Most retail traders analyze markets using price over time — candlesticks, indicators, and chart patterns. However, professional and institutional traders often focus on something more important:
👉 Volume traded at specific price levels.
This is where the Anchored Volume Profile (AVP) becomes a powerful trading tool. It allows traders to identify high-probability pullback entries inside strong trends, especially when combined with the 50%–61.8% Fibonacci retracement zone.
This article explains:
Anchored Volume Profile (AVP) is a volume-based trading indicator that displays the distribution of trading volume across price levels, starting from a user-defined anchor point (such as a major swing high or swing low).
Unlike traditional volume indicators that measure volume per candle or time period, AVP measures:
Volume per price level
This allows traders to identify:
In short:
Anchored Volume Profile shows where large market participants have committed capital.
Traditional volume indicators answer:
“How much volume traded during this candle?”
Anchored Volume Profile answers:
“At which price did most trading activity occur?”
Markets do not remember time — they remember price.
High-volume price levels often act as:
This makes AVP extremely effective when trading retracements within trends.
In trending markets, price rarely moves in a straight line. Strong trends usually retrace into the:
This area is commonly known as:
Institutional traders use this zone to:
However, Fibonacci retracements alone do not provide enough confirmation. This is where Anchored Volume Profile adds precision.
When the 50%–61.8% Fibonacci retracement overlaps with:
You get a high-probability pullback zone with:
✅ Trend continuation bias
✅ Evidence of institutional participation
✅ Clear invalidation level
✅ Favorable risk-to-reward
Instead of chasing price breakouts, this method allows you to enter trades at areas of previous market acceptance.
On the NZD/CHF chart:
This creates a strong confluence zone where:
This setup provides:
✔ Lower drawdown
✔ Clear invalidation
✔ Larger reward potential
✔ Logical price behavior
Many traders enter trends too early or chase price after breakouts.
Using Anchored Volume Profile with Fibonacci retracements:
Instead of buying highs, you buy:
Where the market previously found value.
Most traders focus on candlesticks.
Professional traders focus on where volume accumulated.
When you combine:
✔ Market structure
✔ Fibonacci retracement
✔ Anchored Volume Profile
You stop guessing and start trading based on market memory.
Price moves through time…
but it reacts to price levels where volume lives.
Thank you for reading this article , leave a comment if you learned something usefull.
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