The lower boundary of the price range containing roughly seventy percent of a session's activity.
The mirror of value-area-high. It marks the bottom of the range where the market spent most of its time and is watched as the lower edge of accepted value.
A common intraday framework is the rule that if price opens outside the previous day's value area and then re-enters it, there is a reasonable tendency to rotate across to the opposite edge. That gives a defined target and a defined invalidation-level, which is more than most chart tools offer.
As always, tendencies are not certainties, and the rule fails plainly on trend days. The value area describes yesterday's agreement; nothing obliges today's participants to honour it.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Expectancy: the average trade. Forty trades sorted by outcome: 24 small losses and 16 larger wins. Weighting each side by how often it happens gives the average result per trade, marked here by the dashed line at +$120.Volume profile, point of control and value area. Turn the chart on its side and count how much traded at each price instead of at each moment. The longest bar is the point of control, and the shaded band around it is the value area where most of the session's business was done.
Educational only, not advice. Spotted an error? Post in Site Feedback.