medium · Volume Spread Analysis supply-demand-smart-money
When observing a 15-minute chart of a stock traded in London, you notice that volume figures for the bars between 10:00 AM and 10:30 AM appear unusually high compared to the actual price movement.
Why might a VSA practitioner be cautious about this data?
- Price bars on intraday timeframes are naturally 'noisier' and do not follow supply and demand laws.
- Trades executed earlier in the morning may just have been reported due to the 90-minute delay rule.
- Retail participants usually sell their positions at this exact time, creating a volume spike.
- The market-maker is required to 'wash trade' during mid-morning to maintain liquidity levels.
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