medium · Volume Profile Analysis profile-shapes
During an equity session, price forms a P-shaped profile. Late in the session, the market rotates down from the top of the belly toward the thin lower tail. A volume profile analyst notes that the area from the session low to where the belly begins is an extremely low-volume zone.
What is the standard interpretation of this low-volume zone in the tail?
- The low-volume tail is a High Volume Node (HVN) and the heaviest-traded price, so it should act as firm support
- The low-volume tail carries exactly the same implication as the high-volume belly, so the two zones should trade alike
- The low-volume tail is a Low Volume Node (LVN) or 'air pocket' — price is likely to travel through it quickly if revisited
- The low-volume tail simply means the whole session was illiquid, so the entire profile is unreliable and should be ignored outright
Sign up free to see the explanation and track your rank →
More Volume Profile Analysis profile-shapes practice
- A session is trending higher. A consolidation forms mid-day… — What does this skew imply?
- A trader observes the E-mini S&P 500 (ES) opening at 09:30 E… — What is the Initial Balanc
- The 'Rotation Factor' for an index session is calculated as… — What does this numerical re
- After a prolonged uptrend, a P-shaped profile forms, but ins… — How should this two-sessio
- After three consecutive D-shaped sessions building a tight v… — How should a volume profil
- Where do volume profile traders most commonly look to enter a long trade on the following
- Which scenario is most consistent with a bullish resolution of the prior b-shape?
- In volume profile terms, what has occurred to the prior consolidation zone's LVN between 1