Forex glossary

Volume Profile

Volume Profile allocates available volume to price bins over a chosen dataset. POC marks the highest-volume bin; Value Area contains a selected share, commonly 70%, under the platform's algorithm. Retail spot FX can use a provider's tick data; the profile describes observations rather than a probability map.

Illustrative example

How does it work in practice?

Assume three price bins contain twenty, fifty and thirty contracts. The middle bin is POC because it has the most volume; changing bin width or the session range can change the identified level.

A case to work through

The largest bin at one edge

Hypothetical bins 10–11, 11–12 and 12–13 contain volume of 60, 25 and 15.

  1. POC corresponds to the first bin because its volume of 60 is highest.
  2. The middle bin is not POC simply because of location; the 60% share refers to volume data.

What follows? State the POC bin, binning method and data range.

Example boundary: Different bin widths or ticks instead of contracts can change the profile.

From data to POC

From data to POCThe profile describes data rather than a probability map.1Source and scopeCheck volume type and the selected period.2Price binsAggregate available volume using the chosen binning.3Largest binPOC comes from volume rather than the range midpoint.
The profile describes data rather than a probability map.
Text description of the diagram
  1. Source and scope: Check volume type and the selected period.
  2. Price bins: Aggregate available volume using the chosen binning.
  3. Largest bin: POC comes from volume rather than the range midpoint.

A useful distinction

Volume Profile / Order flow

A profile aggregates volume by price; order flow can preserve sequence and classification of individual executions.

Check your understanding

Locate POC in an asymmetric histogram.

Three bins contain 15, 20 and 65. Which is POC?

Show the answer and explanation

The third

It has the highest available volume.

Market data and interpretation limits

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Sources and documentation

The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.

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