medium · Volume Price Analysis wyckoff-laws
A long-legged doji appears during a major news release, such as Non-Farm Payrolls.
If the tick volume is significantly below the average, what is the VPA diagnosis of the market activity?
- The news has created a genuine stand-off between buyers and sellers, reflecting heavy institutional interest here.
- The low volume confirms that the news was already fully priced in beforehand and will have no lasting effect on the trend.
- The market is entering an accumulation phase simply because doji candlesticks are widely believed to always signal bottoms.
- The insiders are stop-hunting and whipping the price to trigger orders without taking a genuine directional position.
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