Volume profile explained: POC, value area and how to read it

A candlestick chart tells you when price traded. A volume profile turns that sideways and tells you where: it adds up the volume of a range of candles at each price level and draws the totals as horizontal bars. The longest bar marks the price where the most volume changed hands; the bars around it show which prices the market accepted and which it passed through quickly.

This guide explains the parts of a profile, how AlertaChart calculates them and which of its tools to use for which range. The tools themselves are described in the Help Center's drawing tools and indicators articles.

What a volume profile shows

The price range of the selected candles is cut into equal rows. Each candle's volume is shared among the rows its high–low range covered, and each row's total becomes one horizontal bar. No formula or smoothing is involved.

Because candles only report a high, a low and one volume number, the profile has to assume how that volume was spread inside the candle. AlertaChart's drawing tools share it in proportion to how much of each row the candle covered. The finer the candles, the less this assumption matters — which is why the drawing tools can rebuild a profile from lower-timeframe candles (see the settings).

Point of control, value area, VAH and VAL

• Point of control (POC): the row with the most volume. The drawing tools mark it with a solid line labelled POC and its price.
• Value area: the rows around the POC that together hold a set share of the range's volume — 70 % by default in AlertaChart, the same default common profile software documents.
• VAH and VAL: the value area high and low, the top and bottom edges of the value area. The drawing tools draw them as dashed lines; Auto Key Levels shows them as solid levels.

The value area is built outward from the POC. At each step AlertaChart adds the neighbouring row above or below that holds more volume (the upper one on a tie) until the 70 % is reached. CQG documents the same approach for its Market Profile value areas.

A related idea is the time-price opportunity (TPO) profile, also called Market Profile: it counts how often price traded at a level over fixed time blocks instead of how much volume traded there. AlertaChart has no separate TPO chart; see the table below for where time at price is used.

How to read a profile

A profile describes where trading concentrated. These readings give context; none of them is a signal on its own.

1. Where price is against the value area. Price trading inside the value area means it is moving within the range the market traded most. Price holding outside it means trading has moved away from that range.
2. The POC as a reference. Many traders watch how price behaves when it returns to the POC of an earlier range. Whether it holds or slices through is information; neither outcome is guaranteed.
3. Thin rows. Rows with little volume are prices the market crossed quickly. Some traders expect price to cross them quickly again; test that idea on your own charts.
4. Profiles side by side. Comparing the value area of yesterday with today's shows whether trading is building higher, lower or in the same place.

Which range: the AlertaChart tools

The range you pick decides the answer. AlertaChart offers five ways to build a profile:

There is no separate session volume profile that draws one histogram per trading session. For daily, weekly and monthly levels use Auto Key Levels; for one particular session, draw a Fixed Range Volume Profile from its first to its last candle. On symbols without volume data, such as indices and macro series, Auto Analysis builds its profile from time at price instead — the pricing table calls this time-price profile analysis.

Step by step: a fixed range profile

1. Open a chart, for example BTC/USDT.
2. In the drawing toolbar open the Forecasting group and, under Volume-based, choose Fixed Range Volume Profile.
3. Click the first and the last candle of the range. The profile, its POC and its VAH and VAL lines appear with their prices.
4. Double-click the profile (or select it and choose Settings). The Volume profile settings are at the top of the Style tab.
5. Check the small status text in the top-left corner of the range: it says whether the profile was built from Chart data or from lower-timeframe candles, or that there is No volume data.

Open the BTC/USDT chart and draw a fixed range profile →

For the indicator (Pro), press Indicators at the top of the chart, search for "Volume Profile" and open its gear. Auto Key Levels, available on every plan, is in the same list; the Help Center's indicators article shows how to add and adjust them.

Settings that change the result

The indicator has fewer settings: Row count (60 by default, 10–200), Visible range only (off), the POC colour and line, the side and the maximum width. Auto Key Levels has Row Size (24) and Value Area Volume (70 %).

Common mistakes

• Reading Up / down or Delta as buyers against sellers. The drawing tools split a candle's volume by its direction: a candle that closed above its open counts as up. That is why Delta mode is labelled "Estimated Δ". Who traded aggressively at each price needs trade data — the footprint chart (Pro), described in the Help Center's order flow article.
• Assuming the indicator covers the screen. With Visible range only off it uses every loaded bar, so scrolling does not change it.
• Comparing profiles with different rows or ranges. A different row size moves the POC and the value area edges.
• Using coarse candles for a short range. A profile of ten daily candles is mostly assumption; use a lower chart timeframe or keep lower-timeframe data on.
• Treating the POC as a target. It records where trading was heaviest, not where price must return.

Method and limitations

The definitions follow profile software documentation (Sierra Chart, CQG) and AlertaChart's own code, cited at the end. What to keep in mind when you compare numbers:

• Candle-based estimate. Every tool spreads a candle's volume across its high–low range. The drawing tools and Auto Key Levels share it by overlap, the indicator gives each row it touched an equal share, and Auto Analysis weights it toward the candle's typical price. The three can put the POC on slightly different rows for the same candles.
• Ties and expansion rules. When two rows hold the same volume, AlertaChart takes the lower one; CQG documents taking the price nearest the middle of the range. Small differences between platforms are normal.
• Lower-timeframe data. The drawing tools pick the smallest of 1 minute, 5, 15 and 30 minutes, 1 and 4 hours and 1 day that is below the chart's timeframe and covers the range in at most 5,000 candles. They replace only closed chart candles that the smaller candles cover completely; the rest stays on chart data.
• One market's volume. The profile uses the volume of the symbol on the chart. The same coin on another exchange or market traded different volume at different prices.

Related guides and pages

• Writing your own levels: AlertaScript can read the footprint's POC, VAH and VAL per bar on the Pro and Elite plans (order flow data guide), and the Pine Script migration guide shows how scripts run on the chart.
• Every indicator and drawing tool with its plan: features and pricing.
• The full indicator library: indicators.