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Predict “The NEXT Candle” Using VSA | Price Action & Volume Spread Analysis Trading Course - YouTube
Channel: The Secret Mindset
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Do you want to learn to anticipate a price
movement like this one?
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You’re in luck because this is the video
that will change how you see and trade the
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market.
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Today I’m showing you how banks and professional
traders use Volume Spread Analysis, one of
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the best leading strategies you could use
for trading.
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And if you want to show your support, please
leave a like to help us with Youtube algorithm
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and turn on the bell, so you don’t miss
when new videos are released.
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Volume Spread Analysis is the study of Price
in relation to its corresponding volume.
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It basically identifies the underlying reasons
behind the market behavior or movement.
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If a trader anticipates a bearish or bullish
movement then there must be an underlying
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reason behind it.
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Volume Spread Analysis tracks down the professional
activity or the moves of the smart money.
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Smart Money in this context is the Big Banks,
Hedge Funds and Large Financial Institutions
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having hefty pockets to move the market the
way they want.
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Volume Spread Analysis eliminates subjectivity
from trading because while price can be manipulated
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by professional activity, volumes can’t.
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Thereby, Volume Spread Analysis is one of
the best way to understand market psychology
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and sentiments.
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VSA can be used in any market like forex,
stocks, Indices, commodities, and Futures.
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Many people might argue that in forex Volumes
are useless as it is decentralized market
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having no real volumes.
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However, Forex has Tick Volumes which is proxy
to real volumes and correlates it 90% of the
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time.
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And yes, VSA methodology can also be applied
to any timeframe.
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Wyckoff’s VSA is one of the best methods
to analyze a market because:
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• It is non subjective
• It is not prone to smart money manipulation
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as the method itself is used for detecting
smart money activity.
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• It figures out the underlying reasons
behind the market movements and also understands
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the cause of imbalance between supply and
demand.
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First, let’s see the components of volume
Spread Analysis:
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1.
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Spread: Spread is the difference between Opening
and closing of the price.
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2.
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Volume is the frequency of transaction of
the price change during a specified period
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of time
3.
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Bearish and Bullish Volume: Bearish Volume
is marked in Red and it shows bearish activity.
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Bullish Volume is marked in green and it shows
bullish activity.
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4.
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Above Average High Volume: Above Average High
Volume is the Highest Volume in the current
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session which is higher than the average volume.
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Average Volume is the volume that coincides
with Moving Average 20 of the volume indicator.
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5.
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Ultra-High Volume: Ultra High Volume is the
Highest Volume in the current session.
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It is higher than the previous peak volume.
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There are 4 stages of VSA, based on Wyckoff
theory.
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1) Accumulation: This Occurs when Supply and
Demand are in balance to each other after
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a mark down move.
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2) Mark Up: This occurs when Demand becomes
more than supply causing an upward bullish
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rally after accumulation process
3) Distribution: This occurs when Supply and
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Demand are in balance after an exhausted mark-up
move.
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4) Mark Down: This occurs when Supply becomes
more than Demand causing a downward drop after
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distribution phase.
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Watch this video if you want to know more
details about Wyckoff method.
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There are two major applications of VSA namely
tracking of SOW (Sign of Weakness) and tracking
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of SOS (Sign of Strength).
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SOW Sign of Weakness occurs when the Demand
is exhausted (Buyers Exhausted) after uptrend
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and Supply increases (More Sellers come in).
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This imbalance between supply and demand causes
the market to fall.
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SOS Sign of Strength occurs when Supply is
exhausted (Sellers exhausted) after downtrend
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and Demand increases (More Buyers come in).
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This imbalance between supply and demand causes
the market to rise.
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Now let’s talk about the different types
of Sign of Strength:
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1) Down thrust:
Down thrust is the bullish pin bar or the
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Doji bar having an ultra-high volume or above
average high volume.
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The Spread of the down thrust bar is extremely
low meanwhile the volume is relatively high.
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VSA suggests that if the spread is low then
the volume should also be low.
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In this case there is a divergence between
spread and volume which signifies that there
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is more demand than the supply causing price
to rise in near future.
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2) Selling Climax:
Selling Climax is the high spread bearish
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candle closing well off the lows, having a
noticeable downward rejection wick, projected
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on ultra-high or above average high volume.
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High spread rejection low volume anticipates
that the market will rise because there is
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more demand than supply.
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Selling Climax has a downward wick whose size
is approximately 25%-50% of the candle’s
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body size.
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3) Bearish Effort < Bearish Result:
This is High Spread Bearish Candle whose spread
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is larger than the previous candle’s spread
but its volume is lower than the previous
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candle’s volume.
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VSA suggests that if there has been no effort
made then there should not be any result.
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This disagreement between Price and Volume
increases demand and reduces supply causing
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the market to rise in future.
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An effort (volume) has not been made but there
is a result (Spread).
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4) Bearish Effort > Bearish Result:
This is Low Spread Bearish Candle having spread
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lower than the previous candle’s spread
but its volume is higher than the previous
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candle’s volume.
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In this case there is a disagreement between
volume and price resulting demand to become
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more than the supply and causing price to
rise in near future.
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An effort (volume) has been made but there
is no result (Spread).
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5) No Supply Bar:
This is a low spread bearish candle having
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downward wick whose volume is lower than the
previous two candles’ volumes.
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No Supply bar means that there is lack of
supply and demand is overpowering supply causing
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price to rise in future.
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Please note that No Supply Bar is a continuation
signal not a reversal signal.
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No supply bar is effective only if it is appears
after bullish momentum or appears after Sign
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of Strength in the direction of the trend.
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6) Pseudo down thrust:
Pseudo down thrust is the bullish pin bar
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or doji bar having low spreads whose volume
is lower than the previous two candles’
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volumes.
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This suggests that there is no supply or lack
of supply.
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Lack of supply means that demand will overpower
supply causing price to rise in near future.
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Please also note that Pseudo down thrust is
a continuation signal not a reversal signal.
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Pseudo down thrust is effective only if it
is appears after bullish momentum or appears
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after Sign of Strength in the direction of
the trend.
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7) Pseudo Inverse down thrust:
Pseudo Inverse down thrust is an inverse bullish
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pin bar (or doji bar) having low spreads and
its volume is lower than the previous two
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candles' volumes.
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This suggests that there is no supply or lack
of supply.
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Lack of supply means that Demand will overpower
supply causing price to rise in near future.
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Again, Pseudo inverse down thrust is a continuation
signal not a reversal signal.
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Is effective only if it is appears after bullish
momentum or appears after Sign of Strength
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in the direction of the trend.
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8) Inverse down thrust:
Inverse down thrust is the inverse bullish
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pin bar or doji bar having low spreads and
projected on ultra-high or above average high
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volume.
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VSA suggests that if the spread is low then
the volume should also be low.
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In this case there is a disagreement between
spread and volume which signifies that there
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is more demand than the supply causing price
to rise in near future.
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9) Failed Effort Selling Climax:
Failed Effort Selling Climax is the variation
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of Selling Climax having no downward rejection
wick.
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It has higher spread than the previous candles
and its volume is also higher than the previous
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candle.
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There is a disagreement between Volume and
Price as compared to previous candles.
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However, the next candle is bullish, absorbing
the entire bearish effort.
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Now let’s talk about different Types of
SOW Sign of Weakness:
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1) Up thrust:
Up thrust is the bearish pin bar or doji bar
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having an ultra-high volume or above average
high volume.
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The Spread of the up thrust bar is extremely
low meanwhile the volume is relatively high.
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VSA suggests that if the spread is low then
the volume should also be low.
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In this case there is a disagreement between
spread and volume which signifies that there
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is more supply than demand causing price to
fall in near future.
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2) Buying Climax:
Buying Climax is the high spread bullish candle
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closing well off the highs, having noticeable
upward rejection wick, projected on ultra-high
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or above average high volume.
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High spread rejection low volume anticipates
that the market will decrease soon because
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there is more Supply than Demand.
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Buying Climax has an upward wick representing
25%-50% of the candle’s body size.
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3) Bullish Effort < Bullish Result:
This is a High Spread Bullish Candle whose
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spread is larger than the previous candle’s
spread but its volume is lower than the previous
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candle’s volume.
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VSA suggests that if there has been no effort
made, then there should not be the result
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(Spread).
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This divergence between Price and Volume increases
supply and reduces demand causing the market
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to decrease in future.
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4) Bullish Effort > Bullish Result:
This is a Low Spread Bullish Candle having
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spread lower than the previous candle’s
spread but its volume is higher than the previous
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candle’s volume.
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VSA suggests that if an effort has been made
then there must be a result (spread).
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In this case there is a disagreement between
volume and price resulting Supply to become
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more than Demand and causing price to fall
in near future.
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5) No Demand Bar:
This is a low spread bullish candle having
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upward wick whose volume is lower than the
previous two candles’ volumes.
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No Demand bar means that there is lack of
demand and supply is overpowering demand causing
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price to fall in future.
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Please note that No Demand is a continuation
signal not a reversal signal.
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No Demand is effective only if it is appears
after bearish momentum or appears after SOW
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Sign of Weakness in the direction of the trend.
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6) Pseudo upthrust:
Psuedo upthrust is the bearish pin bar or
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doji bar having low spreads whose volume is
lower than the previous two candles’ volumes.
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This suggests that there is no demand or lack
of demand.
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Lack of demand means that supply will overpower
demand causing price to fall in near future.
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Also, Pseudo up thrust is a continuation signal
and not a reversal signal.
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So, is effective only if it is appears after
bearish momentum or appears after SOW Sign
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of Weakness in the direction of the trend.
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7) Inverse Pseudo Up thrust:
It is the inverse bearish pin bar (doji bar)
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having low spreads.
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Its volume is lower than the previous two
candles' volumes..
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This suggests that there is no demand or lack
of demand.
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Pseudo inverse upthrust is also a continuation
signal and not a reversal signal.
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Pseudo inverse up thrust is effective only
if it is appears after bearish momentum
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8) Inverse Up thrust:
Inverse Up thrust is the inverse bearish pin
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bar (or doji bar) having an ultra-high volume
or above average high volume.
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The Spread of the up thrust bar is extremely
low meanwhile the volume is relatively high.
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VSA suggests that if the spread is low then
the volume should also be low.
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In this case there is a disagreement between
spread and volume which signifies that there
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is more supply than the demand causing price
to fall in near future.
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9) Failed Buying Climax:
Failed Effort Buying Climax is the variation
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of Buying Climax having no upward rejection
wick.
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It has higher spread than the previous candle
and its volume is also higher than the previous
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candle.
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There is a divergence between Price and Spread
of the Failed Buying Climax as compared to
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previous candles.
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However, the next candle is bearish, absorbing
the entire bullish effort.
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I hope you realize that that the Volume Spread
Analysis is a very powerful technique which
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unfolds the true sentiment and order flow
of the market.
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If you enjoyed this type of content and want
more Wyckoff and Volume Spread Analysis videos,
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leave us a like to show your support and to
help us with Youtube algorithm and in future
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videos we’ll go even deeper with more advanced
strategies that can be applied to day trading
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and swing trading.
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Until next time.
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