Value Area
The price range in a Market Profile where about 70% of total trading gathered — seen as the price zone the market accepted as fair that day.
Value Area = the price range containing roughly 70% of all TPOs, centered on the POC (the price where trading spent the most time)
When price is above the value area (above the VAH), it's seen as trading on the higher side of the day's usual; below it (below the VAL), on the lower side.
In plain terms
In the bell-shaped distribution built by stacking TPOs, the middle 70% band — where trading is packed most densely, with the short tails at the top and bottom trimmed off — is the value area. Think of it as a band saying "today's trading mostly took place inside this price range."
The upper end of this band is called the VAH, and the lower end the VAL. It's easiest to think of it as the ordinary range where price stayed that day.
What it tells you
The value area shows the price zone that most market participants accepted as reasonable that day. When price is inside this band, it's read as the usual range; when it moves outside, as movement different from usual.
Traders watch whether price leaves the value area and then comes back inside, or stays outside and forms a new range, and use that to gauge the flow.
Formula
Value Area = the price range containing roughly 70% of all TPOs, centered on the POC (the price where trading spent the most time) The upper edge is called the VAH (Value Area High), and the lower edge the VAL (Value Area Low)
What high or low means
When price is above the value area (above the VAH), it's seen as trading on the higher side of the day's usual; below it (below the VAL), on the lower side.
When the value area stacks steadily upward day after day, it's sometimes read as the price zone itself moving up; when it moves down, as moving down. Still, it's nothing more than a distribution of trading.
Because the name says "value," it sounds like a company's fair value, but it's something entirely different. It refers only to the price range where trading clustered that day, unrelated to accounting or earnings, so it's a different thing from the value discussed in margin of safety or DCF.
The 70% threshold is a figure set by convention. The range can differ slightly depending on the analysis tool and its settings.
Stocklore does not display the value area on charts. It's a specialist tool for short-term trading, so we only include an explanation of the term for when you hear it on market broadcasts or trading platforms and look it up.
Metrics to read alongside
See it in real stocks
Search US stocks on Stocklore to see SEC-filing-based financial metrics alongside the sector benchmark.
This explanation is for information and reference only and is not a recommendation to buy or sell any security. Investment decisions and their consequences are your own.