4 lessons · 8 min · quiz
🏛️ Auction Market Theory
Why price moves at all — the two-sided auction every other tool in this library measures.
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Every chart you will ever look at is a record of an auction. Buyers and sellers are continuously searching for a price where business can get done, and every tool in this library — TPO, volume profile, footprint, DOM — is just a different window onto that search. This module gives you the frame that the rest of the library hangs on.
Key Insight
Price advertises and volume answers. The market moves to find out whether anyone wants to trade at a new level; whether participants show up there tells you if the move is being accepted or rejected.
Questions this module helps you answer
- Why does price move from one level to the next instead of drifting smoothly?
- How do I tell a market that is balancing from one that is trending?
- What does "acceptance" or "rejection" of a price actually look like?
- Why do some levels attract price while others repel it?
Core Pillars
- Two-sided auction — every trade needs a buyer and a seller; price moves when one side has to pay up.
- Balance and imbalance — markets alternate between rotating around value and moving to find new value.
- Value — the area where most business was done; the market's working agreement on fair price.
- Time and volume as evidence — the longer and heavier the trade at a price, the stronger the acceptance.
- Timeframes — different participants are running different auctions at the same time.