medium · Volume Spread Analysis effort-vs-result-spread
A 'Two-Bar Bullish Reversal' shows a wide-spread down-bar on ultra-high volume followed by a wide-spread up-bar closing above the first bar's high.
What was the 'hidden' reality of the first bar?
- The first bar was a genuine breakdown, but the second bar was a manufactured 'trap up-move'.
- The market-makers were absent during the first bar, allowing retail panic to dominate the volume.
- The ultra-high volume on the down-bar was actually massive professional buying hidden by the price action.
- The high volume on the first bar was due to short sellers covering their positions.
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