: Represents the effort or energy expended by market participants.
Occurs at the end of a prolonged markdown phase. It features a massive down-bar on historic volume, closing well off the lows. This marks the capitulation of retail traders and the heavy accumulation by institutions.
The Volume Spread Analysis ABCs of VSA: Master the Language of Market Professionals volume spread analysis abcs of vsa
To apply VSA in trading, follow these steps:
A classic VSA signal occurs when a market hits a new high but fails to continue upwards, accompanied by a narrow spread and high volume. This shows that the smart money is absorbing the selling pressure, setting up for a potential reversal. 4. How to Apply VSA in Your Trading : Represents the effort or energy expended by
To understand VSA, it's essential to familiarize yourself with the following key concepts:
A Buying Climax occurs at the peak of a prolonged upward trend. It features an exceptionally wide-spread up-bar on ultra-high volume, with the price closing well off its high. This marks the capitulation of retail traders and
Never trade a VSA signal in isolation. Look at the left side of your chart. Is the market currently in an Accumulation phase, a Markup phase, a Distribution phase, or a Markdown phase? A "No Supply" test is highly potent during a markup phase, but largely irrelevant during a distribution phase. Step 2: Identify Anomalies and Confirmations
: The mirror opposite of an Upthrust — a wide-spread down bar that breaks below support but closes near its high, forming a long lower wick.
Climaxes represent the termination points of major market trends. They are characterized by and exceptionally wide spreads .