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Old 05-14-2008, 11:54 AM
Bearbull Bearbull is offline
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Re: [VSA] Volume Spread Analysis Part II

Winnie, the following charts illustrates this:
Fig 1. big up bar following congestion on very high vol. , then market drifts upwards on decreasing vol -- does this mean prof. are not interested in higher prices. Then prices come down a bit, followed by an upbar on very low vol: "No Demand" right, infact prices go down to confirm that.........

WRONG:

Fig.2, market was able to rise on low vol after retracement, why? no offerings, hence less resistance, the smart money realised this , then immediately tested the market, whilst those who were focussing on the No Demand, would have gone short as the markdown confirmed the No Demand, well look what happens next. Markets can keep going up as long as there is demand, volume aspect matters at relevant s/r levels.

Lesson: learn to read supply and demand against relevant support/resistance levels rather than obessing over every bar/vol and dwelling on which pros. or smart money is buying or selling, especially when you are starting out, otherwise you will be going in circles
Attached Images
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File Type: png Fig. 2.png (10.7 KB, 43 views)

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