you quickly identify consolidation zones and trending areas. Consolidation zones are usually where HVNs are concentrated, while trending areas are near LVNs. This is particularly important for deciding when to enter and when to exit trades. For example, if you want to do a retracement trade, HVNs are ideal places to place orders. When it’s time to close a position, prices near the POC or HVN are often good profit-taking points.

One more thing to keep in mind: although the VPVR indicator is powerful, it’s best to use it together with other technical analysis tools. There is still risk in relying on VPVR alone to make decisions. Just treat it as an important tool in your trading toolkit.