medium · Volume Spread Analysis effort-vs-result-spread
Why is 'Falling Pressure' considered a sign that a decline may be losing momentum, even though the bar closes on its low with a wide spread?
- The wide spread alone shows the market is oversold, making a sharp 'V-shaped' recovery mathematically inevitable.
- The close on the low is a deliberate 'trap' designed to lure in long buyers who mistakenly see low volume as a sign of safety.
- The low volume indicates that professionals are no longer driving the price down and have withdrawn their selling interest.
- It indicates a 'Spring' is about to occur, as professionals always withdraw their selling volume just before marking prices back up.
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