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What is The Value Area?
The Value Area is a measure of where heavy trading volume takes place and is used in trading to determine potential areas of support and resistance. Trying to find clues to market sentiment in historical price charts? Look no further than the previous day's trade. The trading range from the last session can offer up a key area for traders to observe - the Value Area. Find that range of prices and find the key to the potential for the following session. 70% of the day's price action is conducted inside the Value Area. The Value Area is dynamic and will change throughout the day.
Why use The Value Area?
The Value Area is an outstanding measure of market direction and trend. As the saying goes 'the trend is your friend' meaning one trades with the trend, and not against it. The trend is of great importance to traders. Therefore, having a tool to help correctly identify direction in the market is accommodating in regards to identifying and placing higher probability trades and potential turning points in markets to find ideal stop placement. From the basic building block of the Value Area, it is possible to open up a new way of looking at the day's trade and find no less than five clear market signals based on this key range that can hint at the potential overall bias for the day's trade.
The Value Area and Trading Advantage®
Trading Advantage® focuses on helping students learn to use the Value Area to gauge market direction. The Value Area was part of Larry Levin's trading arsenal that he used to make $1,900,336.82 as he described in his award winning book. The Value Area is such an integral tool in the Trading Advantage® arsenal that the Value Area Unveiled Membership Club was created to provide students direct access to this tool.
*Past Performance is not necessarily indicative of future results.
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