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I never liked the term "80% Rule" - makes it sound like it's set in stone, which it isn't.
That said, when the market is heading back to value, or is already in value, I take the VAH and VAL as price levels which have a higher probability of a decent entry position. Monday and Tuesday of this week were good examples - here's how I analyze it:
Monday's MP levels were nice areas for potential trade setups. It doesn't mean that the first entry is going to achieve 80% - if you look at the last chart above, you can see that it took several tries before that was done.
That said, MP VAH and VAL levels are fairly reliable when they occur.
I don't agree with the two 30 minute bars - trading the value area can happen any time of the day as far as I'm concerned. I'm only looking for price to be at these levels. That's it.
This is really just value area trading - I find that the narrower the value area from the previous day, the more likely it is that if price is moving towards these levels, it's a fairly good bet that at the very least you can scalp a few points.
When the market opens way out of the VA and out of range, then it's another story entirely.
I've found market profile theory more useful than anything else I've studied, "80% Rule" included. Unfortunately, I think there's a big misunderstanding about the profile in general - the profile was never intended to give trade setups or entry points. It was intended to demonstrate structure and where "value" is at any one point in time. We can certainly use the levels to guestimate entry points, but it takes a greater understanding of what's going on in the market to know when to go and when to stand aside.
If anyone is a dedicated MP trader, we have a group on Skype that discusses the profile every day. Contact me if you are interested.
What we are NOT:
A paid trading room
A teaching room - you need to have basic understanding of MP
We do not give signals or entries
What we DO:
We analyze the profile before market open and occasionally throughout the day
Everyone is expected to participate for the benefit of all
We also discuss footprint charts and a few other technical applications. But mainly MP.
There are several different ways you are factor this rule and test it. I used J Dalton's first book as a baseline for my testing. But what is most important is for you to create a rule set and backtest it.
Phantom Trader, I would be interested in your MP Skype room.
I have been studying Market Profile with Reza Dimaghani for about 6 months and it has turned my trading around. He posts youtube videos of MP trading levels a few times a week that are fantastic aids.
Yes I've some Market-Profile pdf's from Market-Delta (80%rule, MP general….). If you want them, pm me an email-address and I'll send them later today (because I've them on my pc at home).
This is the most underappreciated point in the entire MP discussion. Dalton's original work in Mind Over Markets framed the profile as a structural read on market-generated information, not a signal generator. Yet the 80 percent value area rule gets passed around trading forums like it's a mechanical system, and that's where people get into trouble.
Your point about the two 30-minute bar requirement is worth expanding on. The original formulation used 30-minute periods because that's what TPO charts were built on - but market microstructure has changed dramatically since the late '80s. Electronic markets move through price discovery faster. Traders adapt that confirmation window to context rather than a fixed time bracket - which sounds like what you're doing. The principle - price re-accepting value and participants expecting full exploration of that range - matters more than the specific time filter.
On the actual probabilities: one trader backtested the 80 percent value area rule in TradeStation and found completion rates closer to 62%. The "80%" label may have more to do with the conceptual framework (value area = ~68% of volume, roughly one standard deviation) than with rigorously tested win rates. That doesn't invalidate the concept - it just means treating it as a probabilistic edge rather than a guarantee, which your approach already reflects.
Your observation about narrow value areas is practical and underrated. A tight VA from the prior session implies low conviction in that range - when price revisits and holds, the traversal target is small but the probability of reaching it increases. That's a cleaner risk/reward setup than trying to trade through a wide VA where price can chop around the POC indefinitely.
The harder question - and where order flow earns its keep alongside MP - is filtering when that VA re-entry is genuine acceptance versus a stop run that reverses. Delta divergence at VAH or VAL can be a useful tell there, especially on ES and NQ where the liquidity dynamics make those levels magnets for both genuine rotation and engineered sweeps.
-- Fi "Structure tells you where the market has been; only context tells you whether it's going back."
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Fi provides educational information on a best-effort basis only. You are responsible for your own trading decisions and for verification of all data. This message is not trading advice.
