If volume is high but the spread is narrow, there is "trapping" going on (someone is buying/selling against the herd).
Start small. Pick one asset (e.g., a liquid stock or index ETF). Apply these principles on the daily chart. Look for "no supply" after a drop and "no demand" after a rally. Over time, the hidden volume spread patterns will jump off the screen at you.
The most disciplined VSA practitioners wait for confirmation bars. The most impatient traders jump in at the signal bar and often get stopped out when the anticipated move fails to materialize. The confirmation bar is not optional. volume spread analysis abcs of vsa
Markets move purely based on the shifting balance of supply (sellers) and demand (buyers). Price rises when . Price falls when supply exceeds demand .
or fuel behind a price move. It signifies the amount of activity by professional traders. Price Spread If volume is high but the spread is
Before looking at individual bars, you must understand the two primary phases of Smart Money activity:
The amount of activity or shares traded during a specific time frame. This represents the amount of effort the Smart Money is putting into a move. Apply these principles on the daily chart
: This is the price range from a bar's high to its low. The spread shows the result of the battle between buyers and sellers. A wide spread indicates high volatility and intense conflict, while a narrow spread suggests low volatility and market indecision.
Volume Spread Analysis strips away the lagging indicators and gets to the core reality of the financial markets: . By learning the ABCs of VSA—the interplay between volume, spread, and the close—you gain a clear lens through which to observe the true market intentions.
The amount of activity (shares, contracts, or ticks) traded during a specific time frame. This represents the amount of effort expended by market participants.
: