In cryptocurrency trading, an accurate understanding of the volume distribution of each trading session can help traders gain insight into market trends and seize opportunities. The Session Volume Profile (SVP) is a very effective tool to help you identify key support and resistance areas in each trading session.
What is SVP?
SVP shows the distribution of trading volume in a specific trading period. This analysis method allows you to better understand trading activities at different prices and help identify the balance point of market forces. By understanding the distribution of trading volume in each period, you can accurately grasp the volatility of the market.
How to use SVP effectively?
Choose the right trading session: Different trading sessions will have different levels of market activity. Short-term traders can choose shorter sessions, such as a few hours. Long-term investors may pay more attention to the daily or weekly SVP chart to determine trend support or resistance areas.
Identify High Volume Zones (HVN) and Low Volume Zones (LVN): In the SVP chart, high volume zones usually reflect strong market support or resistance, while low volume zones indicate faster market fluctuations and are suitable for finding short-term opportunities.
Combined with market volatility: SVP is not just about observing the distribution of trading volume, it can also help you predict market volatility. For example, when the price breaks through the low volume zone, it usually indicates that the price will fluctuate rapidly, providing you with more trading opportunities.
Practical Application
In trading, when the SVP chart shows a high volume area, you can use it as a key support or resistance reference and combine it with other technical indicators such as moving averages, RSI, etc. to form a more reliable trading strategy. When the price enters these high volume areas, it is often accompanied by a strong market reaction.
in conclusion
The trading session volume distribution chart (SVP) is one of the indispensable tools in virtual currency trading. It can help you better analyze market trends and improve the accuracy of your trading decisions. Mastering the use of SVP will allow you to navigate the complex market with ease and make smarter buying and selling decisions.
