Chapter 2
What is VAH / VAL (Value Area)?
70% volume zone: range trading concept
What is VAH / VAL (Value Area)?
Value Area defines the price range where 70% of the total volume in the volume profile occurred. This range is defined by two levels:
- VAH (Value Area High): Upper boundary of the value area: volumetric resistance
- VAL (Value Area Low): Lower boundary of the value area: volumetric support
This calculation is done by expanding in both directions from the POC. Layers are added until 70% of the total volume is reached.
- VAH (Value Area High): Upper boundary of the value area: volumetric resistance
- VAL (Value Area Low): Lower boundary of the value area: volumetric support
This calculation is done by expanding in both directions from the POC. Layers are added until 70% of the total volume is reached.
Why does VAH / VAL (Value Area) matter?
The Value Area is considered the market's "fair value zone." Range trading logic applies when price is inside this zone, and trend movement logic applies when it breaks out. Algorithmic trading systems typically trade at value area boundaries.
How does VAH / VAL (Value Area) appear in the CloudCraft terminal?
PW-VAH, PW-VAL, PD-VAH, PD-VAL levels are displayed as color-coded horizontal lines on the chart. VAH is typically drawn in red/orange, VAL in green/blue tones.
How to use VAH / VAL (Value Area)?
Value Area Play: If price tests VAL and bounces = long. If price tests VAH and bounces = short. POC is the first target, the opposite VA boundary is the final target.
VA Break: If price closes above VAH, it may signal the start of an uptrend. Close below VAL = downtrend signal.
VA Break: If price closes above VAH, it may signal the start of an uptrend. Close below VAL = downtrend signal.
This content is for education and analysis only, not investment advice. Market tools offer probability and context, not certainty; the decision is the user responsibility.