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Lessons › Module 3: Value › Lesson 3.3

Lesson 3.3 · about 5 minutes

VAH & VAL as Reference Levels

ObjectiveAfter this lesson you can use the prior session's VAH and VAL as reference levels to describe today's activity.

Concept

Yesterday's VAH and VAL mark the edges of the prices the market accepted. Profile readers carry them into the next session as reference levels: prices to measure today's activity against. Each time price reaches one, ask two questions. How far beyond the edge did it go? How long did it stay there? A brief poke beyond the VAH that comes straight back means the market did not accept those prices this time. A reference is not a wall, and price can move through it at any time. It is a yardstick that turns 'price went up' into 'price tested yesterday's VAH and came back'.

Today's TPO profile from 99 to 108 with yesterday's Value Area 100-106 drawn as a dashed box. Only period C trades above the box (107-108) and only period G below it (99). A F G H I A B E F H I A B D E F I A B C D E B C D C C F G H I G G H 108 107 106 105 104 103 102 101 100 99 prior VAH 106 prior VAL 100 C: 2 pts above prior VAH, one period G: 1 pt below prior VAL, one period XYZ (hypothetical): testing yesterday's VAH and VAL Hypothetical data · dashed box = prior day's Value Area
XYZ (hypothetical): testing yesterday's VAH and VAL. Hypothetical, synthetic data generated from code. Today's TPO profile from 99 to 108 with yesterday's Value Area 100-106 drawn as a dashed box. Only period C trades above the box (107-108) and only period G below it (99).

Worked example

Yesterday's hypothetical XYZ Value Area was 100–106. Today opens inside it: A trades 102–105 and B trades 103–106, up to the prior VAH. In C, price trades 105–108, 2 points above the prior VAH of 106, but D is back at 104–106. Only C traded above 106: 2 TPOs in one period. Later, G dips to 99, 1 point below the prior VAL of 100, and H is back at 100–103. Only G traded below 100: 1 TPO. Both edges were tested, each probe lasted one period, and 31 of today's 34 TPOs stayed inside yesterday's value.

Key takeaway

Yesterday's VAH and VAL are yardsticks: note how far price goes beyond them and how long it stays.

Check yourself

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

Question 1 of 3

How do profile readers use the prior session's VAH and VAL?

Question 2 of 3

In the XYZ example, how many TPOs printed above the prior VAH of 106?

Question 3 of 3

Price trades for one period above yesterday's VAH, then returns inside yesterday's value. What is the most accurate description?

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.