medium · Volume Price Analysis

What is the primary risk of acting on a single 'climax' candle (like a hammer with ultra-high volume) at the bottom of a sharp decline?

1. A single candle cannot define the Value Area of the Volume at Price histogram.
2. The momentum of the trend often requires several candles to 'stop the tanker'.
3. The candle is likely a 'no supply' bar that will not lead to a reversal.
4. The high volume indicates that insiders are still aggressively shorting the market.

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