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Lessons › Module 3: Value › Lesson 3.5

Lesson 3.5 · about 5 minutes

Acceptance vs. Rejection

ObjectiveAfter this lesson you can use time beyond a prior value edge to describe a move as acceptance or rejection.

Concept

When price moves beyond a reference such as yesterday's VAH or VAL, the market either accepts the new prices or rejects them. Time is the evidence. This course uses a rule of thumb: if price stays beyond the level for two or more consecutive 30-minute periods and TPOs build there, treat it as acceptance. If price comes back within the same period or the next one, leaving only a letter or two, treat it as rejection. These are conventions, not laws. An accepted move can still fail later, and a rejected level can be tested again.

Today's TPO profile from 98 to 108 with yesterday's Value Area 100-105 as a dashed box. Only period B trades below the box, at 98-99; periods E to I build letters above it at 106-108, with today's POC at 106. A B C A B C D A C D A D E B B B C D E F H E F G H I E F G H I F G 108 107 106 105 104 103 102 101 100 99 98 prior VAH 105 prior VAL 100 POC 106 B only: rejection E-I: 5 periods above, acceptance XYZ (hypothetical): rejection below prior value, acceptance above Hypothetical data · dashed box = prior day's Value Area
XYZ (hypothetical): rejection below prior value, acceptance above. Hypothetical, synthetic data generated from code. Today's TPO profile from 98 to 108 with yesterday's Value Area 100-105 as a dashed box. Only period B trades below the box, at 98-99; periods E to I build letters above it at 106-108, with today's POC at 106.

Worked example

Yesterday's hypothetical XYZ Value Area was 100–105. Today A trades 101–104, inside it. In B, price drops to 98, 2 points below the prior VAL of 100, but C is already back at 100–103. Only B traded below 100: 2 TPOs in one period, a rejection. Later, E trades 104–107, above the prior VAH of 105, and F, G, H and I all trade above 105 too: five consecutive periods and 12 TPOs above the level. Today's POC forms at 106 (tied with 107 at 5 TPOs; the tie rule picks 106), above yesterday's value: acceptance of higher prices.

Key takeaway

Time decides: two or more periods building beyond a level suggests acceptance; a quick return suggests rejection.

Check yourself

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

Question 1 of 3

Under this course's rule of thumb, which observation counts as acceptance above yesterday's VAH?

Question 2 of 3

In the XYZ example, why is the move below 100 classed as rejection?

Question 3 of 3

Price has been accepted above yesterday's VAH. Which statement is 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.