“Price advertises, Time regulates and Volume confirms or rejects opportunities” Quote - Jim Dalton
Next to the TPO Profile is a Volume Profile and that's something you may or may not be familiar with. Here we have it set side by side and we do that for contrast so we can see volume as well as TPO profile. The one with letters is the TPO Profile and that is time-based, whereas the other profile is the volume profile and that is built based on how much volume is trading at each price.
An important thing to look at is the Volume Point of Control (VPOC). Volume point of control is where the most volume occurred and oftentimes, they will line up with the Time Point of Control (TPOC) on the chart, but they don't have to.
So, you're going to find in the world of profiles, both TPO profile and volume profile there are some guys that are going to say, well this one's more important and others are going to say this is more important, here we put them both on the chart and look for nuances on the chart. An example would be if the VPOC was near the highs and say we closed down near the lows, well that that would tell me there's a lot of stuck longs. There's a lot of volume that traded near the high and there's a good chance those guys are stuck long because price closed near the lows, so that's one way you can utilize this type of information.
Another metric traders look at is the width of TPOC. How wide is that POC? The wider it is, the more the market is settled at those prices and more likely just to stay around those prices as the day wears on versus breaking from them because there's so much committed at that level.
The line for the volume point of control will extend until it gets touched or covered up, sometimes you'll hear it referred to as a naked volume point of control. Some traders will trade this as a support level if the market is above it and a resistance level if the market is below that VPOC. It’s one way to utilize the volume information contained on these TPO Profile Charts.
Want to Learn More About TPO Profile Charts?
Discover how futures traders use TPO Profile charts to identify trading opportunities. TPO charts allow the user to analyze the amount of trading activity, based on time for each level the market traded at, for any given period of time. This allows you to easily see the areas where the market is trading most of the time and helps you analyze price, volume, and time in a single chart.