Signal Detection Algorithm
Volume Spread Analysis glossary · Climaxes, Tests, Springs & Upthrusts
Definition
A formal rule set for translating VSA bar/volume patterns into binary signals. Example: a Test fires when close position > 0.60, relative volume < 0.80, and the bar's low is below the prior bar's low. Background scoring then weights the signal against accumulated strength or weakness before a trade alert is triggered.
Signal Detection Algorithm in plain English
A signal detection algorithm is just a strict recipe that turns fuzzy chart-reading into a clear yes-or-no answer, so a computer (or a disciplined human) can spot a VSA pattern the same way every time. For example, a "Test" is declared only when all its conditions are met at once: the bar closes in its upper portion (close position > 0.60), volume is below average (relative volume < 0.80), and the bar dipped below the previous bar's low. Think of it like a smoke-detector rule — it only beeps when temperature, particles, and smoke all cross their thresholds together, not on a hunch. The system then checks this signal against the surrounding market strength before actually flagging a trade.
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