Volume Profile: Identifying Realistic Liquidity Pools for Scalping

Hey folks,

Been diving deep into Volume Profile lately, moving beyond just spotting the Point of Control (POC). I'm trying to refine my scalping strategies by focusing on identifying realistic liquidity pools, especially on lower timeframes like 15m and 1h for assets like BTC and ETH.

Most guides talk about high Volume Areas (HVNs) as support/resistance, which is standard. But I'm more interested in the 'Valleys' or Low Volume Nodes (LVNs). My hypothesis is that LVNs represent areas where price can move through quickly because there's less opposing volume. These could be prime zones for quick entries and exits if we can anticipate price rejection or continuation from adjacent HVNs.

I've been experimenting with different settings for the Volume Profile indicator, specifically trying to:

• Isolate LVNs that are sandwiched between two strong HVNs.
• Look for LVNs that form after a significant breakout from a consolidation range.
• Combine this with order flow data to see if there's actual order imbalance when price enters these LVN zones.

Has anyone had success using LVNs in this way for scalping? Are there specific Volume Profile settings or adjacent indicators you find crucial for confirming trades within these low-volume areas? I'm particularly interested in how you differentiate between an LVN that acts as a quick 'bleed-through' zone versus one that might actually flip into a support or resistance level after price interacts with it.

Looking forward to hearing your thoughts and experiences!

From my experience, your hypothesis about LVNs is absolutely spot-on for scalping. Price really does tend to accelerate through those areas because there's less volume to act as friction. I've found that when an LVN is situated between two strong HVNs, it's a prime candidate for a quick, decisive move.

One thing I've started doing is looking at the width of the LVN. A very narrow LVN might not offer as much room for momentum to build compared to a wider one. Have you noticed any correlation between LVN width and the speed or distance of the subsequent price move? Curious to hear your thoughts on that!

Interesting approach focusing on LVNs for liquidity! I've been playing around with Volume Profile too, and while HVNs are great for established zones, I agree that the 'empty' spaces in LVNs can be fascinating.

My take is that LVNs often act as acceleration zones. Price tends to rip through them because there isn't much resting volume to absorb the moves. So, for scalping, I look for LVNs that are adjacent to strong HVNs or significant prior price action. It's like the price is "breathing" into the LVN before hitting a wall of volume on the other side.

Have you noticed any specific patterns when price re-enters an LVN after a period of consolidation or a strong move away from it?

I've been seeing the same pattern, especially on lower timeframes. Your hypothesis about LVNs representing areas where price can move quickly is spot on. Think of them as less defended zones.

I tend to look for LVNs that are sandwiched between two significant HVNs. Price often whipsaws through the LVN to reach the next area of established volume. For scalping, a quick breakout through an LVN can be a signal to jump in, anticipating that momentum will carry it to the next HVN.

Have you experimented with using LVN depth as a filter? Deeper LVNs seem to offer less resistance, which might be more reliable for rapid scalps.