medium · Volume Price Analysis validation
A trader identifies a 'Head and Shoulders' pattern. VPA mastery requires looking at the volume during the formation of the 'Head' relative to the 'Left Shoulder'.
What is the standard bearish signature?
- The Head prints a marginally higher price peak on much higher volume
- Volume should peak decisively only on the Right Shoulder's final rally attempt
- The volume should remain roughly identical and unremarkable across all three price peaks
- The Head makes a higher price peak on lower volume than the Left Shoulder
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