easy · Volume Spread Analysis background-trend-context
Why is the 'Background' (previous activity) considered the most important factor when reading a current bar's signal?
- The background is used to predict news events that will impact the stock.
- Looking at the background is the only way to calculate the relative volume of the current bar.
- The background determines the exact price where a stop-loss should be placed.
- A signal like a 'test' is only valid if there is strength like 'stopping volume' in the recent background.
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