This value has nothing to do with valuation. It denotes prices that are “fair”. Fair in this sense means a price that is common to a lot of participants. An item that you buy once per week in a store at a price that doesn’t fluctuate has a “fair price”.
You can express this by a formula
Value = Price + Time
or
Value = Price + Volume
Either of the above are valid ways of expressing value. In the first equation, value is defined by price staying the same for a long period of time. In the futures market, this would be an area that is revisted a lot during a particular session or multiple sessions. The point of controlAlso called “POC” for short. The level in the futures inside the value area where either the greatest amount of volume traded in the prior session, or the greatest amount of time was spent as measured by the number of TPO’s going across. Measured this way, the POC would be the widest part of any given market profile. While ShadowTrader calculates its value areas and points of control using volume exclusively, we are always very aware of where the TPO POC is and it’s relation to current prices or patterns in the profile. Both are very important. is the price level where the most amount of time was spent during an RTHRegular Trading Hours. In the /ES this means the price action from 9:30am EST to 4:15pm EST only. session. James Dalton refers to this level as “the fairest price to do business”.
Using volume as an imput into the value equation is also valid but moreso if the volume is committed over a period of time. One big block at once is not the same as thousands of contracts being printed at a certain price due to that price being in play multiple times in a session.
