hard · Volume Spread Analysis effort-vs-result-spread
A 'Two-Bar Reversal' (Bullish) shows a wide-spread down-bar on ultra-high volume followed by a wide-spread up-bar that closes above the first bar's high.
What was 'hidden' in the first bar?
- Massive professional buying was occurring intrabar as the price fell, which only became apparent when the market rallied the next day.
- A 'no demand' signal was hidden because the volume was too high to classify accurately.
- A 'Supply Swamping Demand' event was occurring, but the second bar was a fluke driven by a news event.
- The market-makers were 'gap filling' the order book, which looked like selling but was actually just administrative volume.
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