The following chart shows the perfect example of “The 80% Rule” trade set up. When the market opens (or gets) above or below the Value Area, and then gets in the Value Area for two consecutive half hour periods. The market then has an 80% chance of filling the Value Area. The Value Area (and the 80% rule) can be an excellent tool for judging market direction. Many traders familiar with the Value Area and the techniques that go along with it use it to help them decide what trades to do each day. You will find that using the Value Area each day will be valuable in your trading.
The long term ‘merged’ profile which I posted some time ago identified a strong Point of Control. A price level in which very much trading activity took place. That price level will be important to keep an eye on from a Market Profile point of view. Please scroll down in this blog to see the post from feb 26 where I merged 24 hr Market Profiles from 2/14 thru 2/25. That was posted pre market open on that morning. Shortly after that post at about 10:00 AM EST price tested that merged POC level as predicted. That level was also the previous days Value Area High (Vah). Price touched 1096.25 for a brief moment and has not looked back since. I will be watching that 1096 / 97 level again when price heads back that way.
I have been studying Market Profile analysis. This stuff is absolutely amazing. This may be the missing link in my trading.
