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Lessons › Module 3: Value › Lesson 3.2

Lesson 3.2 · about 5 minutes

What Is the Value Area?

ObjectiveAfter this lesson you can find the Value Area on a TPO profile and explain what it tells you.

Concept

Every letter on a TPO profile is a 30-minute record that price traded there. The Point of Control (POC) is the price with the most letters, where the market spent the most time. The Value Area (VA) is the range around the POC that holds about 70% of all the session's TPOs. Its top edge is the Value Area High (VAH) and its bottom edge is the Value Area Low (VAL). Think of it as the price zone most participants accepted as fair that session. Prices outside value were visited only briefly, so the market treated them as too high or too low. The VA describes the past. It does not predict the next session.

TPO profile from 101 to 112 with the Value Area 104-108 shaded, the POC line at 106 (13 letters) and a red Initial Balance bar from 101 to 108. Row 111 holds only D. A B A B J A B F G J A B C E F G I J K A B C D E F G H I J K L M A B C D E F G H I K L M A C D E G H K L B C D E H C D E D D 112 111 110 109 108 107 106 105 104 103 102 101 VAH 108 · IB high 108 VAL 104 POC 106 IB low 101 XYZ (hypothetical): Point of Control and Value Area Hypothetical data. VA 104-108 = 47/62 TPOs (shaded) red = Initial Balance (A+B)
XYZ (hypothetical): Point of Control and Value Area. Hypothetical, synthetic data generated from code. TPO profile from 101 to 112 with the Value Area 104-108 shaded, the POC line at 106 (13 letters) and a red Initial Balance bar from 101 to 108. Row 111 holds only D.

Worked example

Hypothetical XYZ, 13 periods (A to M), 1-point rows. The profile has 62 TPOs, and 70% of 62 is 43.4. Start at the POC, 106, with 13 TPOs. Compare the two rows above (107 + 108 = 12 + 8 = 20 TPOs) with the two rows below (105 + 104 = 9 + 5 = 14). Add the larger pair: 13 + 20 = 33. Next compare 109 + 110 (4 + 3 = 7) with 105 + 104 (14). Add the lower pair: 33 + 14 = 47, which is at least 43.4, so stop. The Value Area is 104–108 (47 of 62 TPOs, about 76%) and the POC is 106. The Initial Balance (A+B) spans 101–108.

Key takeaway

POC = most time. Value Area = where about 70% of the time was spent: the session's 'fair' zone.

Check yourself

Pick an answer to see instantly why it is right or wrong.

Question 1 of 3

About what share of a session's TPOs does the Value Area contain?

Question 2 of 3

In the XYZ profile, the row at 111 contains only the letter D. What does that tell you?

Question 3 of 3

The next morning XYZ opens at 110. Relative to the prior session's value, which description is most accurate?

Not financial advice. Educational content only, not financial advice. All tickers and prices are hypothetical, synthetic data. Market Profile is an organizing tool, not a trading system or a prediction. Trading involves substantial risk of loss.