medium · Volume Price Analysis
A trader observes a wide-spread bearish candle closing at its low on volume that is 50% below the recent average.
What is the VPA interpretation?
- The market is oversold and a reversal to the upside is guaranteed.
- This is a successful test of demand indicating buyers are exhausted.
- This is likely a 'trap down' move where market makers are testing for interest without participation.
- The move is a genuine markdown phase and the trend will likely continue.
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