Every trading day, time period and bar is different, which means that every value area will develop differently. While the definition of the value area is where 70% of the volume in a bar or time period takes place, that doesn't mean that all value areas are created equal. Sometimes the volume will occur over a small area, other times a larger area. This can be due to a number of factors, including the overall activity level in the market and the specific trading strategy being used by participants. As such, it's important to take into account the unique characteristics of each value area when making trading decisions.
Volume is a critical indicator for trading. It can provide clues about the strength of a move and the participation of market participants. Orderflows Stratum takes volume analysis a step further by looking at the distribution of volume within the Value Area. This allows traders to identify areas of strong and weak volume in the area where volume is strongest.
For example, if there is strong buying volume near the bottom of the Value Area, this could be an indication that the market is ready to move higher as it found support. Conversely, if there is weak selling volume near the top of the Value Area, this could be an indication that the market is ready to move higher as there is less resistance above, even though it is a Value Area High.
Even within the Value Area, there can be areas of strong volume trading and periods of relatively weak trading activity. Although one might think that trading volume would be evenly distributed throughout the Value Area, this is not always the case. Orderflows Stratum's innovative analysis can help traders to identify these areas of strong and weak trading activity, giving you an edge in the market.>