EASY Volume Spread Analisis
To immediately send a thought in the right direction, let’s recall some theory. Unfortunately, many new traders understand VSA as a simple histogram analysis of the volume, which is not quite true. Of course, it is an important part of this method, but the candle’s spread plays no less important role here.
In this case, spread refers not to the difference between the ask and bid prices, but to the range of candle from High to Low. When reading analytics at specialized forums, you can very often find phrases like a "short candle – a false alarm", or "the price is too smeared, it is reasonable not to open a deal". These are not subjective opinions, but the conclusions based on VSA.
- This indicator is simplified.
- The white color indicate the power of the buyers and we should go shopping.
- The Red color indicate strong selling and this can be seen at the start or end of a major trend.
- The gray color is omitted from this analysis.
- This indicator is great for showing where accumulation and distribution is.