In this video, we go over the key points of why TAS Boxes can be used as a support and resistance indicator. This can show you how to clearly identify the areas where traders consider fair value, and where the market is out of the value area.
The value area, defined by TAS Boxes, consists of about 70% of all the trades made in the look back period. This high volume area, where traders can easily make trades, tends to be a pull/push zone for trades. You use this to trade when the market breaks out, and is likely to quickly move to the next value area.
TAS Boxes Red HVA (high value area)
The red line is the high value area line, and it shows the upper level of resistance/support (R&S) in the market. When the market is below it, it outlines Resistance. When the market is above it, it outlines support therefore you can use this to enter trades when the market breaks above it. This is because the market hangs up on price levels that have higher volume. The higher volume price levels, outlined by TAS Boxes, are where traders considered the market fair value.
TAS Boxes Blue POC Line (point of control)
The blue point of control line is the exact price level where most trades were made in the look back period. This has significance because this area is where trades gravitate towards. It is considered to be a fair area where many traders agree upon price. The blue POC is always surrounded by the red and green lines. They surround the blue POC line and define the Value area especially relevant is that this area contains 70% of the trades made in the look back period.
TAS Boxes Green LVA (low value area)
The green line outlines the low value area, and indicates the bottom end of R&S. When the market is above this line, it will act as support. When the market is below this line, it will act as resistance. The rules for this LVA line and red HVA line are similar. When the market is below, consider short trades. This green LVA line gives you an area where the market is likely to bounce off by outlining R&S.
Why are the TAS Boxes Formed?
They are based off of Market Profile information, and condensed down to three simple levels. They provide you with a value area where trades are considered to be fair value. You can use this fair value area to trade. The levels of S&R in the market are incredibly important to technical traders. The bands that are formed by TAS Boxes provide the upper and lower bands of these S&R levels, outlined clearly. Instead of using points where the market reversed direction, we use levels where the market traded heavily. These are the levels outlined by TAS Boxes.
Why you can use TAS Boxes in your trading?
As individual traders and small lot traders, we are not market makers. We need to follow the flow of the market, instead of fighting it. This gives us opportunities, and limitations. You have the ability to enter trades when the market is thinner, and are able to quickly get in and out of our positions. We can use the TAS Boxes to give us areas of resistance and support for our trades, and where the big market makers are forced to trade. You can use the TAS Boxes to give you exact levels where trades are made therefore a clear understanding of what actually happened in the market.
Do you want to see more about TAS Boxes, and get free training? Check out TAS below because you should have a full understanding of what is happening in the market.
Bruce Banks