Volume Profile Explained: POC, VAH, VAL and OVL
A candlestick shows you where price went. A volume profile shows you where the market did its business — the prices where real buying and selling volume changed hands. Those prices are where the market defends, rejects, and rotates. Here is how to read every number our free MT5 volume profile indicator prints.
Table of Contents
POC — the Market Magnet
The Point of Control is the single price where the most volume traded over the profile period. It is the fairest price the market found — the level where the most participants agreed to do business.
Why it matters: price tends to return to the POC. In a balanced market, moves away from POC usually come back. A break away from POC that holds — with one-sided volume confirming it — often marks a real shift. The indicator marks the POC on the chart (gold line) and in the table metrics column, and publishes it as a data-window series you can alert on.
VAH and VAL — the Accepted Price Zone
The Value Area is the price band holding a chosen share of the period's traded volume — 70% by default. VAH is its upper edge, VAL its lower edge. Inside the band, business kept building; past its edges, trade thinned out fast.
- Price re-entering the band tends to travel across it — the market is returning to where business is being done.
- Price holding beyond an edge often means the market has moved on to do business elsewhere — a value-area migration.
- The band is built by walking outward from the POC, adding the heavier neighboring level at each step until the target volume is covered — the classical expansion algorithm.
OVL — the Balance Detector
The overlap coefficient is the indicator's most distinctive output: a 0–1 score of how much buying and selling happened at the same prices over the profile period.
- Near 1 — both sides worked the same levels: a balanced, rotating market. The edges of the profile tend to hold.
- Far from 1 — each side kept its own price territory: a directional market. One side pushes, the other answers somewhere else.
- When the two sides are close to equal in volume, no side is named — the indicator refuses to dress a coin flip up as direction. The Balance Tilt input sets how far apart the sides must be before a side is named.
The OVL is computed by integrating the pointwise minimum of the two volume-normalized bell curves — with atomic masses for flat bars — using composite Simpson integration with crossing detection. The RES label is its self-check: EXACT means the drawing faithfully sums back to the traded volume; DRIFT means the math is out of tolerance and the profile should not be traded on that update.
Balance Tilt — Which Side Carries the Volume
Tilt is the percentage-point difference between buy and sell volume over the profile period. Positive leans to the buy side, negative to the sell side. Used with OVL it answers the two questions that matter: is the market balanced? (OVL) and if not, who is winning? (tilt).
Trading Balanced Days
- Buy VAL, sell VAH, target POC. In balance, the edges of accepted value are the trade.
- Look for confirmation from the footprint: a sell imbalance fading at VAH, or a buy imbalance absorbing at VAL (use our volume footprint indicator).
- If price sits dead-center at POC with flat tilt — there is no edge; the best trade is no trade.
Trading Directional Days
- Low OVL + named side = trend day. Buy pullbacks above POC when tilt is positive; sell rallies below it when negative.
- Watch for value-area migration: today's profile shifted beyond yesterday's VA with a strong tilt — the market has relocated and will likely continue.
- Thin profile zones above VAH act as air pockets — price moves through them quickly; they make good targets, bad entries.
The Settings That Matter
| Setting | Advice |
|---|---|
| Profile Period | 23 on H4 gives a session-sized picture; smaller on scalping timeframes |
| Value Area % | 70 is classical; 68 tightens, 80 widens the band |
| Balance Tilt % | 5 = name a side only on clear dominance; raise to 10 for stricter calls |
| Engine | Geometric everywhere; Intrabar for lower-TF precision; Footprint only on tape brokers |
Download: free volume profile indicator for MT5. Deep strategy: 25 confluence setups with volume profile + footprint.
FAQ
What is the difference between volume profile and market profile?
Market profile is built from time at price; volume profile is built from traded volume at price. Our indicator uses volume, so POC/VAH/VAL reflect where business was actually done, not just where time was spent.
How is the value area calculated?
Starting at the POC, the algorithm expands outward, adding the heavier neighboring level each step, until the accumulated volume reaches the target percentage of the total — the classical expansion method.
What does a DRIFT reading mean?
The profile's self-check found its curve math out of tolerance (parts-per-million). It is a health warning about the drawing, not a market signal — wait for EXACT before trading off the profile.
Which timeframe is best for volume profile?
H1-H4-D1. On those timeframes the profile represents real business over a meaningful period; below H1 the picture becomes noisy.
Can I combine volume profile with a footprint chart?
Yes — that combination is exactly what our free toolset is built for: the profile gives the macro bias, the footprint gives the entry trigger. See the 25 setups article.