> For the complete documentation index, see [llms.txt](https://help.hydravision.ai/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://help.hydravision.ai/products/asset-profiler/band-compression.md).

# Band Compression

{% hint style="warning" %}
**The common misreading.** That 0% compression means the asset is cheap to trade. It doesn't. It means costs took no **range** away from you. You still pay them. Check [Cost at entry](/products/asset-profiler/cost-at-entry-and-the-cost-budget.md) for that.
{% endhint %}

### What it means

Your asset has a natural range of step sizes, set purely by how much it moves. Then costs come along and remove the bottom of it, because below a certain step the profit you'd earn isn't worth what you'd pay to earn it.

Band compression is the share of that natural range costs have taken.

The ruler shows it directly. Red on the left is what's gone. Green on the right is what's left. The two figures underneath are the movement floor and the movement ceiling, the range you'd have had if trading were free.

### How to read

**EURUSD — 0% compressed.**

```
0.0%   [████████████████████████████████]  usable band
       12.97 pips — volatility floor        23.77 pips — volatility ceiling
```

Nothing taken. The cost floor sits at 7.56 pips, well below where the asset's own noise already puts the floor. Costs are not the constraint here; the asset is.

**EURCAD — 52.2% compressed.**

```
52.2%  [███████████████ eaten by cost ████|██████ usable band ██████]
       13.15 pips — volatility floor                24.10 pips — volatility ceiling
```

Just over half the range is gone. Movement alone would have supported a step from 13.15 pips; the spread and commission push the real floor to 18.86.

### Why losing the bottom matters more than it sounds

It's tempting to shrug at this. You've still got 18.86 to 24.10 pips. That's a workable range.

{% hint style="warning" %}
The problem is *which* part you lost. Tighter steps fill more often. That's the end of the range where a grid does most of its work. Losing it doesn't just narrow your options, it removes the setting that would have generated the most activity.
{% endhint %}

There's a second effect, less obvious. A compressed band is a narrow band, and a narrow band gives you less room to adjust. EURUSD lets you move between 13 and 24 pips as you tune. EURCAD gives you 19 to 24. If your testing suggests you want to go tighter, on EURCAD you simply can't.

### The three states

| Compression                              | What it means                                                                                                                                                                                                          | What to do                                                                              |
| ---------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------- |
| **Near 0%**                              | Costs take nothing off the range. The floor is set by the asset's own noise.                                                                                                                                           | Nothing. This is the healthy case.                                                      |
| **Anywhere from a few percent to \~90%** | Costs have taken the tight end. Workable, but you're paying for it. Above 1% the verdict reads Marginal, unless one of the [Not viable](/products/asset-profiler/the-verdict.md#not-viable) checks has already failed. | Read Cost at entry, then check whether the session lever helps.                         |
| **Effectively 100%**                     | The cost floor sits above the whole range. The band collapses to a point.                                                                                                                                              | The verdict is *Not viable at these costs*. Look at account type or a different symbol. |

### What actually moves this number

Compression is the gap between what the asset's movement allows and what your costs demand. So it moves when either side changes:

* **A tighter spread** — a different account type, or a broker with better pricing on that symbol.
* **Lower commission** — worth checking on assets where commission dominates the entry cost.
* **More volatility** — a more active market lifts the movement floor, which can close the gap without anything about your costs changing. This is why an asset can be Marginal in a quiet window and Tradeable in a busy one.
* **Trading a cheaper session** — this one doesn't change the number on the report, because the band is calculated on the average spread across all sessions. But it changes what you actually pay. See [Session Cost](/products/asset-profiler/session-cost.md).

### What to do with this

* Compression above roughly a third is worth pausing over. It's the difference between an asset that suits grids and one that merely tolerates them.
* If it's high and the spread is the cause, check the session panel before giving up on the asset.
* Compare compression across a shortlist — it travels between assets better than step size does.