Value Area

Can somebody please explain what "Value Area" is and how to trade this area.

Cheers'
Rockey

Hi Rockey - I've moved your topic to the Market Profile part of the forum because Value Area is a Market Profile concept. The Value Area is an area demarcated by 2 prices which bound the "most traded in" part of a time period.

Technically the value area is 1 standard deviation away from the most traded at price which is the price which has the highest number of TPO's. Each time that the market trades at a price during a half hour bracket a letter is added to that price (one per half hour) and a vertically align bell curve is created. Page through some of the posts in the 2 Market Profile forums and see the Market Profile style chart. The middle chunk of that chart is the Value Area.

Typically, the upper and lower prices of the Value Area, know as Value Area High and Value Area Low (aka VAH and VAL) are seen as support and resistance lines - in their simplest terms.

Let me know if that makes sense. If not I'll try and explain again...

Is it possible that we can have you reinclude the VAH, POC and VAL numbers for the ES emini contracts? I have been using these numbers religiously in my trading and I was hoping that we could have them back at least for the ES emini contracts. It is an incredibly valuable trading tool. Thank you for your consideration of this request.

The VAH, POC, and VAL are posted daily to this topic: Value Area and POC - let me know if that is what you're looking for?

can someone explain the POC number and how one uses it to trade?

Typically it's used as a target because "most" trades took place there the previous day so a reasonable expectation is that the market will at the very least trade back to it. It's defined in the trading dictionary along with a number of other MP terms which may help you understand it.

hi , I was wondering where i can find , VAH VAL and POC for the NQ (tuesday march 27 th) they are not published in the the value area and POC topic
thanks in advance

Sorry. There were problems yesterday which prevented me from posting them. Hopefully back to normal today.

Hi

I am New to the site mypivots and look forward to contributing to it. I also like to thank daytrading for posting the Value Area up everyday.

I start of with my first question. Do you think the big players who trade ES look and trade around these Value Area's or is just for the guys on the floor

Cheers

Bill

It depends on WHY the big traders are trading the ES. If a big trader is a fund management company that's receiving a ton of cash over the next week and they need to invest it in the S&P500 then they might hedge the cash by buying the ES and reversing out of it bit by bit as they set up their equity portfolio. They won't care about any technical indicators because of what they're using the futures for.

Players of all size who are speculating in the market will be looking at the Value Areas because this is where "accepted value" is. If we move outside of the value area the longer term player is moving the market and there's a new dynamic.

Thanks day trader

Very helpfull...I am new to Market Profile. I'm an only Time & Sales guy...But It looks like I have found the right place to come to learn more about it...Great Site.

Cheers
Bill

The Market Profile TPO structure was created to proxy volume back in the days when volume data was difficult to come by and difficult to chart in this manner. Theoretically a volume profile should be superior but if more traders are using a Market Profile then that could swing the balance.