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Interactive Brokers Volume Profile

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by Gavin in Blog
August 13, 2021 3 comments
interactive brokers volume profile

An Interactive Brokers volume profile can be added to TWS charts and today you will learn how to do it. We will look at a couple of examples too.

Contents

What Is A Volume Profile Chart?

Within Interactive Brokers, or any broker to be honest, a volume profile chart can be useful for both short-term traders and long-term investors.

A volume profile chart, sometimes referred to as a market profile chart, gives clues as to the points of control for a stock.

With price, volume and time period shown on a single chart, the Interactive Brokers volume profile can show potential levels of support and resistance.

Below is an example of a 15-minute chart of AAPL taken from late June 2021.

From the volume histogram on the right, we can see that there is a potential level of support around 132.

Trades may use this information to structure a bull put spread trade with the view that AAPL will not break through 132.

interactive brokers volume histogram

How To Read Interactive Brokers Volume Profile

The volume profile chart is similar to a regular chart in that we have price on the vertical scale (y-axis) and time on the horizontal scale (x-axis).

We have now added a third parameter which is the volume histrogram to the right of the price labels.

The longest horizontal lines represent the largest amount of trading volume.

The price level with the greatest volume is known as the point of control.

Going back to our AAPL example, bulls took control once price broke out above 132 and went on a quick rally to 134.

This can be very useful information for short-term traders.

Below is the same chart but using hourly candles.

We can see a lot of volume between 129.50 and 132.

This should provide a strong support going forward.

Likewise, there is a volume void between 127.50 and 129.

Therefore, if AAPL breaks below 129, prices could quickly decline to 127.50 due to the lack of volume support.

interactive brokers market profile

Here we have another example using BAC.

This time we see the point of control is above the current stock price.

If BAC does rally, the stock will likely have a hard time getting above the 41 – 42 area.

market profile interactive brokers

How To Add Volume Profile In How To Read Interactive Brokers Volume Profile

Unfortunately, it is not obvious how to add the volume profile to Interactive Brokers charts, but luckily, you’ve come to the right place.

Within the chart, go to View and then Volume Histogram.

See the image below for details.

the image below for details

Toggle the radio button to on and you are good to go.

It may take a few seconds for the volume profile to populate, I guess there are some heavy calculations that need completing in the background.

One other thing to note is that it appears only possible to add the volume histogram to hourly charts and other short-term charts.

Daily charts do not seem to have it which is quote annoying.

Conclusion

There you have it.

Now you know how to add volume profile to Interactive Brokers charts and how to read it.

We hope it helps you in your trading.

Trade safe!

Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek advice from a licensed financial adviser.

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3 Comments
  1. Je je says:

    Thanks like you mentioned, not obvous at all to find!!

    1. Gavin says:

      Yes, not obvious at all. At least you know now.

  2. Anonymous says:

    thank you great find

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Options Trading 101 - The Ultimate Beginners Guide To Options

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