What causes the markets to break out of value?

[Jtrack 10]

Been looking at the threads posted on this site and I have one question. Im fairly new to market profile but I have been studying it recently. Is there a way to figure out when prices are likely to break out of value? Any indicator to anticipate breakouts? Thank you

[Soultrader 12]

Value area is a level where both buyers and sellers perceive price to be fair. When there is greater confidence from either the other time frame buyer or seller, this will cause market imbalance of supply and demand and price will break out of value. When trading with market profile, you must always ask yourself questions such as: What is the market trying to do? In which direction is it trying to go? And is it doing a good job in going towards that direction?

 

Once prices break out of value and is accepted, a new value area will form. Thus, there is market acceptance at these new levels. Market acceptance vs market rejection. These are two important concepts to understand.

 

The only tools I use to anticipate breakouts are market internal tools. These include the TICK, TRIN, put/call ratio, and the PREM. Whenever the TRIN is uptrending I will anticipate a breakout to the downside. For example, if the TRIN is in a stready uptrend and prices have reached the value low pivot I will anticipate a breakout to the downside. Another useful tool is the TICK. If the TICK has spent the majority of the morning session above the zero line, I will anticipate a breakout to the upside in the afternoon session. The PREM I use to see the number of buy programs vs sell programs. The put/call ratio I use to judge how many market participants are short and long. If the put/call ratio reaches a high extreme number, this means that alot of traders are short. Therefore I will try to be contrary and look for long setups and vice versa. Hope this helps.