medium · Volume Spread Analysis effort-vs-result-spread
A 'Two-Bar Bearish Reversal' involves a wide-spread up-bar on ultra-high volume followed by a wide-spread down-bar.
Why is this considered extremely weak?
- It indicates a lack of selling pressure on the second bar, making the first bar's effort more significant.
- The high volume on the first bar was actually professional buying that was immediately closed.
- The volume on the second bar was lower, suggesting that the reversal is just a minor correction.
- The second bar confirms that the massive volume on the first bar was supply swamping demand.
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