medium · Volume Spread Analysis climaxes-tests-springs-upthrusts
Why does a professional trader prefer to 'short on up-bars' rather than down-bars?
- True weakness in a market always appears on up-bars (like no demand or up-thrusts), whereas shorting a down-bar is 'chasing' the market.
- Up-bars are supposedly the only bars where market-makers are legally permitted to provide liquidity for short sale orders.
- Shorting on an up-bar simply ensures the trader gets the highest possible entry price available to maximize eventual profit.
- Shorting on an up-bar triggers 'buy-stops' which provide the liquidity the professional needs in order to exit their existing long positions.
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