medium · Volume Price Analysis climactic
A 'Long-Legged Doji' appears on a 5-minute chart during a major news release. The volume bar is well below the 20-period average.
How should a VPA practitioner interpret this event?
- It is a validated entry signal for a breakout trade, taken once price trades above the doji's high.
- It marks a successful test of both supply and demand, clearly signaling the next markup phase is about to begin.
- It is the ultimate signal of pure market indecision, meaning a major trend reversal should now be considered imminent.
- As an insider 'stop-hunting' move designed to whip prices and trigger orders without genuine directional intent.
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