The value area is the band of prices where the bulk of trading happened — by convention, about 70 percent of the volume in the profile, centred on the POC. Its upper edge is the value area high (VAH) and its lower edge the value area low (VAL).
Inside the value area, price was accepted as fair. Outside it, price was comparatively rejected — the market spent little time there. That makes VAH and VAL natural boundaries between value and extreme.
Trading the edges
In a balanced market, price often rotates within the value area: a push to the VAH that fails can rotate back toward the POC or VAL, and vice versa. Fading the edges back toward the middle is a classic range approach, with a stop just outside the value area.
The edges also matter for breakouts. Price that leaves the value area and accepts beyond it — trading and holding there rather than snapping back — signals the market is seeking new value, and traders may follow that direction instead of fading it.
- Value area = roughly 70% of volume around the POC.
- VAH and VAL mark the transition from fair value to extreme.
- In balance, price tends to rotate between the edges and the POC.
- Acceptance beyond an edge hints the market is moving to new value.
The value area frames where price was fair; its high and low are the lines between rotation inside value and a move to find new value.