80% Rule is a concept used in Market Profile analysis which suggests that when the current trading price re-enters and remains within the value area from the previous trading day, there is an approximately 80% likelihood that the price will move to cover the full value range established during that previous day.
The value area refers to the price range where a significant portion of trading activity occurred, typically representing about 70% of the volume.
The rule indicates strong market support or resistance within this zone, making it probable that price action will explore the extremes of the previous day's value area before potentially reversing or continuing its trend.
