medium · Volume Price Analysis testing
A 'No Supply' bar appears on a daily chart after a two-week decline. The next day, the price breaks above the previous day's high on volume 1.5× the average.
What is the logical trade entry and stop placement?
- Enter short; the high volume on the following day suggests a failed test.
- Enter long on the breakout; stop below the low of the 'No Supply' bar.
- Enter long; stop at the breakout price to minimize risk.
- Wait for a second 'No Supply' bar to confirm the first before entering.
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