TradersLibrary2 - anatomy of a volume profile trader

Time Value
If you willingly spend time with someone, there is a chance that they add value
to your life. The markets work the same, as traders trade within a certain level
for an extended period it is because it represents fair value of the current market
conditions. If traders bring the price down too far and buyers come in for a
bargain, this is called an unfair value area low. If on the other hand traders bring
price up too high and cause sellers to step in, this area would be known as the
unfair value area high. The point at which the most amount of trading takes
place holds the control of the market, causing price to return to it when going to
unfair levels. This high value area acts as a general magnet for price and most of
the trading is done at this level. In biology we know all organisms seek
equilibrium, in the markets we consider equilibrium to be the Point of Control
(POC).
Equilibrium can be defined as: “The condition in which all acting influences are
balanced or canceled by equal opposing forces, resulting in a stable system.”1
The influences of buyers and sellers are essentially equal, causing price to trade
within the point of control. However, traders can move price outside of a value
area into unfair value areas, when price spends a substantial amount of time in
these unfair value areas it begins to build new value and begins to trend in that
direction, seeking new unfair highs and unfair lows. This process of
development and distribution repeats itself on every time-frame.
Generally speaking, if price spends 2 TPO's (Time Price Opportunity) or 60
minutes outside of the value area we would consider price to be finding new
value. This work is based on Peter J. Steidlemayers Market Profile Handbook.
However, in my experience I have found this 2 TPO count to be somewhat
arbitrary in a 24-hour market. I prefer to look at this 2 TPO print as an alert to
bring my attention to the volume traded in those areas outside the value area. Look to see if volume
is building as price is staying outside of that value area. If its is then there is a