jxyzobrien Monday, 04/17/17 10:05:44 PM Re: d-k post# 38625 Post # of 45692 market profile part 2 value area and structure Value area ---------- Is where 70% of the previous days volume occurred. VPOC is in the value area typically in the middle and contains the point where the most volume occurred. When the value area is entered from below the market attempts to rally to the top of value area high. Market magnets are va high and low, vpoc and thick/thin areas of volume. When the value area high fails an attempt to go to value area low is attempted. When the market enters an area of congestion (lots of trades there) the market slows down like an expressway traffic jam. Market structure ---------------- Most of the time the market is in balance- market goes sideways building energy to create excess and finish the auction (up or down). Excess end is created by an exhaustion gap or creating a new high during RTH with thin profile (often looks like candle with a tail or wick). Single lettered. In an up market the balance is used to repair weak highs and lows to resume the rally. In a down market rest and sell further. When the market leaves the value area after balance its then ready to become energetic and rally or sell. Unless breadth and volume are strong pullbacks overlap each other not going straight down as most expect. Profile often protects the trader from getting too short too early and relying solely on price which is often different from real value. In tight markets the value area is extremely reliable and often trades on it. In general in an up market if the market goes up and down in the value area it is building energy to break out of it. Up markets kind of chop up and rally and down markets tend to fall much faster. still look at spy volume and candle analysis to confirm.