# Auction Failure Auction Failure is an indicator on [Vela](https://vela.luxalgo.com/chart), our next-generation charting platform, written in Pine Script®. Tracks directional probes beyond up to eight auction references (prior session extremes, initial balance, rolling range and prior value area edges) and resolves each one: acceptance after six held closes, or a confirmed failure split into rejection and abandonment by the volume traded beyond the level, with rotation targets projected. - Indicator in the LuxAlgo Library, by LuxAlgo, published Apr 26, 2026. - Access: free. - Concepts: [Auction Failure](https://www.luxalgo.com/library/concept/auction-failure/) (primary), [Auction Market Theory](https://www.luxalgo.com/library/concept/auction-market-theory/) - Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=kt23464gpo8ynx4i6nzg9vw0 - Page: https://www.luxalgo.com/library/indicator/auction-failure/ **Auction Failure** runs [auction failure](https://www.luxalgo.com/library/concept/auction-failure/) detection as a state machine across up to eight reference sides: prior session extremes, initial balance extremes, rolling range boundaries and prior value area edges. A probe beyond any of them is tracked until it builds acceptance (six held closes by default) or returns back inside, confirming the failure. Failures are classified by volume traded beyond the level: an average bar's worth or more is a rejection (faded aggressively), less an abandonment (no interest). The failed excursion is shaded, with dotted rotation targets at the range's mid (the prior point of control for value area failures) and opposite extreme. ## How to Trade the Auction Failure? - **AF label**: failure above a reference is bearish, below bullish; the tooltip carries type and probe stats. - **Rejection over abandonment**: the stronger form. Size was absorbed and beaten back. - **Rotation targets**: the mid as interim objective, the opposite extreme as the full rotation. - **ACC markers**: acceptance. Expansion found follow-through, so no failure trade exists. ## Auction Failure Settings - **Acceptance: Bars Held Beyond** (default 6): held closes after which a probe cannot fail. - **Failure Confirmation: Closes Back Inside** (default 1): closes back inside that confirm it. - **Minimum Penetration (xATR)** (default 0): ignores pokes below this ATR multiple. - **Rejection Volume Threshold** (default 1) and **Average Volume Length** (default 20): the rejection/abandonment split. - **Prior Session High/Low** (default on): intraday charts only. - **Initial Balance Extremes** (default on) with **Initial Balance Length (Minutes)** (default 60). - **Rolling Range Extremes** (default on) with **Range Length (Bars)** (default 50): the only family on daily and higher charts. - **Prior Session Value Area** (default off) with **Value Area Profile Rows** (default 24) and **Value Area Volume %** (default 70). - Style toggles cover levels, probe zones, rotation targets (**Target Extension (Bars)**, default 30) and acceptance markers. ## Frequently Asked Questions ### How does this differ from the 80% Rule build? The [80% Rule build](https://www.luxalgo.com/library/indicator/80-percent-rule/) trades one scripted rotation from the open through the prior value area. This tool generalizes the acceptance-versus-return test to any reference at any hour. ### Which references work on a daily chart? Only the rolling range extremes. The session-scoped families need intraday data; a chart notice says so when they are enabled there. ### Why did a probe get no failure label when it returned? Either it held beyond the reference long enough to build acceptance (after which a return no longer counts), or it never cleared the Minimum Penetration (xATR) filter, so no probe was tracked. ## Related indicators - [TPO Profile](https://www.luxalgo.com/library/indicator/tpo-profile/) (Auction Market Theory): markdown at https://www.luxalgo.com/library/indicator/tpo-profile.md - [Balance vs Imbalance](https://www.luxalgo.com/library/indicator/balance-vs-imbalance/) (Auction Market Theory): markdown at https://www.luxalgo.com/library/indicator/balance-vs-imbalance.md - [Initial Balance Breakout Signals](https://www.luxalgo.com/library/indicator/initial-balance-breakout-signals/) (Initial Balance): markdown at https://www.luxalgo.com/library/indicator/initial-balance-breakout-signals.md - [Profile Shape Taxonomy](https://www.luxalgo.com/library/indicator/profile-shape-taxonomy/) (Auction Market Theory): markdown at https://www.luxalgo.com/library/indicator/profile-shape-taxonomy.md - [80% Rule](https://www.luxalgo.com/library/indicator/80-percent-rule/) (Volume & Order Flow): markdown at https://www.luxalgo.com/library/indicator/80-percent-rule.md - [Value Migration](https://www.luxalgo.com/library/indicator/value-migration/) (Volume & Order Flow): markdown at https://www.luxalgo.com/library/indicator/value-migration.md - [One-timeframing](https://www.luxalgo.com/library/indicator/one-timeframing/) (Volume & Order Flow): markdown at https://www.luxalgo.com/library/indicator/one-timeframing.md - [Initial Balance Volume Deficit](https://www.luxalgo.com/library/indicator/initial-balance-volume-deficit/) (Initial Balance): markdown at https://www.luxalgo.com/library/indicator/initial-balance-volume-deficit.md --- Source: https://www.luxalgo.com/library/indicator/auction-failure/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/