VPVR Explained Simply: A Trader's Secret Map for PSX Stocks
VPVR sounds complicated, but it's actually one of the most powerful tools a trader can use to understand what's happening on the Pakistan Stock Exchange (PSX).
In simple terms, VPVR (Volume Profile Visible Range) is like a secret map that shows you exactly where the most buying and selling has occurred for a stock at different price levels.
Why Do I Need This Map for PSX Trading?
When you look at a normal stock chart, you see volume bars at the bottom—that tells you when a lot of trading happened.
VPVR is different: it shows you at what price the trading happened. This is crucial because it answers one simple question: "Where did most traders agree on the price?"
Imagine a busy stock like Engro Corporation (ENGRO). VPVR shows you the price where most of the shares changed hands. This price level is an anchor for the stock.
The 3 Key Clues VPVR Gives You:
1. The "Fair Price" (Point of Control - POC):
This is the price where the most trading volume occurred.
Think of it as the price everyone currently agrees is the "right" value. The stock tends to be pulled back to this price.
2. The "Strong Walls" (High Volume Nodes - HVN):
These are areas where trading was heavy.
When a stock drops to one of these levels, it often hits a "support wall" and bounces back up.
When a stock rises to one of these levels, it often hits a "resistance ceiling" and turns back down.
3. The "Fast Lanes" (Low Volume Nodes - LVN):
These are price areas where very little trading happened.
If a stock price starts moving into one of these zones, it often zips through very quickly because there is little resistance.
How to Use VPVR to Trade PSX Stocks
VPVR is essential for the Pakistan Stock Exchange because it helps you identify the strong historical zones that local investors and institutions respect.
Find Strong Trading Levels: Look for the tall bars on the VPVR (POC and HVNs). These are your best candidates for setting entry and exit points. For example, if a PSX stock is falling, you might plan to buy when it hits a strong HVN support wall.
Plan Your Trade: Don't enter a trade right at a "Strong Wall" (HVN). You want to trade around them. If a stock is trading below the "Fair Price" (POC), it might be a signal that selling pressure is dominant.
Confirm Big Moves: If a stock on the KSE-100 is breaking a major resistance level, check the VPVR. If the breakout occurs over a huge HVN, it confirms the move is serious and likely to continue.
The takeaway? VPVR takes the guesswork out of finding important price levels. It shows you where the big money has been, making it easier to plan smarter, more confident trades on the Pakistan Stock Exchange.