The Ichimoku & Volume Profile Strategy is a high-level confluence approach that combines the trend-tracking precision of the Ichimoku Cloud with the institutional insight of Volume Profile. This strategy enables traders to trade with the dominant trend while pinpointing high-probability entry zones based on real volume distribution. It’s especially effective for swing and intraday traders in forex, indices, and commodities.

Why Combine Ichimoku and Volume Profile?

Ichimoku Kinko Hyo reveals trend direction, momentum, and structure using its five elements:

• Kumo (cloud): trend and support/resistance
• Tenkan-sen: short-term trend
• Kijun-sen: medium-term equilibrium
• Chikou Span: confirmation
• Leading Span A/B: projected S&R

Volume Profile provides a breakdown of volume traded at each price level, highlighting:

• Point of Control (POC): highest volume level
• Value Area High (VAH) and Low (VAL): where 70% of the volume occurred
• Low Volume Nodes (LVNs): rejection zones often used by institutions

When used together, these tools help define both directional bias and institutional value zones.

Strategy Objective

The goal is to trade in the direction of the trend (confirmed by Ichimoku) and enter at or near high-volume price areas (confirmed by Volume Profile) with price action confirmation.

Step-by-Step Strategy

1. Confirm the Trend with Ichimoku Use the H4 or Daily timeframe:

• Bullish setup: Price above the cloud, Tenkan-sen above Kijun-sen, Chikou Span above price
• Bearish setup: Price below the cloud, Tenkan-sen below Kijun-sen, Chikou Span below price

Only trade in the direction of the cloud-based trend unless there’s a clear structure break.

2. Load Volume Profile Use session, weekly, or fixed range Volume Profile to identify:

• POC: price most traded
• VAH and VAL: value range extremes
• LVNs: low-volume rejection zones

Mark the areas where Volume Profile and Ichimoku structure align—for example, a Kijun-sen line overlapping with the POC or VAL.

3. Wait for Price Interaction with Volume Zone On the M15 or H1 timeframe, observe:

• Pullback to VAL, POC, or LVN in trend direction
• Price rejection candles or structure breakouts
• Breakout from VAH with Ichimoku confirmation

4. Confirm Entry with Price Action Look for:

• Bullish or bearish engulfing candles
• Pin bars at VAL/VAH or POC
• Internal break of structure or ChoCH (change of character)

5. Place Stop Loss and Take Profit

• Stop Loss: Below the cloud or Kijun-sen (longs), above the cloud or Kijun-sen (shorts), or just beyond the volume zone
• Take Profit: Next high-volume node, prior swing high/low, or trail using the Kijun-sen

Example: EUR/USD Bearish Setup

• Daily chart: Price is trending below the cloud, bearish Tenkan/Kijun cross, Chikou Span confirms
• Volume Profile (fixed range): POC aligns with lower Kumo boundary at 1.0860
• M15 chart: Price retests 1.0860 and forms a bearish engulfing pattern
• Entry: 1.0855
• Stop Loss: 1.0885
• Take Profit: 1.0780
• Reward-to-risk: 2.5:1

Best Confluences to Look For

• POC aligning with Kijun-sen or cloud edge
• VAL or VAH near Tenkan/Kijun cross zones
• Volume rejection from LVNs that coincide with Ichimoku support/resistance

Benefits of the Strategy

• Filters trades with both structure and volume
• Aligns with institutional footprints for smarter positioning
• Offers clear, structured entries and exits
• Reduces reliance on guesswork or single indicators

Common Mistakes to Avoid

• Trading against the Ichimoku trend
• Ignoring volume structure—POC/VAL/VAH should guide entries
• Skipping price action confirmation
• Entering too early before a retest or rejection forms

Conclusion

The Ichimoku & Volume Profile Strategy is a professional-grade system that blends trend and volume seamlessly. It’s ideal for traders who want both structure and insight into where institutional activity is likely occurring. By combining Ichimoku’s clarity with Volume Profile’s depth, you gain a comprehensive trading framework that adapts to any market condition.

To apply this strategy with confidence and precision, enrol in our advanced Trading Courses designed to teach you how to trade with confluence, structure, and institutional awareness.