Value Area Low (VAL)

What VAL means

The value area is the range around the point of control that contains a chosen share of activity, conventionally about 70 percent. The lower boundary of that range is the value area low, or VAL. It is the lowest price at which the market did a large share of its business during the period.

Think of the value area as a neighborhood. The POC is its center, VAH is the northern edge, and VAL is the southern edge. When price is below VAL, it has left the neighborhood to the downside.

How VAL is calculated

The calculation is the same as for VAH. Starting at the POC, the software adds rows above and below until it holds the target share of activity. The lowest price included becomes the VAL. Because platforms differ on whether they weight by time or volume and on row size, VAL can differ slightly between tools.

A short, clean way to remember it: value is wherever most of the trading happened, and VAL is where that zone stops at the bottom.

How traders use VAL

The prior session VAL is a standard reference. An open below it is described as opening out of value to the downside, while an open inside the prior value area is described as opening within value. Which situation a market starts in shapes how a trader frames the session, though it does not decide the outcome.

The 80 percent rule works from the other side too: a market that opens below the prior value area, moves back inside and accepts there is said to often rotate toward VAH. Like all heuristics, it is a tendency some traders have noticed, and it fails often enough that traders treat it as context rather than a signal.

Another common use is as a line to judge acceptance. If price falls below VAL and spends time there, it suggests the market is accepting lower prices. If it dips below and quickly returns, it suggests rejection of those prices.

Reading the open relative to VAL

Mirror the logic of the upper edge. An open below the prior VAL is out of value to the downside. An open between VAL and the POC is inside the lower half of value. The more informative observation is again the behavior: does price build time below VAL, or does it return inside within a short period?

If the market returns inside and then holds above VAL for a sustained stretch, some traders consider the 80 percent rule in play and watch the POC and VAH as possible destinations. If it keeps building below VAL, they consider value to be migrating lower. Both readings remain hypotheses until the market confirms them.

How VAL differs from the prior low

The prior low is the lowest print of the session. VAL is the lower edge of the zone with most activity and is normally higher than the low. A day with a long lower tail has a prior low well below VAL, because the market probed a low price briefly and left. That tail is itself information, since it shows rejection of lower prices, while VAL shows where accepted value began.

Worked example

Common mistakes

• Treating VAL as support by default, when it is only the edge of past accepted value.
• Ignoring the market context, such as a major scheduled release, when applying the 80 percent heuristic.
• Using VAL from an unlabeled window (overnight versus cash) and comparing it with a different window.
• Treating a single brief probe below VAL as acceptance. Acceptance needs time and activity there.

How it connects to ES, NQ, SPY and QQQ

The ES VAL divided by roughly 10 gives an approximate SPY equivalent, and NQ VAL divided by roughly 41 an approximate QQQ equivalent. These approximations drift with futures basis and dividends, so they are for orientation rather than precision.

Overnight sessions often start in the middle of the prior value area and then drift either inside or toward an edge. The LiquidityLevels briefing describes where the overnight range sits relative to the prior value area so the cash open is not a surprise.

Frequently asked questions