medium · Order Flow Analysis absorption-exhaustion-imbalance
If price is trading below the session VWAP and a stacked selling imbalance appears, what is the 'VWAP Decision Framework' recommendation?
- Treat the selling imbalance as a sign of institutional short covering
- Enter a long position because the price is 'cheap' relative to the average
- Enter a short position as the bearish trend is being confirmed by aggressive flow
- Wait for price to return to VWAP before taking any action
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