The Value Area is a range of prices where the majority of trading took place on the prior trading day. In specific, this area is the range where 70% of the prior day’s happened. The value area is approximately one standard deviation above and below the average highest price. With this knowledge, there are specific probabilities of market behavior we can understand to digest the value area. The value area gives us an idea of where the smart money is playing ball and where the institutions are guiding the market. From this data, we can derive intra-day strategies that capitalize on market behavior.
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