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Volume Spread Analysis (VSA) is a method that studies the relationship between volume, price spread (high–low), and closing price to infer the activity of professional traders (smart money). VSA aims to detect supply and demand imbalances, points of accumulation/distribution, and likely directional bias.
These operators possess capital large enough to move prices in order to fill their substantial orders. Because their order sizes are too large to execute without significantly moving the price against themselves, they must engineer price movements to induce the public to buy when they wish to sell (distribution) or sell when they wish to buy (accumulation).
: Smart Money buys an asset at "wholesale" prices from "Weak Holders" (uninformed retail traders). This typically occurs after a bear move and is characterized by low spreads and high volume as supply is absorbed.
Elias felt a cold prickle on his neck. He looked at the chart again.
Volume Spread Analysis (VSA) is a method that studies the relationship between volume, price spread (high–low), and closing price to infer the activity of professional traders (smart money). VSA aims to detect supply and demand imbalances, points of accumulation/distribution, and likely directional bias.
These operators possess capital large enough to move prices in order to fill their substantial orders. Because their order sizes are too large to execute without significantly moving the price against themselves, they must engineer price movements to induce the public to buy when they wish to sell (distribution) or sell when they wish to buy (accumulation).
: Smart Money buys an asset at "wholesale" prices from "Weak Holders" (uninformed retail traders). This typically occurs after a bear move and is characterized by low spreads and high volume as supply is absorbed.
Elias felt a cold prickle on his neck. He looked at the chart again.
