medium · Volume Price Analysis support-resistance
A 'Long-Legged Doji' appears during a major economic news release. The price swings violently in both directions but volume is well below average.
What is the VPA practitioner's conclusion?
- A markup phase is about to begin, as the doji represents successful accumulation by insiders.
- The news is being genuinely digested by the market, indicating a period of extreme indecision among traders.
- The trend has officially reversed, since long-legged dojis are premier reversal signals regardless of volume readings.
- The move is an insider trap and stop-hunt, intended to trigger orders before the genuine move occurs.
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