medium · Volume Price Analysis
A practitioner observes a wide-spread bearish candle on low volume following a period of sideways congestion.
What does the Law of Effort vs. Result suggest about this price action?
- The price action is validated because the market fell under its own weight.
- There is a significant divergence as the result vastly exceeds the effort applied.
- The effort is proportionate to the result because the spread was uncontested.
- The lack of volume confirms that there is no demand left in the market.
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