Volume Point Of Control; Indicator - MT4
Volume Point Of Control; Indicator – MT4

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Most technical indicators uncover and exploit the price patterns on the charts and make assumptions, suggestions, and predictions of the next price movement accordingly. However, price is only half the story. The measure of activity behind price movement is key. It is the crescendo and diminuendo of ‘market noise’ which holds the key. In other words – volume

For the traders of the past, tape reading was all they had, reading volume and price as the ticker tape punched out the last price and associated volume, a powerful approach we still use today with the Quantum tick volumes indicator.

But now, with the Quantum VPOC ( volume point of control) indicator we have taken the analysis of volume and price to a higher level, which both compliments and expands the VPA relationship. Whilst the Quantum tick volumes indicator considers the relationship between a single volume bar and its associated candle, the Quantum VPOC indicator analyses the density and intensity of volume over time against price in three different ways.

First, the Quantum VPOC indicator constructs the Volume Profile from a set number of bars in history to the most current bar. The Volume Profile is then presented as a vertical histogram shown at the right edge of the chart – a stack of horizontal bars of varying lengths, but of equal height representing the amount of activity at each price level.

Second, the Quantum VPOC analyzes the Volume Profile to find the key price levels where activity is strong and rising, or weak and falling. In other words, the indicator looks for peaks (long bars) of the Volume Profile where price tends to be attracted as these are areas where price was previously accepted. These are called High Volume Nodes. The indicator also looks for troughs or valleys (short bars) of the Volume Profile where price tends to be repelled as these are areas where price was previously rejected. These are referred to as Low Volume Nodes. Both types of price level act as precise zones of support and resistance and as such are projected across the chart within the given period.

Third, the Quantum VPOC indicator looks for the Highest Volume Node or the highest peak in the Volume Profile and marks it as the Volume Point of Control – the price level which acts as the fulcrum from which price pivots. The indicator completes its calculations and updates as each new volume bar is delivered. The result is a chart revealing the overarching influence of volume at price.

You can discover more about the VPOC indicator for MT4 at Quantum Trading by clicking the link above.