Volume Profile in Ninjatrader: Master the Art of Trading Volume
Volume Profile Ninjatrader is an important tool for any trader. It can be used to identify key support and resistance levels, as well as trendlines. In this blog post, we will discuss how to use Volume Profile in Ninjatrader. We will also show you how to create a volume profile indicator in Ninjatrader 7/8.
Table of Contents
- What is Volume?
- What are Volume Profile indicators?
- What does Volume Profile indicate?
- Does NinjaTrader have Volume Profile?
- Difference between Volume and Profile Volume
- Risk Disclosure
What is Volume?
The Volume, also known as volume of trade, is the total number of shares or stocks traded for a given security.
The amount of transactions that occurred is shown by volume. As a consequence, liquidity may be determined by measuring volumes. When volumes are high, a security is considered active or liquid.
What are Volume Profile indicators?
The Volume Profile is a powerful charting research and indicator. It displays the volume traded for an asset at various price levels throughout a given time period.
Volume Profile draws on historical trading volume as well as all of the strategies and plans developed from past data.
Traders pay close attention to the volume profile of a market in order to find a potential reversal.
Some people believe that volume profile analysis gives traders an “unfair” advantage owing to market context, and that institutions and banks utilize such methods.
What does Volume Profile indicate?
The volume profile can take any form based on the distribution of volumes. It’s made by drawing horizontal lines to create a histogram. The bigger the profile grows, the more volume transactions occur at each level.
The volume profile is generally found towards the right side of the chart, next to the price levels. It’s represented by bars. The volume profile bars are generated by taking the total volume traded at a price over a certain period of time.
Traders can use the volume profile indicator as one of their major tools, alongside other technical analysis instruments. After taking all sales into account, the total purchase is divided, and volumes sold representing it on a histogram chart. The volume profile indicator may be used by traders to gain insight and make informed decisions.
Does NinjaTrader have Volume Profile?
Yes, NinjaTrader has a Volume Profile indicator. It is included in NinjaTrader’s premium Order Flow+ feature set.
There are two ways to add a volume profile to a chart. The volume profile is most commonly added to a chart as an indicator, but individual profiles can also be drawn on custom time frames using the Volume Profile drawing tool.
1 . Add volume profile as an indicator:
- Right-click on a chart and select Indicators .
- In the list of available indicators at the top left, scroll down and select Order Flow Volume Profile .
- Click Add and then Click OK .
2 . Draw a customized volume profile with the drawing tool:
- Right-click on a chart and select Drawing Tools .
- Select Order Flow Volume Profile .
- Left-click once on your starting point, then move the mouse to the right or left and left-click again on the end point.
Difference between Volume and Profile Volume
The main difference between Traditional Volume Indicator and Volume Profile is that the Volume profile shows the actual number of shares traded at each price level, while the Traditional Volume only measures the number of transactions in a time interval.
Ninjatrader offers a volume profile indicator that shows the total number of shares or stocks traded at various price levels throughout a given time period. This powerful charting research and indicator can help traders gain insight and make informed decisions.
Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment.
Risk capital is money that can be lost without jeopardizing ones’ financial security or life style.
Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Hypothetical Performance Disclosure:
Hypothetical performance results have many inherent limitations, some of which are described below.
No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.
One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading.
For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results.
There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.