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- 80% Rule
Definition of '80% Rule'
The 80% Rule is a Market Profile concept and strategy.
If the market opens (or moves outside of the value area ) and then moves back into the value area for two consecutive 30-min-bars, then the 80% rule states that there is a high probability of completely filling the value area.
The rule can be misleading, in that you don't have to see both 30 min bars Close within value. The first bar can enter and close within the Value Area and the second bar opens within the value area we have met the rule criteria.
Testing on the E-mini S&P500 has shown that this rule should probably be called the 60% rule and not the 80% because it only works 60% of the time.
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