ZigZag Volume Profile [Honestcowboy]

The ZigZag Volume Profile Indicator is a combination of 2 very popular trading indicators, the volume profile and zigzag indicator. Instead of using predetermined sessions like traditional volume profile analysis. This indicator expands on zigzag indicators "legs" and draws a volume profile inside each zigzag leg.

What is a Volume Profile?

"Technical analysis tool showing trading volume at specific price levels, creating a horizontal histogram on the side of a chart to reveal areas of high buying/selling interest, unlike traditional volume bars showing volume over time. Key elements include the Point of Control (POC) for most traded price, the Value Area (VAH/VAL), identifying crucial support/resistance, and analyzing profile shapes (like D, B, P) to understand market balance and potential price targets, used by professionals to spot liquidity and market structure."

Key Differences

• Does not have a value area but distinguishes each column in relation to the biggest column in percentage terms.
  
• Does not take sessions into account instead using zigzag legs
  

🟦 CALCULATION
The zigzag volume profile first builds a standard zigzag indicator to find structure in the market. Using pivot points and a minimum % price move threshhold.

Then once it knows the zigzags it will use each leg as a time window to calculate a volume profile inside.


🔹Coloring each column:
The script will find the biggest column in the Profile and use that as a reference for all other columns. It will then decide for each column individually how big it is in % compared to the biggest column. It will use that percentage to decide which color to give it, top 20% will be red, top 40% purple, top 60% blue, top 80% green and all the rest yellow. The user is able to adjust these numbers for further customisation.

🟦 USAGE
The idea behind this indicator is, if you look at markets as different legs (moves) going in a zigzag pattern you might want to look deeper inside your previous moves and see where the actual liquidity/volume was during that move. The hypothesis here is you build trade ideas based on zigzags but then use the volume profiles.

Since volume and market structure are very well known concepts to discretionary traders I'm hoping this indicator might give some different perspective on this relation and help people create a trading approach based on it. Here's some quick cherry picked examples, just as a proof of concept:



🟦 SETTINGS

🔹ZIGZAG SETTINGS

• Price Deviotion % : This is the minimum price move in % term from last pivot price needs to move to form a new pivot for the zigzag.
  
• Pivot Legs (Left/Right): The amount of bars a high or a low needs to be higher/lower than to the left and right of the bar. 10 By default to create medium term zigzag
  

🔹Volume Profile

• Profile Rows: The amount of rows in Y axis the zigzag is going to be sliced into to create the volume profile. Higher number is more detailed volume profile but also uses more box objects which is maxed at 500. 25 by default
  
• Profiles to Display: The amount of volume profiles the indicator will draw back in time. Higher number means more history but also longer loading time. 20 by default
  

🔹Visual Settings
This part is pretty self explanatory and you have can manually select the colors used to create the volume profile. Refer back the the explanation about the "🔹coloring each column" section.