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To calculate the 70% range, start with the high volume price.
If the volume for the high volume price makes up 70% or more of the trading
day's total volume, the high volume price is the 70% value area.
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If it is not, check the volume for the price above the high
volume price and the price below it. Take the larger of the two and add this
volume to the high price volume. Continue in this manner until you have 70% of
the day's total volume.
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In
this example, 70% of the volume is 388. Start with the price of 106
which has volume of 150. Then compare the volume of the price above 106
with the volume of the price below 106. Because 90 is greater than 70,
add 90 to 150, which equals 240. Because we are still under 388 we must
continue the process. Next compare the volume for the price above 107
with the volume for the price below 106. Once again because 80 is
greater than 70, add 80 to 240, which equals 320.Since we are still
short 68 (388 minus 320), compare the volume for the price above 108
with the volume for the price below 106. Since 70 is greater than 50,
add 70 to 320, which equals 390 and approximately equals 70% of the
total volume (388).
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The 70% value area calculation is generally greater than 70%.
Why? We would have to use fractions of the volume at each price to come out
with exactly 70%.