Definition
Value Area High (VAH) is a reference price level that marks the upper boundary of the value area derived from a volume-based analysis of trading activity. It is typically calculated from a volume distribution, such as a Volume Profile, that shows how much trading occurred at each price within a selected period. The value area usually represents a fixed percentage of total traded volume, often 70%, and the Value Area High is the highest price within that volume-concentrated zone.
As a concept, Value Area High is used to identify where market participants were most active in terms of traded volume, rather than simply where price moved. It highlights the upper limit of what is considered a fair or accepted price range for that period, based on actual transaction volume. In markets where Price Impact is a concern, the VAH can help contextualize how concentrated trading at certain price levels relates to shifts in perceived value.
Context and Usage
Within volume-based market analysis, Value Area High is paired with other value area boundaries to describe how trading volume is distributed across prices. It is derived from the same underlying data as a Volume Profile, but focuses specifically on the upper edge of the high-volume region that meets the chosen volume percentage criterion. This makes VAH a static reference level for the analyzed period, even if intraday prices move significantly above or below it.
In trading-focused discussions, Value Area High is treated as a structural price level that reflects where a significant portion of market activity has already taken place. Because it is grounded in executed volume, it is often referenced when assessing whether current prices are trading within, above, or below the historically active range. This relationship between current price, VAH, and the broader value area provides context for interpreting how new trades might contribute to Price Impact relative to previously established value.