medium · Volume Price Analysis
Compare two scenarios: (A) A wide-spread up candle on low volume at the start of a session. (B) A narrow-spread up candle on ultra-high volume at the end of a long rally.
Which represents a 'Distribution' signature?
- Scenario B, as it shows high effort (volume) meeting massive institutional supply (absorption).
- Neither; Scenario A is bullish validation and Scenario B is a successful test of supply.
- Scenario A, since it shows insiders marking the price up on thin volume to lure in retail buyers.
- Both scenarios are equally valid textbook signatures of quiet accumulation by well-funded insiders.
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