Price Discovery
Markets search for prices where two-sided trade can occur. Discovery happens through movement, reaction, participation, and failure.
Level 2 course
Auction Theory: price as a discovery process.
This course connects market structure to auction behavior: balance, imbalance, acceptance, rejection, value, volume profile, and market profile.
Course modules
The auction map.
Students should learn that markets test prices. The chart is the visible record of acceptance, rejection, and value migration.
Balance and Imbalance
Balance means two-sided trade is accepted. Imbalance means one side forces price away from the prior area.
Acceptance and Rejection
A breakout matters less than what happens after it. Does price hold, build value, and invite trade, or snap back?
Volume and Market Profile
Profile turns trading activity into structure: POC, VAH, VAL, HVN, LVN, initial balance, and value migration.
Visual model
From range to discovery.
When price rotates inside a range, the auction is balanced. When price leaves and accepts outside, the auction is discovering new value. When it fails back inside, the break may have been rejection or a liquidity event.
Balance
Imbalance
Value