Market Profile - Value Area

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 One STD away from the most traded price which is the price which has the highest number of TPO's.

This price is also known as the Point of Control (POC). 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 aligned bell curve is created.

The middle chunk of that chart is the Value Area.

Typically, the upper and lower prices of the Value Area, known as Value Area High (VAH) and Value Area Low (VAL) are very important zones. In the next lessons, we will take a look more closely on the price action.

Marker Profile : TPO

The basic auction building block recorded by the Profile is the TPO, or “time-price opportunity.”  The three components of the TPO are:

1. Price - advertises opportunity; there’s a clear distinction between price and value.
2. Time - regulates all advertised opportunities.
3. Volume - measures the success or failure of these advertised opportunities.

Time-price-opportunity (TPO) profiles are histograms of how much time was spent at each price within the span of the profile rather than volume-at-price. Generally, TPO profiles are less precise than volume profiles over shorter terms like a session.

TPO profiles, because of their simplicity, are especially good at revealing specific kinds of patterns, such as:

• - Weak and poor highs or lows.
• - Single prints. 

We will go in-depth with these definitions in the nexts lessons. 

Market Profile: The Structure

The Profile’s unique construction produces a display that contains structure.  It reveals more information than the usual candlestick or bar charts, which do not expose all the informations of the market like:
1- where the majority of business took place 
2- what price levels attracts market participants
3- for how long they do their business

The structure depicted by the Market Profile reflects market-generated information; it represents the actual buy and sell orders transacted in the marketplace.  
This allows us to interpret which time frames are participating and provides insight into inventory conditions, completion, emotional trading, and other vital cues that are not apparent in conventional charting methods and price-derived indicator analysis.

Market Profile. What is that?

Market Profile is a charting tool that enables traders to observe the forces that drive the auction process and all market movements. With this tool, it's possible to see the flow of price over time — in a way that reveals patterns in herd behaviour. 
Basically,  is simply a constantly developing graphic that records and organizes auction data.
The Market Profile offers a charting approach that is markedly different than bar or candlestick charts, which have been used historically to graph market activity.