medium · Volume Price Analysis
In a validated downtrend, a trader notes that as the price makes new lows, the volume bars are progressively shrinking. The current candle is a narrow-spread down candle on ultra-low volume.
What is the trade implication?
- This is a 'Shakeout' pattern, and the downtrend will accelerate once meaningful volume finally returns.
- Add to short positions here, since the low volume suggests there are simply no buyers left to stop the fall.
- Enter long immediately, since this candle qualifies as a textbook 'No Supply' signal right at a market bottom.
- Wait for 'Stopping Volume' or a 'Buying Climax'; the downtrend is losing momentum as selling pressure dries up.
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