What is Value Area in Trading? POC, VAH, VAL Explained

Market Context · ~10 min read · Updated 2026

Almost every concept on the TradingPit chart traces back to one foundational idea: Value Area. It is the statistical heart of auction market theory and the lens through which professional traders read price action. If you understand Value Area, you understand why price hesitates at certain levels, why some breakouts hold and others don't, and why a "good price" depends entirely on where volume has accepted.

This guide explains Value Area from first principles: what it is, how it's calculated, what its three components — POC, VAH and VAL — represent, and the two most-cited "rules" (the 70% rule and the 80% rule) that traders use to anticipate price behaviour.

The Core Idea: Markets are Auctions

Markets do not move randomly. Every tick is the result of a buyer and a seller agreeing on a price, and the volume traded at each price represents acceptance — both sides considered that level fair, at that moment, given the information they had.

Plot the volume traded at each price as a horizontal histogram beside a price chart and a familiar shape emerges: a bell curve. Most volume clusters around a central price; very little volume occurs at the high or low extremes. This bell curve is the auction's signature.

The Value Area is simply the price range that contains 70% of the day's volume — the middle, statistically dense region of acceptance.

The Three Components: POC, VAH, VAL

POC — Point of Control

The single price with the most volume traded. POC is the auction's anchor. It is the price at which buyers and sellers most agreed, and it acts as a magnet for price both during the session and afterwards. When price returns to a prior session's POC, it tends to either pause or reverse — it has reached "fair value" again.

On TradingPit, POC is rendered as a dotted line in the daily colour token (off-white). Prior-day POC is one of the most-watched levels in any session.

VAH — Value Area High

The upper boundary of the 70% acceptance zone. Above VAH, the market did not find enough buyers to call it fair — that price was tested and rejected. When price approaches VAH from below in the next session, sellers from the prior day are still likely to be present.

VAH is rendered as a short-dashed line on TradingPit. It is one of the highest-priority intraday decision levels.

VAL — Value Area Low

The lower boundary of the 70% acceptance zone. Below VAL, sellers ran out of new buyers willing to absorb. When price approaches VAL from above, buyers from the prior day tend to step back in.

The 70% Rule

The "70%" comes from one standard deviation of a normal distribution (technically 68%, rounded for convenience). The Value Area is computed by starting at POC and expanding outward, one tick at a time toward whichever side has higher volume, until 70% of the day's total volume is captured. The two boundaries that result are VAH and VAL.

This is not arbitrary. It mirrors the statistical assumption that markets are roughly normal-distributed in their volume around fair value — and empirically, this assumption holds well over thousands of trading days.

The 80% Rule

The 80% rule is a famous tradeable observation: if price opens outside the prior day's value area, then re-enters value, there is roughly an 80% chance it traverses the entire value area to the opposite side.

The intuition is straightforward. If the market opened above VAH and rejected back inside, it has implicitly accepted that the prior day's value range is still fair. From there, momentum tends to carry through to the opposite extreme of acceptance — VAL — before stalling.

Above Value, Inside Value, Below Value

Once you have VAH, POC and VAL drawn, every current price falls into one of four zones:

• Above Value (price > VAH) — the market is exploring higher. Either a trend is in progress or sellers haven't shown up yet. Bullish bias.
• Upper Value (POC < price < VAH) — price is in the upper half of acceptance. Mildly bullish.
• Lower Value (VAL < price < POC) — lower half of acceptance. Mildly bearish.
• Below Value (price < VAL) — exploring lower. Bearish bias.

The TradingPit Market Context panel shows this in real time as the "Value" field, colour-coded green / light-green / light-red / red.

Prior Day Value vs Developing Value

Two flavours of value matter:

• Prior Day Value Area (PD VAH, PD POC, PD VAL) — yesterday's complete profile. These are reference levels that don't change during today's session. Most trade plans hinge on these.
• Developing Value Area — today's value area as it forms. These move as the day progresses, often reaching a stable shape only after the first few hours.

For decision-making, prior day value is the workhorse. Developing value is more useful late in the session for understanding where today's auction is settling.

How Value Area Differs From Traditional Support/Resistance

Pivots, swing highs, and trendlines are derived from price extremes — they mark where price was rejected. Value Area is derived from volume distribution — it marks where price was accepted.

Both have edge. Combined, they're substantially more powerful: a level that's both a prior swing low and the prior week's VAL is much higher conviction than either alone. This is exactly what TradingPit's confluence detection highlights as a gold zone on the chart.

Trading the Value Area Edges

1. VAH/VAL as fade levels. On rotational, low-ATR sessions, fade VAH (sell) and VAL (buy) with POC as target. The expected move is a return to the centre of acceptance.
2. VAH/VAL as breakout levels. On trending sessions with strong open type, a clean break of VAH or VAL is a continuation entry. The next target is one full value-area width above/below.
3. POC as a magnet. When price drifts mid-session with no clear direction, it will often gravitate back to POC. Useful as a target, less useful as an entry.