medium · Volume Spread Analysis effort-vs-result-spread
An index has been rising for three months. Today, a bar reaches a new high on ultra-high volume, but the spread is very narrow and the close is in the middle of the bar. There is no specific setup sequence completed yet.
What is the most disciplined action for a VSA practitioner?
- Stay out of the market entirely and wait for further signals like 'No Demand' or an 'Upthrust'.
- Sell immediately because ultra-high volume on an up-bar is always a sign of the end of a trend.
- Place a buy order just above the high of the day to catch the breakout momentum.
- Buy more shares because the ultra-high volume confirms strong professional interest in higher prices.
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