How To Find True Rally-Base-Rally/Drop-Base-Drop Zones With This Tradingview Tool

Listen up, I’ve got a confession to make… I’m just not that into RBR/DBD zones!

Shocking, right?

But seriously, they’re more inconsistent than a bad Wi-Fi connection, and let’s face it, price treats them like they’re invisible. Compared to their more reliable siblings – the RBD/DBR zones – they just don’t make the cut for effective use.

But wait!

Before you start throwing tomatoes, hear me out…

Every now and then, some of these unpredictable RBR/DBD zones decide to play nice and actually work. And, I stumbled upon this nifty little tool on Tradingview that makes spotting these high probability RBR/DBD zones easier than finding a cat video on the internet.

Enter: Volume profile.

This tool is like a spotlight in the dark, revealing high volume prices where the bigwig banks are taking action. This means we can use it to confirm whether the banks threw their weight around causing an RBR/DBD zone to form, and thus, whether it’s got a good shot at causing a reversal.

Got your interest piqued?

Well, strap in and let’s dive into what this volume profile thingamajig actually is…

What Is Volume Profile And How Does It Work?

Alright, let’s get down to business!

Here’s the scoop – if you’re itching to get your hands on the Volume Profile tool on Tradingview, you’ve gotta be a Pro or Pro+ user.

Yup, you heard it right – it’s strictly VIP access!

But hey, don’t sweat it, ’cause you can grab a free trial and take it for a spin without shelling out a penny. The trial lasts for 30 days and unlocks all the cool features and tools that Pro users rave about. Just a friendly heads-up – make sure you bow out of the trial before the 30-day mark, otherwise, they’ll bill you for the next month faster than you can say, “What the?!”.

Tradingview is like the Babe Ruth of tools, and the Volume Profile tool snugly nestled under the indicators tab is a real home run!

This little gem is a nifty twist on the old-school Market Profile tool, whipped up by Peter Steidlmayer back in the 80s.

Volume Profile spices up the standard volume that’s usually lounging below our charts and flings the bars over to the right side of the screen. This way, the volume sits in-line with the market prices instead of below the candlesticks.

It also splits the bars, letting you peek at whether the volume was leaning towards buying or selling.

By showcasing price volume instead of candle volume, this tool dishes out a crystal-clear snapshot of the market’s heartbeat and where the volume kicked in.

We all know the drill – unless you’re a whiz at VSA, candle volume doesn’t exactly spill the beans.

Sure, you can tell if a candle had more volume than a rock concert or was as quiet as a mouse, and that’s kinda cool every once in a while. But for your daily trading grind, that info isn’t exactly gonna rock your world. It’s about as revealing as a brick wall.

But seeing the price volume?

Now, that’s a different story!

For starters, you can easily spot the big kahunas where the action really heated up – it’s like a neon sign pointing to potential future price reversals and stalls.

And the icing on the cake?

The volume is as accurate as a Swiss watch.

We’re talking about cumulative volume huddled around a price, not just the volume from a random candlestick or two. This gives us a sneak peek at where the banks have set up camp and how and where the retail traders found themselves in a bit of a pickle.

See those bars lined up with prices instead of candles?

Yeah, they don’t match up perfectly.

Instead, they cover a small price range, lying all nice and horizontal-like to display volume around each price point.

Now, check out the blue and orange bars.

Blue’s for buy, orange’s for sell.

Pretty straightforward, right?

Honestly, the difference between ’em doesn’t really matter for our purposes. Want to see the exact difference? Hover over a bar and peek at the numbers in the top left corner. The main thing we’re looking for? A high level of activity around a bunch of prices.

That’s when big bars start forming.

But here’s the thing: Whether that volume was buy or sell doesn’t really matter – it doesn’t give us any extra hints about what the banks were up to.

So, yeah, it’s pretty much irrelevant.

Now, let’s chat about how to open and set up this volume profile tool.

You’ll find the volume profile tool hiding inside the Indicators tab on Tradingview. Just scroll down past all the indicator options, and voila! There it is.

Hey, let’s spice this tool exploration up a notch, shall we?

There are a few variations of this nifty tool, but here’s a hot tip – stick to the visible range tool at the bottom. You know the one, right?

It’s the show-off that displays the volume according to all the candles currently on display. The other variations…well, they’re like party guests that forgot to bring the snacks. They either don’t show price volume or only reveal minor volume.

To crack open the volume profile, just give that button a tap inside the indicators tab. Easy peasy…

Now, as with most tools, volume profile can be a bit of a diva.

Out of the box, it doesn’t quite hit the mark – the bars are too chunky, and some are even playing hide-and-seek on the chart. So, you’ve got to roll up your sleeves and tweak a few things in the settings menu to get it singing your tune.

Just right-click those bars and select Settings from the drop-down menu:

Once you’ve got the menu open, make a beeline for the inputs tab, and change these settings:

• Row Size – Crank it up to 100!
• Value Area Volume – Also, ramp it up to 100!

Then, hit the okay button, and zip back to the chart…

You should see more bars popping up and they should be more visible, not just huddled in the middle.

And there you go!

You’re all set.

Now go watch that chart like a hawk!

How To Use Volume Profile To Find RBR/DBD Zones

Alright, let’s get real about RBR/DBD zones.

The mega-problem I’ve got isn’t that they’re completely useless… nah, it’s more about the guessing game. You see, figuring out which zones will cause price to reverse?

That’s like finding a needle in a haystack.

Plus, with so many of RBR/DBD zones flopping, trading them consistently is… well, let’s just say it’s as easy as herding cats with a mouse.

The result?

A whole lot of ouch in the form of unnecessary losses.

But hold on!

Enter the hero of our story: volume profile.

This nifty tool helps us sniff out those elusive high probability zones.

Here’s the deal: Volume profile lights up the areas where heavy-duty volume has flowed into the market. High volume is like a flashing neon sign pointing to bank activity.

So if a rally-base-rally/drop-base-drop zone has heaps of volume backing it up, that’s a hint the banks might roll out the red carpet and use that zone.

Which, in turn, means a better chance of a reversal.

Take a look at these zones below…

Under normal circumstances, we’d shrug off these two zones. They’re rally-base-rally, forming mid-move, which kinda suggests the banks didn’t make a big splash to form them.

But just wait till we bring in the volume profile…

Whoa, right?

The tool pulls back the curtain and shows us these zones are jam-packed with volume. It looks like the banks have been making some big moves, in this case, placing buy trades.

Now, if price tumbles, we’d likely see a reversal or at least a bit of a retracement from these zones. Why? ‘Cause the banks aren’t gonna let the price crash through their buy trades… That’s a fast track to losing a TON of dough.

Instead, they’d swoop in and either place more trades or hit the exit button by sparking a retracement.

So now you get how volume profile can be your secret weapon in spotting primo RBR/DBD zones. But how do you track them down yourself?

Well, here’s the game plan:

Kick off by hunting down the zones you wanna see the volume for, then load up the volume profile on the chart using the settings I explained oearlier – right-click and hit “Settings” to bring up the menu.

The volume profile we’re using (visible range) displays the volume based on what’s currently in view on the chart.

What that means is, if you zoom in/out or jostle the chart around, the volume will shift to include the new visible price action – and toss out what’s now out of sight. So to nail down the right volume for your zone, you got to position the chart just right in relation to the zone and at the proper zoom level.

To do that: hit the reset chart button (or bash alt-r), then zoom out four times.

Then, scoot the chart around so that the right side of the graph is snuggled up next to the current candle, just like I’ve done in the image below.

This rundown should give you a decent glimpse of the volume in each zone.

Now, if the zone is chilling way back, out of sight, just shuffle the chart until the left side cozies up to the point where it all started. That’s your cue to check out the volume.

Remember, we gotta keep things fresh!

Volume’s like yesterday’s donuts, it gets stale over time.

This, my friend, messes with the zone’s mojo. And let’s be real, we’re all about snagging the cream of the crop when it comes to RBR/DBD zones.

Your mission, should you choose to accept it, is to figure out how sky-high the volume is for the zone.

Now, don’t go expecting a crystal-clear answer from me on what this should be. It’s all subjective, like pineapple on pizza. But, what you see above is a ballpark figure for the bare minimum a zone should pack to hint at a possible reversal once price swings back.

But hey, if the biggest bars are lower than this…

It’s probably best to give the zone a wide berth.

Sure, you might witness the occasional reversal, but most of the time, the price will treat the zone like a distant relative at a family reunion. It’ll either ignore it completely or stall, maybe backtrack a smidge, before moseying along in the same direction.

Summary

With volume profile in your toolkit, you’re now primed to hunt down those high-probability RBR/DBD zones. But don’t go thinking every zone with a beefed-up volume is gonna pull a U-turn.

In the trading world, there are no sure bets.

But, and here’s the kicker, this will pump up your success rate, and that, my friend, should help you hit the jackpot.

And hey, don’t forget to check out my post “Why You Should Avoid Rally-Base-Rally/Drop-Base-Drop Zones” to get the lowdown on why RBR/DBD zones can be about as reliable as a chocolate teapot… that is, if you haven’t already.