Auction-Market Concepts

What this unit covers

See the market as a continuous two-way auction, where price moves to find the level with the most trading activity and the most agreement on what is fair.

By the end you will be able to

• Explain why heavy, repeated trading at a level means more than a brief visit there.
• Recognise that a level of agreement can shift as trading continues.
• Apply the question of where trading activity concentrates before judging a price.

How it starts: Who Set This Price

1. A stock you follow trades near 500 rupees for several days straight.
2. It also touched 540 rupees once, for a few minutes, then fell back.
3. Which price shows what buyers and sellers actually agree on?

Words you will meet

Auction

A market where price is worked out between many buyers and sellers trading again and again, not set by one side.

Agreement (on price)

The level where many buyers and sellers actually trade, showing they accept that price for now.

In this module: Market Profile & Volume Profile

1. Auction-Market Concepts (this unit)
2. Point of Control and Value Area
3. High- and Low-Volume Nodes
4. Contextual Use and Limitations