Volume Profile Basics: POC, VAH, VAL Explained

Volume Profile Basics: POC, VAH, VAL Explained

Most traders look at price charts. Smart traders look at where the volume actually traded.

What Is Volume Profile?

Volume Profile is a horizontal histogram showing volume traded at each price level. It shows where institutions were most active.

The Three Key Levels

POC (Point of Control): The price level with the highest traded volume. This is fair value. Price tends to return to POC like gravity.

VAH (Value Area High): The upper boundary of the value area (70% of volume). Acts as resistance from below and support from above.

VAL (Value Area Low): The lower boundary. Acts as support from above and resistance from below.

How We Use It at HTA

Volume Profile is a filter, not a trigger. We use VP levels to confirm or deny setups from our primary strategies. Example: RVOL + VWAP shows a long setup at 18,400. POC for the prior session was 18,395 and VAL is 18,380. That is confluence.

POC as a Magnet

POC acts as a gravitational center. When price moves away from POC, there is a statistical tendency for it to return. This is the basis of mean reversion trading.

Developing vs. Developed Profiles

A developing profile is today's session. A developed profile is a completed session. We use developed profiles from the prior session for morning levels.

Practical Application

Before the open, mark yesterday's POC, VAH, and VAL. Note overnight session relative to these levels. At the open, observe price acceptance or rejection. Use this to filter your strategy signals.

Free Resource: Get the Snapback Strategy Playbook — The exact entry, stop, and target framework our traders use daily.

Mahalo for reading and trade well!

— Glenn and Reid | Hawai'i Trading Academy