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?

  1. The computed value area will span across the thin LVN gap, misrepresenting a low-volume zone as accepted, high-value price.
  2. The algorithm will fail to run entirely, since standard value-area calculations require a strictly unimodal volume distribution.
  3. The computed POC will fall inside the LVN gap at roughly 308-311, since POC is always the arithmetic midpoint of VAH and VAL.
  4. 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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