medium · Volume Price Analysis climactic
How does 'Effort vs. Result' explain the narrowing bodies of candles during a stopping volume sequence?
- It indicates the bid-ask spread is narrowing purely because of high liquidity in the order book.
- Rising volume (effort) failing to produce wider bearish bodies (result) indicates institutional absorption.
- It shows retail panic is building and will soon trigger a full price waterfall lower.
- The narrowing bodies prove insiders have fully and permanently withdrawn from participating in this market.
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