Value Area

In the case of a volume profile, it is the range where approximately 70% of the volume traded. In the case of a market (time) profile, it is the range where price spent approximately 70% of the time.

Mathematically, either end of the area represents approximately one standard deviation from the mean. It is far more important how this value area (and the point of control) is progressing, than price itself.

As the illustrations above and below include both a Market (time) Profile and a Volume Profile, you can see that both the Points of Control and the Value Areas can differ as to each type of profile, but they are often the same or close. When they differ significantly, the differences can have implications.

Since the markets are a continuous auction process, think of price as an advertising opportunity. But there is a clear distinction between price and value.

When we track the value areas with the Market Profile, we are focusing on time, as it regulates all advertised opportunities and gives us context. With the Volume Profile, we measure the activity at each advertised price so as to determine the success or failure of these advertised opportunities.