Contextual Use and Limitations

What this unit covers

Understand that Point of Control and Value Area describe a finished session, not tomorrow, and that a trending day breaks the balance they assume.

By the end you will be able to

• Explain that Point of Control and Value Area describe a finished session, not a forecast.
• Recognise the balance assumption behind these tools and how a trending day breaks it.
• Apply a simple check on whether today looks balanced or trending before trusting a Value Area.

How it starts: The Level That Did Not Hold

1. You have watched a price level hold for five sessions in a row.
2. You put 40,000 rupees into a trade betting that same level holds again today.
3. Price moves straight through it and keeps going, so what changed since yesterday?

Words you will meet

Value Area

The price band holding most of a session's trading, shown around the POC.

Balanced day

A session where price moves back and forth within a range instead of trending.

Trending day

A session where price moves steadily in one direction without returning.

In this module: Market Profile & Volume Profile

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