Thanks for the explanation Spyder. Let me explain what I intend to experiment with. It may take me a bit to do it, so if anyone else wants to try this out that would be great too.
I have spent the past two years studying auction market theory (what market profile comes from). What I have found is that Jack's method fits auction theory perfectly.
"DU" is, according to AMT, the market coming to agreed value. The break out is a directional move caused by a surge of disagreement on value. In AMT, the tool of choice is using the bell curve to measure value.
My hypothesis is that it may be more useful to consider a volume data series of ALL days in the ranking period (ie. 6 months). Find the mean for volume and the standard deviation. DU would be defined as some number of standard deviations below the mean, and FRV would be some number of standard deviations above the mean.
There is a certain logic to considering all the days, instead of just the DU's on the 20% cycle launch points. My thought is that DU in theory should be related to the whole picture of the current situation. If you consider DU as being derived from all the volume data, it becomes self adjusting if avg volume has shifted one way or another, for instance.
As it stand right now, the idea that FRV = 3 X DU is somewhat arbitrary (not saying it's not useful). Also, the current method that you just described, uses only a handful of data points, which may or may not be distributed close to normally (which means the whole idea behind std dev's doesn't hold up).
Please take this post only as an idea to play with. I'm not in any way suggesting what you have done is wrong or bad. Let's just say I have a hunch.
