What Is Value Area?
The Value Area is the price range that contains 70% of the total traded volume in a Volume Profile period. Its upper boundary is the Value Area High (VAH) and lower boundary is the Value Area Low (VAL). Together with the Point of Control, these three levels define where the market considers fair value.
How Value Area Works
The Value Area concept comes from market profile theory: prices spend 70% of their time within one standard deviation of the mean (the value area). Trading above the VAH means buyers are willing to accept higher prices — expansion of value upward. Trading below the VAL means sellers are forcing lower prices — expansion of value downward.
Why It Matters for Traders
The VAH and VAL are critical intraday and swing trading levels. Price opening above the prior day's VAH suggests bullish control; below VAL suggests bearish. The "80% rule" states that when price enters the value area from outside and spends two 30-minute bars inside, there's an 80% probability it will traverse to the other side. These probability-based frameworks from volume analysis provide structured, high-probability trading approaches.