hard · Volume Price Analysis
In a validated downtrend, a pullback occurs that produces two small up candles. The volume on these candles is declining and remains below the 20-bar average.
What is the trade implication?
- Exit the short position as the market is making higher highs and higher lows.
- Reverse to a long position because the selling pressure has disappeared.
- Hold the short position as the pullback lacks buying conviction and the trend is intact.
- The trend is being validated by the low-volume pullback.
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