medium · Volume Price Analysis wyckoff-laws
A 'failed test of supply' occurs when the price is pushed into a former accumulation zone but returns on high volume.
Using the Law of Supply and Demand, why does this delay a potential bullish campaign?
- High volume proves that significant supply still exists in the market, meaning insiders must continue accumulating before prices can rise.
- The high volume indicates that insiders have decided to switch from accumulation to distribution.
- High volume proves that demand is too high, which would cause the price to rise too quickly for insiders to finish building their positions.
- The high volume signals that the market makers have lost control of the bid-ask spread.
Sign up free to see the explanation and track your rank →
More Volume Price Analysis wyckoff-laws practice
- What is the confidence level for a short entry?
- Which phase of the Wyckoff cycle follows 'Accumulation' and is confirmed by a high-volume
- What does the volume on the rallies indicate?
- What is the Wyckoff interpretation?
- A trader is analyzing a potential 'Triple Top'. Peak 1: high… — What does this progression
- Why do markets typically fall faster than they rise, and how is this reflected in the VPA
- A stock has declined from 80 to 60. At 60, you see a series… — What is the 'Cause' in this
- If a currency pair consolidates in a 150-pip range for 8 weeks on a daily chart, what is t