Volume Spread Analysis Signals for Reading Price and Volume

Summary

The document describes a Volume Spread Analysis indicator that marks possible supply-demand shifts by comparing candle direction, range, closing location, and volume with recent averages. Its labels include no demand, no supply, stopping volume, supply tests, upthrusts, reverse upthrusts, and effort to move up or down. The accompanying explanations interpret low-volume advances as weak demand and high-volume declines followed by strong buying as possible absorption of selling. Wide or narrow ranges and unusually high or low volume also help define the coded signals.

The evidence presented is a set of indicator conditions and interpretive descriptions, not a measured trading study. Several explanations are qualitative claims about professional market activity, and the included implementation is lengthy and contains conditions whose exact behavior may depend on platform semantics and indexing. Signals should therefore be treated as hypotheses about price-volume behavior rather than proof of institutional buying or selling. The text gives no asset class, validation results, risk rules, or complete method for entering and managing trades.

Key ideas

• The indicator classifies bars using price direction, spread, closing position, and volume relative to recent averages.
• Low-volume advances are interpreted as possible lack of demand, while certain high-volume declines may indicate selling absorption.
• Named patterns include stopping volume, supply tests, upthrusts, and effort signals.
• The document provides indicator conditions and interpretations but no backtest or evidence of profitability.
• The signal labels do not independently prove that professional traders are buying or selling.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.