Trading Value 1 Buyers In Control, Sellers Step Away Sellers In Control, Buyers Step Away Price Time...

Trading Value

1

Buyers In Control, Sellers Step Away

Sellers In Control,Buyers Step Away

Price

Time

Buyers In Control

Sellers In ControlFairest Price to Do Business

Value Area Low

Value Area High

Point of Control

Discovery (Auction) Zone

Discovery (Auction) Zone

“Do I hear 50…45…40…35…”

“Do I hear 60…65…70…75…”

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Value Areas – The Gravity Theory

Imagine price, not as a tick on a candle chart, but as a ball affected by gravity….

Price

Time


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The Gravitational Fields…


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Value Area Low Value Area HighPoint Of Control

The Gravitational Fields… Value Area and Targets…

Short Targets Long Targets


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Inside value, price will move towards the POC….


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Outside value, price will move away from the VA….


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Outside value, near the furthest targets, price will retreat to value….


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At the VAL or VAH, price could go either direction….


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When sellers are in control outside of Value Area….


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When buyers are in control outside of value area….


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When sellers are in control inside of Value Area….


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When buyers are in control inside of value area….


When price opens below value we expect sellers to remain in control and short at VAL.When price opens above value we expect buyers to remain in control and buy at VAH.

The targets provided by the MarketWebs act as mountains, price will likely find pause there.

We close our positions at further targets where the mountains get highest and provide most pause and possible reversal.

When price opens inside of value we expect the mountains of value extremes to remain in control and buy/short towards the POC, closing our positions at the POC as price may get stuck.

These concepts work for the value area on all time frames.

If I’m looking at the yearly value area, I have to look at longer dates.If I’m looking at the monthly value area, I have to look at closer dates.If I’m looking at the weekly value area, I have to look at nearer dates.If I’m looking at the daily value area, I have to look at the action today.

Value Areas – The plays

Some things to note:The peaks and valleys illustrated in the gravity theory get amplified over time.

A new timeframe (with a new value area) is still young, buyers and sellers have not established their influence on the gravity yet.

In the middle of the time frame the gravity tilt is established and can change but it takes more energy. During this time, we look at the profile for guidance, is the bell curve complete?

At the end of the time frame we look again at the profile, where is value likely to be in the next time frame?

Young

Old

Value Areas – The Plays

Set-Ups:

When starting a new time frame above value:The more time is spent above value, the more solid support the value area will be. I want to get long as close to the top of value as possible.

When starting a new time frame inside value:The more time is spent inside value, the more solid support/resistance the extremes of the value area will be.I want to get short as close to the top of value as possible, and long as close to the bottom of value as possible – always targeting the POC.

When starting a new time frame below value:The more time is spent below value, the more solid resistance the value area will be.I want to get short as close to the bottom of value as possible.


Set-Ups: The Break

When starting a new time frame inside value:The more time is spent inside value, the more solid support/resistance the extremes of the value area will be.

If we break above value and spend some time outside, I want to go long as close to the top of value as possible (there should be ONE return) and use the outside targets.

If we break below value and spend some time outside, I want to go short as close to the bottom of value as possible (there should be ONE return) and use outside targets.


Set-Ups: The 80% Rule (Works 80% of the time)

When starting a new time frame above value:The more time is spent above value, the more solid support the value area will be. If we then break into the value area and spend some time inside, I want to short as close to thetop of value as possible (there should be ONE return) and target the bottom of the value area.

Once this play has played out, I can reverse position (go long) at the bottom of value area and target the POC.

When starting a new time frame below value:The more time is spent below value, the more solid resistance the value area will be.If we then break into the value area and spend some time inside, I want to go long as close to the bottom of value as possible (there should be ONE return) and target the top of the value area.

Once this play has played out, I can reverse position (go short) at the top of value area and target the POC.

Trading Value 1 Buyers In Control, Sellers Step Away Sellers In Control, Buyers Step Away Price Time...

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