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Definition of 'Value Area Low (VAL)' The VAL is the Value Area Low. This is a Market Profile concept. The VAL is the lowest price in the Value Area and is often used and seen as an area of support or resistance by traders. Traders will frequently use this area (with other methods and indicators) to enter and exit trades due to the support/resistance nature of this area. Together with the VAH, the VAL bounds 68% of market activity around the POC. The Value Area Low is also sometimes know as the Lower Value Area.

Definition of 'Gap' A gap is a break on a price chart where no trading happened. This indicates a sharp move up or down if it happens while the market is open. If this happens overnight when the market is closed then it is the result of other market price changes that influence this market. The most common definition for a gap is the area between the close of one price bar (or candlestick) and the open of the subsequent one. However, some traders refer to gaps as the area between the previous session's high or low and the subsequent session's open price. On this site we use the term extreme gap for this type of gap. Gap in EURCHF seen reach 70 pips In the stock market gaps will happen when an unexpected earnings announcement is made after the market closes. The opening price will reflect the new (unexpected) information and cause the stock to gap-up or gap-down. Even though some markets trade almost continuously (such as the E-mini S&P500 shown in the ch...

Definition of 'Naked Point of Control (NPOC)' Naked POC is a Market Profile term. POC - Point of Control - is the price at which most trade occurred in a given trading session. A Naked POC is is a POC from a previous day that price has not returned to on any of the following days. Sooner or later NPOCs are tested much like "Gaps" are sooner or later filled. NPOCs act very much like magnets drawing price to them. That is why most days the POC of the previous day is visited. A Naked Point of Control is the same as a Virgin Point of Control (VPOC).

Definition of 'Virgin Point of Control (VPOC)' The Virgin Point of Control (VPOC) is a Point of Control (POC) that has not had a trade at that price since the day that that POC was formed. Say a POC is formed at a price of 1120.00 on Monday. On Tuesday the market trades above this price all day and forms a POC at 1145.00. On Wednesday the market trades above 1145.00 all day and forms a POC at 1165.00. On Thursday the market trades in the 1150.00 to 1170.00 range. So the situation on Thursday is that the POC's that were formed on Monday and Tuesday are VPOC's because their prices have not been touched since they were formed. However, the POC created on Wednesday is NOT a VPOC because the market has traded at that price since it was formed. The Virgin Point of Control is sometimes referred to as the Naked Point of Control (NPOC).

Definition of 'Time Price Opportunity TPO' A TPO is a Time Price Opportunity. This is marked as a single letter in a Market Profile. Instead of using bars or candles with an Open, High, Low, and Close price, each "bar" in a Market Profile is represented by putting a letter against the price that the market traded at during that time interval - usually 30 minutes per interval or "bracket" as it is called in Market Profile terminology. Each of these letters is know as a Time Price Opportunity or TPO for short.

Definition of 'Point of Control POC' The POC is the Point of Control. This is a Market Profile concept. It is the price at which most TPO's occur in the Market Profile. In our illustration the POC is at 1283.00 which is the most number of TPO's. 1285.00 M 1284.75 HM 1284.50 DEGHM 1284.25 DEGHM 1284.00 DEGHM 1283.75 DEFGHIMN 1283.50 DEFGHIMN 1283.25 DEFGHIMN 1283.00 DEFGHIJKMN 1282.75 DFGHIJKMN 1282.50 DFGJKLMN 1282.25 DJKLMN 1282.00 DJKLMN 1281.75 DJKLMN 1281.50 DLMN 1281.25 DLMN 1281.00 LMN 1280.75 LMN 1280.50 MN See also Virgin Point of Control (VPOC).

Definition of 'Resistance Level R4' R4 is the fourth resistance level. It is the highest level of 9 points that are calculated as part of the Pivot Points calculations that traders use to determine where the market might reverse direction. The resistance levels, support levels and pivot point are arranged as follows from highest to lowest. (In some cases the Pivot Point may not be in between the R1 and S1 level. This will happen when the support and resistance levels are not based off the pivot point.) Resistance Level R4 Resistance Level R3 Resistance Level R2 Resistance Level R1 Pivot Point PP Support Level S1 Support Level S2 Support Level S3

Definition of 'Resistance Level R3' R3 is the third resistance level. It is in the plus side of 9 points that are calculated as part of the Pivot Points calculations that traders use to determine where the market might reverse direction. The resistance levels, support levels and pivot point are arranged as follows from highest to lowest. (In some cases the Pivot Point may not be in between the R1 and S1 level. This will happen when the support and resistance levels are not based off the pivot point). Resistance Level R4 Resistance Level R3 Resistance Level R2 Resistance Level R1 Pivot Point PP Support Level S1 Support Level S2 Support Level S3 Support Level S4

Definition of 'Resistance Level R2' R2 is the second resistance level. It is in the plus side of 9 points that are calculated as part of the Pivot Points calculations that traders use to determine where the market might reverse direction. The resistance levels, support levels and pivot point are arranged as follows from highest to lowest. (In some cases the Pivot Point may not be in between the R1 and S1 level. This will happen when the support and resistance levels are not based off the pivot point.) Resistance Level R4 Resistance Level R3 Resistance Level R2 Resistance Level R1 Pivot Point PP Support Level S1 Support Level S2 Support Level S3 Support Level S4

Definition of 'Resistance Level R1' R1 is the first resistance level. It usually falls above the pivot point and below R2 but there are circumstances (see below) when the pivot point can be above R1. R1 is calculated as part of the Pivot Points calculations that traders use to determine where the market might reverse direction. The resistance levels, support levels and pivot point are arranged as follows from highest to lowest. (In some cases the Pivot Point may not be in between the R1 and S1 level. This will happen when the support and resistance levels are not based off the pivot point.) Resistance Level R4 Resistance Level R3 Resistance Level R2 Resistance Level R1 Pivot Point PP Support Level S1 Support Level S2 Support Level S3 Support Level S4

Definition of 'Pivot Point (PP)' PP is an acronym for the Pivot Point which is also known as the center pivot. This is the center pivot that traders calculate for market trading. Above this are 4 resistance points and below are 4 support levels. For more details see Pivot Points.

Definition of 'Pivot Points' Pivot Points are also know as floor pivots. These are the places where traders expect support and resistance to occur in the market and as such are used as entry and exit points for trades. Depending on the type of pivot formula used you can generally generate and use up to 9 levels. These levels are marked and calculated by starting with a center pivot called a Pivot Point and labeled as PP. From that point, moving up, the resistance levels are numbered sequentially as R1, R2, R3, R4 with R4 being the highest value. The support levels are numbered in the same way S1, S2, S3, S4 with S4 being the lowest support value. There are a number of ways to calculate pivots points. Here are some of the more popular methods: Classic Pivot Points, Camarilla Pivot Points, DeMark Pivot Points, Woodie Pivot Points.

Definition of 'Short' A Short position is when a trader or investor sells a position in the market. These positions make money when the market moves down and lose money when the market moves up. Compare to the opposite strategy which is Long. If a trader "goes short" then it means that he/she has sold a position in the market.

Definition of 'Target' The Target is the price at which a trader wants to exit a position. This price does not necessarily translate into a profit for the trader. This will happen if the position is currently negative and the trader is trying to exit at a more favorable price but not at a profit. Targets are often entered into a trading system and by implication into the exchange's computers by using a limit order. Limit Orders are placed in a queue and are executed on a first come first served basis. For this reason, the earlier that a Target is placed, the further forward in the queue it will be and the more likely that it will be executed if the market trades at that price.

Definition of 'Long' A Long position is when a trader or investor buys a position in the market. These positions benefit when the market moves up and lose money when the market moves down. Compare to a Short position which is the opposite. If a trader "goes long" then it means that he/she has bought a position in the market.

Definition of 'Support and Resistance S/R' Support is either a price or a price area at which the market struggles to trade below. Because the market cannot move below this level it is referred to as Support. Traders look for areas of support in the market to place Buy orders to go Long. They also use the Support area to place a Target for a Short position. Resistance is either a price or a price area at which the market struggles to trade above. Because the market cannot move above this level it is referred to as Resistance. Traders look for areas of Resistance in the market to place Sell orders to go Short. They also use the Resistance area to place a Target for Long positions. Pivot Points (also called Floor Pivots) are classic calculations used to determine areas of support and resistance during the trading day. These areas are usually calculated based off the High, Low and Closing prices of the previous trading session.

The Definition of "Market Profile ( MP )" MP is  A Market Profile is the arrangement and presentation of market action as a vertically aligned bell curve. A frequently asked question in our forum is: Where can I learn more about Market Profile? The most common answer is to read Jim Dalton's book Mind Over Markets. Jim Dalton also wrote a sequel to Mind Over Markets called Markets in Profile.  Here is an example of a market profile: 1285.00 M 1284.75 HM 1284.50 DEGHM 1284.25 DEGHM 1284.00 DEGHM 1283.75 DEFGHIMN 1283.50 DEFGHIMN 1283.25 DEFGHIMN 1283.00 DEFGHIJKMN 1282.75 DFGHIJKMN 1282.50 DFGJKLMN 1282.25 DJKLMN 1282.00 DJKLMN 1281.75 DJKLMN 1281.50 DLMN 1281.25 DLMN 1281.00 LMN 1280.75 LMN 1280.50 MN Each series of letters represent a 30 minute time bracket and placing that letter against the price indicates that the market traded at that price during that time bracket. Compare this against a Volume Profile.

The Definition of  'Value Area High (VAH)' VAH is the Value Area High. Which is a Market Profile concept. The VAH is the highest price in the Value Area and is often used and seen as an area of support or resistance by traders. Traders will frequently use this area (with other methods and indicators) to enter and exit trades due to the support/resistance nature of this area. Together with the VAL, the VAH bounds 68% of market activity around the POC. The Value Area High is also sometimes know as the Upper Value Area. This value can be calculated using the Market Profile Calculator. For display this value in your MT4, please contact us. So you can see the VAH in your own MT4.