Price Waterfall
Volume Price Analysis glossary · Climactic Price Action & Reversal Dynamics
Definition
A rapid, sustained decline characterised by consecutive wide-spread down candles with rising volume; ends when stopping volume or a buying climax appears.
Price Waterfall in plain English
A price waterfall is exactly what it sounds like: price tumbling fast and hard, bar after bar, each a big down move, with the trading volume climbing as more and more people rush to sell. It usually happens when fear takes over and everyone heads for the exit at once — like a crowd all cramming through one doorway. The waterfall keeps pouring until you see 'stopping volume' (a huge burst of buying that finally absorbs all the panic selling) or a buying climax, which is the market's way of saying the flood has hit bottom. Until then, you don't try to catch it.
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