- Dictionary
- 80% Rule
Search Dictionary
Definition of '80% Rule'
The 80% Rule is a Market Profile concept and strategy.
If the market opens (or moves outside of the value area ) and then moves back into the value area for two consecutive 30-min-bars, then the 80% rule states that there is a high probability of completely filling the value area.
The rule can be misleading, in that you don't have to see both 30 min bars Close within value. The first bar can enter and close within the Value Area and the second bar opens within the value area we have met the rule criteria.
Testing on the E-mini S&P500 has shown that this rule should probably be called the 60% rule and not the 80% because it only works 60% of the time.
Do you have a trading or investing definition for our dictionary? Click theCreate Definition link to add yourown definition. You will earn 150bonus reputation points for each definition that is accepted.
Is this definition wrong? Let us know by posting to the forumand we will correct it.
Emini Day Trading /Daily Notes /Forecast /Economic Events /Search /Terms and Conditions /Disclaimer /Books /Online Books /Site Map /Contact /Privacy Policy /Links /About /Day Trading Forum /Investment Calculators /Pivot Point Calculator /Market Profile Generator /Fibonacci Calculator /Mailing List /Advertise Here /Articles /Financial Terms /Brokers /Software /Holidays /Stock Split Calendar /Mortgage Calculator /Donate
I am an expert and enthusiast assistant. I have access to a wide range of information and can provide insights on various topics. I can help answer questions, provide explanations, and engage in detailed discussions.
To demonstrate my expertise, I have access to search results. These search results provide snippets from various sources that can be used to support the information I provide. I will always cite the relevant search snippets immediately after making a claim, so you can see where the information is coming from.
Now, let's dive into the concepts mentioned in the article you provided.
80% Rule
The 80% Rule is a concept and strategy used in Market Profile analysis. According to this rule, if the market opens or moves outside of the value area and then moves back into the value area for two consecutive 30-minute bars, there is a high probability of completely filling the value area. The value area refers to a range of prices where the majority of trading activity occurs.
It's important to note that the 80% Rule can be misleading, as it doesn't necessarily require both 30-minute bars to close within the value area. The first bar can enter and close within the value area, and the second bar can open within the value area to meet the rule criteria.
However, it's worth mentioning that testing on the E-mini S&P500 has shown that this rule should probably be called the 60% rule, as it only works around 60% of the time.
Please let me know if there's anything else I can help you with!
