![]() ![]() How to Calculate Value Area:Įven though you get the value area levels served on a silver platter, it’s still important to know how the volume profile blocks are calculated. This will give you a better understanding of how valuable the value area levels can be. ![]() Moving forward, let’s see the value area calculation process. Note* The Value Area Volume is by default set at 70%. While the value area low shows the lowest price level within the value area and the value area high shows the highest price level within the value area. The Point of Control Trading Strategy (POC) shows the single price level at which the most amount of volume was traded. The Volume Profile value is constructed of 3 parts: Value area is the price range where 70% of the trading volume occurred. ![]() In other words, the value area levels highlight where 70% of the entire volume occurred during a particular trading session.įor example, if one profile individual bar displays a volume of 10, it means that 7 out of 10 shares that traded on a stock occurred within the value area levels. More, the volume profile theory says that 70% of all asset prices will cluster around the value area.īecause 70% is a rough approximation of one standard deviation on either side of the mean. In volume profile analysis, the value area measures where the most buying and selling volume took place. Let’s start with the Volume Profile Value Area definition and continue with how Value Area trading really works.ġ0 Final Words – Value Area Trading What is the Value Area Trading? More specifically, we’re interested in using the Value Are in Volume Profile. And, here is where the Volume Profile strategy also is known as the Market Profile indicator comes to rescue us. However, not all the volume is important, because only institutional buying and selling pressure can move the price of a stock. At the end of the day, the price of any asset classes (forex currencies, stocks, futures, options, cryptocurrencies, etc.) is a supply and demand trading. Let’s start with the basic: volume represents the amount of buying and selling that goes on. One of the most important things you should track in trading after the price is VOLUME. Free volume profile indicator free#Make sure you hit the subscribe button, so you get your Free Trading Strategy every week directly into your email box. If this is your first time on our website, our team at Trading Strategy Guides welcomes you. In this guide, we’re going to teach you how to use the value areas as well as how to identify where the real big institutional traders are buying and selling. You can use the Value Area trading rules to day trade any market and increase your profitability. Learn the Value Area trading strategy if you want to master how institutional traders find support and resistance levels. ![]()
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