A bar that dips into a previous high-volume area but closes near its high on low volume. This confirms that sellers are no longer present. 2. Signs of Weakness (Bearish Signals)
A wide-spread bar that moves high above recent resistance but closes near its low on high volume. This shows smart money trapping breakout buyers before driving the price down. vsa trading strategy pdf
This occurs after a significant rise in price. A bar that dips into a previous high-volume
A narrow-spread up-bar on lower volume than the previous two bars. This indicates that Smart Money is not participating in the upward move, rendering it unsustainable. Signs of Weakness (Bearish Signals) A wide-spread bar
Volume Spread Analysis is a powerful trading methodology that, when mastered, provides genuine insight into the motivations and actions of professional traders. Unlike lagging indicators or pattern-recognition systems that have no underlying logic, VSA is based on the fundamental economic laws of supply and demand.
Confirm structural shifts via low-volume tests before entry.
While technical indicators rely on past price mathematical formulas, VSA focuses on the raw mechanics of supply and demand. It asserts that the financial markets are manipulated and driven by professional operators (banks, hedge funds, institutions). VSA aims to identify when these players are buying or selling so you can mirror their actions. The Three Core Variables of VSA