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  |  SEP 1987

Estimating the Market Profile Value Area for intraday trading by Donald L. Jones

Estimating the Market Profile Value Area for intraday trading by Donald L. Jones T he prime question for every trader is whether to get into a market, or if in, whether to stay in or get out. Since these questions must be decided on the basis of inadequate knowledge (no, we really do not know where the market is going), a key element in the trading decision is the state of the market. Is it facilitating trade with its breadth (price range) and depth (volume), or is it showing signs of change? A principal tool in measuring the extent to which a market is facilitating trade is Value Area, a feature of the Market Profile/Liquidity Data Bank generated by the Chicago Board of Trade. This information used to be obtainable only on the floor of the exchange, but now is available from a Chicago data service and several quote services that carry the Market Profile.

by Donald L. Jones

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