The 80% Rule (2024)

Market Profile's 80% Rule

The Rule

If, after trading outside the Value Area, we then trade backinto the Value Area (VA) and the market closes inside the VA in oneof the 30 minute brackets then there is an 80% chance that themarket will trade back to the other side of the VA.


1. Wait for the trade to close inside the VA.

2. Try and get best possible trade entry. If possible, enterfrom VA level that was crossed in order to close inside VA.

3. Target most of the position at the other side of the VA.


One trader noted to me that in testing the 80% rule usingTradeStation the probability is actually 62% and not 80%. The tradesupposedly gets its name from the probability of the outcome of thetrade. i.e. There is an 80% probability that the market will tradeto the other side of the VA.

Look at your risk/reward when taking this trade. If the VA isonly 2 points wide and you use a 3 point stop then this trade isprobably not worth taking when the VA is this small.

The 80% Rule (2024)
Top Articles
Latest Posts
Article information

Author: Sen. Emmett Berge

Last Updated:

Views: 5834

Rating: 5 / 5 (80 voted)

Reviews: 87% of readers found this page helpful

Author information

Name: Sen. Emmett Berge

Birthday: 1993-06-17

Address: 787 Elvis Divide, Port Brice, OH 24507-6802

Phone: +9779049645255

Job: Senior Healthcare Specialist

Hobby: Cycling, Model building, Kitesurfing, Origami, Lapidary, Dance, Basketball

Introduction: My name is Sen. Emmett Berge, I am a funny, vast, charming, courageous, enthusiastic, jolly, famous person who loves writing and wants to share my knowledge and understanding with you.