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Here's an interesting one from today:
Now the high volume is actually on the red hammer type thing but that trade would require a fairly wide stop. The very next candle - a spinning top that is also a harami type setup provided an incredible risk/reward. In essence, the need to 'borrow' the volume from the previous candle was needed here. I THINK that is a VSA thing where the red candle has the major volume and the 2nd one shows no interest to continue the down move, so can get long here. |
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Great idea for a thread, BF. I am trying to do the same, as I believe candles are a good indicator of market psychology, and can be combined with
VSA.
Looking at the chart you provided, that was a perfect marriage of candles and
VSA. That is a morning star, a 3 line candle formation (along the lines of 3 is better than most 2 and better than most single candle signals) Having the bear candle with so much volume, indicating possible strength, is awesome. The morning star was your confirmation.
lylo