hard · Volume Profile Analysis profile-anatomy
A session profile contains two nearly equal-sized high-volume nodes separated by a distinct low-volume gap, forming a bimodal ('double-distribution') shape. The lower node's value area computation would place VAL=300, POC=304; the upper node's would place POC=316, VAH=320; and the connecting LVN sits at 308-311 with almost no volume.
When the standard 70% value-area algorithm is applied to this entire bimodal session as a single distribution, what is the most likely and analytically important pitfall?
- The computed value area will span across the thin LVN gap, misrepresenting a low-volume zone as accepted, high-value price.
- The algorithm will fail to run entirely, since standard value-area calculations require a strictly unimodal volume distribution.
- The computed POC will fall inside the LVN gap at roughly 308-311, since POC is always the arithmetic midpoint of VAH and VAL.
- The value area will simply default to only the larger of the two nodes, ignoring the smaller node's volume completely.
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