Volume Profile
A histogram showing how much volume traded at each price level over a chosen period, plotted horizontally.
Formula
For each price level, sum the volume of all trades executed at that level over the period examined
Unit
shares
In depth
Volume profile reorganises the same trade data by price instead of by time, which answers a different question: not when did trading happen, but where. The price with the greatest volume is called the point of control, and the band containing roughly 70% of volume is the value area. Its appeal is that it identifies levels where large amounts of stock actually changed hands, rather than levels drawn by hand. Accurate profiles require tick data, so free versions built from candle approximations are considerably cruder than they appear, and no forecast attaches to any level.
Worked example
Over three months, 42 lakh of the 1.8 crore shares traded changed hands between ₹494 and ₹506, with the single largest volume at ₹500. That ₹500 level is the point of control — a description of where business was done.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Volume Profile” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.