Module 2 · The Building Blocks
Value Area, VAH & VAL
The ~70% zone, and exactly how it's built from the POC.
In this lesson you'll
- Define the Value Area and the ~70% / 1-σ logic
- Walk the value-area construction algorithm
- Read VAH and VAL as decision boundaries
How the Value Area is built
- Sum the total volume in the profile, multiply by 70% → the target.
- Start at the POC (seed the value area with it).
- Look one row above the current VA and one row below.
- Add whichever side has the greater volume.
- Repeat until accumulated volume ≥ target. The top row included = VAH; the bottom = VAL.
VAH and VAL are decision boundaries. Inside the value area, the market is in balance and tends to rotate. Outside it, the market is exploring — it will either accept the new prices (and value migrates) or reject them and snap back into value. Module 4 covers that test.
Key takeaways
- Value Area = ~70% of volume (≈ 1 standard deviation), bounded by VAH and VAL.
- Build it outward from the POC, always adding the heavier neighbor, until 70% is reached.
- 70% is the rounded convention for 68.2% (1σ) — same concept.
- VAH/VAL are decision boundaries: inside = balance/rotation; outside = acceptance or rejection.
Check your understanding
Pick an answer to reveal instant feedback. Answer every question to complete the lesson.
Why that's off: You compare both sides and pick the heavier — not always the top.
Why that's off: The algorithm is deterministic, not random.
Why that's off: You add the heavier neighbor, not the lighter one.
You compare the row just above and just below the current VA and add whichever has more volume, repeating until ~70% of total volume is captured.
Why that's off: 50% is far narrower than ~1σ of value.
Why that's off: 100% is the entire range, not the value zone.
Why that's off: ~30% is what's excluded (the tails).
The VA is the ~70% of volume around the POC — the rounded convention for the first standard deviation (68.2%) — i.e., the core consensus zone.
Educational content only. Nothing here is financial or trading advice. Order-flow and options patterns shift probabilities; they never guarantee outcomes.