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Today, I will show you how to effectively use a unique TradingView indicator called Activity and Volume Order Flow Profile. This powerful tool helps traders analyze volume in CFDs, even though accurate volume data isn’t available in these markets.
Why Use the Activity and Volume Order Flow Profile Indicator?
In CFD markets, real volume data is often unavailable, making it difficult to gauge market participation. This indicator simulates volume behavior by calculating buy and sell volume data, giving traders a clearer understanding of order flow.
Adding the Indicator
To add the Activity and Volume Order Flow Profile indicator:
- Open TradingView and select your preferred chart (e.g., GBP/USD).
- Go to the Indicators menu.
- Search for Activity and Volume Order Flow Profile (created by algo Al).
- Click to add it to your chart.
The indicator will take a few seconds to calculate and display the volume profile.
Configuring the Indicator
Once the indicator is added, adjust the settings to suit your analysis:
- Bars to Analyze: Choose how many previous bars the indicator should calculate. For example:
- On a 30-minute chart, selecting 7 bars will analyze the past 3.5 hours.
- Increasing the bar count to 84 will analyze the past 24 hours.
- Color Customization: You can adjust colors for better visibility.
- Net Order Flow Calculation: This option calculates the net difference between buy and sell orders, helping identify key price levels with significant trading activity.
Check my video:
Identifying Key Trading Areas
Using the net order flow data, you can pinpoint critical areas where:
- High Net Sell Volume suggests intense selling pressure.
- High Net Buy Volume highlights potential buying support.
For instance, a significant net sell volume zone appeared around 1.295 to 1.297 in the provided example. This marked a potential resistance area suitable for placing sell orders.
Finding Optimal Entry Points
For precision entries, combine the indicator with additional tools such as:
- Relative Strength Index (RSI) to confirm overbought or oversold conditions.
- Trendlines to identify breakout or breakdown points.
In the example, the trader identified a low-volume zone within a broader sell volume area, indicating a prime location to enter a short position. By waiting for price action to reach this region, they improved their trade’s probability of success.
Monitoring Market Conditions
While technical analysis is crucial, it’s equally important to consider fundamental factors. For instance, poor economic data for the US dollar may influence market sentiment and disrupt expected price behavior. Monitoring economic reports can help avoid trading against strong fundamentals.
Volume Profile Insights
The Activity and Volume Order Flow Profile also highlights high-volume nodes — price levels where extensive trading occurred. Such zones often act as support or resistance, providing valuable insight for entry and exit points.
The trader identified a high-volume area of around 1.2944 in the provided example as a potential target zone where the price might be revisited.
Final Tips for Using the Indicator
- Always combine volume profile data with additional indicators for confirmation.
- Monitor fundamental factors to avoid trades that conflict with major market events.
- Adjust your analysis period regularly (e.g., 7 bars vs. 84 bars) depending on the timeframe you’re trading.
By effectively combining volume profile data with technical indicators and market fundamentals, you can improve your trade entries and manage risk more effectively. The Activity and Volume Order Flow Profile is an excellent tool for identifying critical price zones, especially in CFD markets where volume data is limited.
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
Igor regularly publishes trading-related videos on the Fxigor Youtube channel.
To contact Igor write on:
igor@forex.in.rs
