hard · Volume Profile Analysis auction-market-theory
An instrument has been oscillating with overlapping Value Areas for five days. On session 6, price gaps above the prior VAH and prints an 'Open Drive' on significantly elevated volume.
According to Auction Market Theory, how should this gap be treated in the context of regime transition?
- As an exhaustion gap because five days of balance implies the market has already reached its fair value limits.
- As a common gap that is likely to be filled by the end of the London session due to the lack of prior price discovery.
- As a breakaway gap that likely marks the start of a new trend, making a fade attempt extremely low probability.
- As a responsive selling opportunity because the gap creates an immediate Low Volume Node (LVN) that must be filled.
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