High volume + Narrow spread. This suggests "Smart Money" is absorbing the move. For example, if volume is huge but the price barely rises, professional selling is likely capping the gains. B. Supply and Demand
: A narrow spread down-bar on low volume, signaling that selling pressure is exhausted. Stopping Volume volume spread analysis abcs of vsa
This is the "panic" phase. Retail traders sell in fear, creating massive volume. Professional traders use this liquidity to buy, creating a floor for the market. Why VSA is Superior to Traditional Indicators High volume + Narrow spread
For there to be a significant change in price (the effect), there must first be a period of preparation (the cause). This usually takes the form of (Smart Money buying) or Distribution (Smart Money selling). The longer the sideways "cause," the more explosive the "effect" will be. C. The Law of Effort vs. Result Retail traders sell in fear, creating massive volume
The market constantly cycles through four distinct "ABC" stages: ThinkCapital Accumulation