Hi Traders, I have been searching for better strategy on volume profiles and market profiles. I did backtest of this strategy using volume profile and it is good so far.
There are lots of posts on volume profile and how to read the charts using volume profile in the forexfactory. you can use this with Futures and stocks.
This is simple to identify where to trade and the take profit.
This is not my strategy and I have found this in another forum (https://www.forexbatch.com/thread-st...ading-strategy).
Lets get into the strategy. As the basic rule of volume profile, price will always seeks the fair value based on buyers and sellers agreement. The price will not stay longer in the low volume area and it is attracted to higher value area where there is lots of trading activity.
Using 1Hr chart here but you can use any charts lower than 1Hr as the volume profile graphs displays better in lower TF.
Simple Buy rule:
If the day's last candle(last 1Hr candle) closes at the low volume area, then the price is more likely to move to high value area. Whenever we find the last candle closed at low value area which is below the High value area, the we go for buy with a TP target of last volume node.
Below image, the value area is set to 70(which means the colored area is where 70% of days trading happened).
Take a buy position with target TP as low of value area as below
Similarly for sell, if the last candle closes in the low value area which is above high value area, the sell with target TP of high of high value area.
Please check with the backtest for better understanding. I backtested for EU and AU pairs so far. Also it is better to go for grid incase of price is againist which is very rare.
Thanks.
There are lots of posts on volume profile and how to read the charts using volume profile in the forexfactory. you can use this with Futures and stocks.
This is simple to identify where to trade and the take profit.
This is not my strategy and I have found this in another forum (https://www.forexbatch.com/thread-st...ading-strategy).
Lets get into the strategy. As the basic rule of volume profile, price will always seeks the fair value based on buyers and sellers agreement. The price will not stay longer in the low volume area and it is attracted to higher value area where there is lots of trading activity.
Using 1Hr chart here but you can use any charts lower than 1Hr as the volume profile graphs displays better in lower TF.
Simple Buy rule:
If the day's last candle(last 1Hr candle) closes at the low volume area, then the price is more likely to move to high value area. Whenever we find the last candle closed at low value area which is below the High value area, the we go for buy with a TP target of last volume node.
Below image, the value area is set to 70(which means the colored area is where 70% of days trading happened).
Take a buy position with target TP as low of value area as below
Similarly for sell, if the last candle closes in the low value area which is above high value area, the sell with target TP of high of high value area.
Please check with the backtest for better understanding. I backtested for EU and AU pairs so far. Also it is better to go for grid incase of price is againist which is very rare.
Thanks.
