When you’re knee-deep in the markets, it’s not just about price, but volume plays a huge role in shaping price movements. That’s where the Volume Point of Control (VPOC) comes in.

It’s one of those tools that once you understand, you’ll wonder how you ever traded without it.

In simple terms, VPOC tells you where the most trading activity (by volume) has occurred for a given period. This price level is like a magnet for future price action.

Volume Point of Control (VPOC) in Forex Trading

The Volume Point of Control (VPOC) is basically the price level where the highest amount of trading volume occurred during a specific time frame.

Imagine all those massive trades from institutions and big-time players—VPOC shows where that activity clustered.

When you’re looking at a volume profile on a chart, the VPOC is the highest peak in the volume histogram.

In essence, VPOC gives you a sneak glance into where the “big money” is moving.

It helps you spot key areas where price is likely to stick around or react and that ability makes it a vital tool for spotting support and resistance levels. Think of it as a bullseye on your chart where buyers and sellers have found common ground.

How Traders Interact with the VPOC Indicator

So, how can you put the VPOC to work in your trading? There are a few ways to leverage this great tool depending on your style of trading: 

1. Support and Resistance Levels

The VPOC acts as a natural support or resistance line. When the price reaches this level, it often pauses or reverses, giving you great opportunities to enter or exit trades.

2. Reversal Trading

If the price moves too far away from the VPOC, it can be a signal that the market is overextended. A lot of traders use this as a cue to look for reversal setups.

Essentially, when the price gets too far from where the bulk of volume has traded, it tends to snap back.

3. Breakout Confirmation

On the flip side, when the price breaks out above or below the VPOC with conviction (meaning volume supports the move), it can indicate a strong continuation of that trend.

4. Trend Analysis

 You can also use the VPOC to gauge whether a trend is likely to continue. In an uptrend, for example, if the VPOC keeps shifting higher, that’s a sign that buyers are coming in at increasingly higher prices a good indication that the trend has legs.

How to Set Up the Volume Point of Control on Different Trading Platforms

Setting up the VPOC on your trading platform doesn’t have to be a headache. Whether you’re using MetaTrader, TradingView, or NinjaTrader, the process is pretty straightforward. Let me walk you through the basics for each:

1. MetaTrader 4/5 (MT4/MT5)

Unfortunately, MT4 and MT5 don’t have a built-in VPOC indicator, but don’t worry, you can easily find a custom one.

i. Search for “VPOC Indicator for MT4/MT5” online (there are a bunch of free options out there).

ii. Download the indicator and save the file.

iii. Go to MetaTrader: Click on File → Open Data Folder→ MQL4 or MQL5 → Indicators, then paste the file.

iv. Restart your platform and load the VPOC indicator from the Navigator window.

You should see the volume profile with the VPOC clearly marked on your chart.

2. TradingView

If you’re on TradingView, you’re in luck. They make applying the VPOC a breeze:

i. Open your chart and head to Indicators.

ii. Type in Volume Profile.

iii. Choose either Session Volume or Visible Range depending on your needs. The VPOC will automatically appear as the highest volume node.

3. NinjaTrader

NinjaTrader is a great platform for order flow analysis, so here’s how you can set up the VPOC:

i. Open your chart and navigate to the Indicators panel.

ii. Look for Order Flow Volume Profile.

iii. Select the session or time period you want to analyze, and voila. the VPOC will be right there on the chart.

How to Use the Point of Control (PoC) in Forex Trading

Now, let’s talk about the Point of Control (PoC) and how it fits into forex trading.

While VPOC focuses on volume, the PoC is more about where the market has spent the most time trading. This can be incredibly useful in spotting key price levels in currency pairs.

Here are some practical ways to use the PoC in your trades:

Identify Support/Resistance:

he PoC often becomes a natural level of support or resistance. You’ll find that price tends to gravitate toward this area, especially during consolidations.

Spotting Reversals

When price moves far from the PoC, especially in low volume areas, there’s often a high chance that it will reverse back toward the PoC. This is useful in mean-reversion strategies.

Following Trends

If the PoC keeps shifting higher in an uptrend, it suggests that demand is strong at higher price levels, which can give you confidence to hold onto long positions. In a downtrend, a lower PoC means sellers are dominating.

Take-Profit and Stop-Loss Placement

 The PoC is a great reference point for placing stops and take-profit levels. Many traders place their stops just beyond the PoC, as price tends to revisit these areas.

Pros and Cons of the Volume Point of Control Indicator

Like every tool in trading, the VPOC has its strengths and weaknesses. Let’s keep it real:

Pros

i. Pinpoint Key Price Levels

VPOC shows you exactly where the market sees value. This can help you enter or exit trades with more confidence, knowing that you’re working around areas where significant trading activity has taken place.

ii. Support and Resistance Accuracy

The VPOC often serves as a key support or resistance level. Instead of using arbitrary levels, you’re basing your analysis on real trading data.

iii. Works on Multiple Timeframes

Whether you’re a day trader, swing trader, or scalper, the VPOC adapts to the timeframe you’re analyzing. It gives you insights whether you’re focused on short-term price movements or longer-term trends.

iv. Great for Reversals

 If you like catching reversals, VPOC gives you a perfect reference point. When the price moves too far away from the VPOC, you can start looking for a potential pullback or reversal.

Cons

i. Decentralized Volume in Forex

 Unlike the stock or futures market, forex doesn’t have centralized volume data. You’re often relying on tick volume (number of price changes) as a proxy, which isn’t the same as actual traded volume. This can make VPOC less reliable in certain situations.

ii. Not a Standalone Tool

 VPOC shouldn’t be used in isolation. It’s best combined with other indicators like moving averages, RSI, or momentum tools to get a fuller picture of the market.

iii. Lagging Nature

Since VPOC is based on historical data, it can lag in fast-moving markets. In highly volatile sessions, price can move far from the VPOC before you get a clear signal, making it harder to time trades perfectly.

How to Interpret the VPOC in Forex Trading

Understanding VPOC in forex revolves around identifying key levels that represent the price where the highest amount of trading volume occurred over a specified period. Here’s what you should be watching for:

1. Support and Resistance Levels

 The VPOC acts like a magnet for price. If the price is above the VPOC and starts to move downward, there’s a good chance it’ll find support around this level. S

imilarly, if the price is below the VPOC, it can act as a resistance level. Knowing these areas gives you a heads-up on potential reversals.

2. Market Balance or Imbalance

 When the price hovers around the VPOC, it signals that the market is in balance—buyers and sellers are agreeing on a fair value.

When price moves away from the VPOC, that’s a sign the market may be becoming imbalanced, offering opportunities to trade the breakout.

3. Trend Continuation or Reversal

A rising VPOC indicates that buyers are in control and the trend is likely to continue upward.

But, a falling VPOC points to sellers dominating the market. However, if price deviates too far from the VPOC, it could signal that the trend is overextended and a reversal is on the horizon.

 Frequently Asked Questions 

1. Can I use the Volume Point of Control in short-term forex trading?

Yes! While VPOC is often used by longer-term traders, it can be extremely helpful in short-term strategies, especially if you’re a day trader or scalper. It helps you spot key areas of interest during intraday price swings.

2. What is the difference between VPOC and the traditional Point of Control (PoC)?

VPOC focuses on volume which is the price level where the most trading volume occurred. On the other hand, PoC (without the volume component) refers to the price level where the market spent the most time trading.

Both can be used to identify key levels, but VPOC gives more weight to where the actual volume of trades took place.

3. How can I confirm trades using VPOC?

You can confirm trades by combining VPOC with other technical indicators.

For example, you might wait for a price to hit VPOC support or resistance and then use RSI or MACD to confirm whether the price is overbought or oversold before making your move.

4. How reliable is the VPOC in Forex trading?

VPOC can be very reliable, but remember, forex lacks centralized volume data. As long as you account for that and use VPOC with other indicators, it can be a valuable part of your trading toolkit.

Bottom Line

Whether you’re a forex veteran or just starting out, adding VPOC to your toolkit can give you an extra edge. It helps you understand where the majority of market participants are active, and that’s crucial when planning your entries, exits, and risk management.

Just keep in mind that it works best when paired with other tools, especially in a decentralized market like forex where volume data isn’t always crystal clear.

Ready to start using VPOC in your trading? Take your time to set it up on your platform, test it out in different scenarios, and watch how it improves your market analysis. In forex, having that extra layer of insight can make all the difference.