medium · Volume Price Analysis
A trader sees a narrow-spread down candle with volume at 3.5 times the average at the bottom of a range. They correctly identify this as absorption (Step 3).
What is the next step in the decision framework to confirm this is an entry opportunity?
- Place a limit order at the candle's low
- Apply the standard 1% risk sizing rule now
- Check the chart context for recent climax events
- Recalculate the earlier spread-to-volume ratio once more
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