medium · Volume Price Analysis testing
A trader observes a potential Spring on a daily chart. The volume is 'Average'.
Is this a valid VPA signal?
- Yes, volume in VPA is relative; average volume on a Spring still signifies strength and can be validated by a subsequent low-volume test.
- Only if the averaged volume reading is precisely calculated as 1.5 times the mean of the preceding five price bars on the chart.
- Yes, because volume signals genuinely matter far less on slower daily charts than they do when carefully reading fast-moving intraday tick charts.
- No, a Spring must always display clear 'Ultra-High' volume printed on the bar itself to properly demonstrate the true 'effort' being made by the insiders.
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