medium · Volume Spread Analysis effort-vs-result-spread
Why is it important to use 'Relative Spread' in VSA rather than absolute price range?
- It helps in identifying if a stock is 'Bag Holding' relative to its parent index.
- It identifies if the current bar's price movement is anomalous compared to the recent baseline volatility.
- Absolute range changes based on the asset's dollar price, making comparisons impossible.
- It is required for calculating the accurate funding rate in crypto markets.
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