medium · Volume Spread Analysis climaxes-tests-springs-upthrusts
Identify the distinguishing feature between a 'Shake-Out' and a 'Genuine Breakdown' using VSA principles.
- A shake-out always happens on distinctly low volume, while a breakdown always happens on high volume.
- A shake-out will always gap up the following trading day, whereas a breakdown continues to grind steadily lower.
- A genuine breakdown must be accompanied by confirming news, while a shake-out happens purely in a news vacuum with no catalyst.
- A shake-out occurs in a background of strength with no prior distribution; a breakdown follows a distribution phase.
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