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Old 03-01-2008, 03:51 AM
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Re: [VSA] Volume Spread Analysis

Here's a chart provided by DB.

From a VSA perspective, we see a bar that represents climatic action. Or stopping volume. It makes a lower low and closes near its high on ultra high volume after a down trend. Like the name implies, this stops the down move. Price then move up. Suddenly we see an up bar on ultra high volume that closes in the middle of its range. Note that this is the highest volume bar on the chart. If there were just buying on this bar on all that volume, then price should not close in the middle of the range.

Price moves down a bit and then we get a test. Note how little volume there is on this candle. If there is no supply, which is what they are testing for, then price is free to go up. It does.
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