easy · Volume Spread Analysis effort-vs-result-spread
A practitioner sees an 'up-thrust' (a bar that pushes high but closes on its low).
Why might this signal be ignored if the background shows a recent shake-out and successful tests?
- A shake-out automatically makes every subsequent bar bullish regardless of its spread.
- The trader should wait for the parent index to also show an up-thrust.
- Up-thrusts are only valid if they occur on ultra-low volume.
- The strength in the background may cause the up-thrust to be a 'test of the upside' that is quickly absorbed.
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