1. Possible climatic action: Wide spread down bar closin in the middle with ultra high volume, in a zone of previous strenght (look how the market test the support of the channel before this bar). This bar is confirmed by 2, but, it still need a test or another SOS because the volume seen in 2 is too high and of course it contains supply.
2. Stopping volume: A wide spread up bar closin at or near the highs with ultra high volume (the highest volume seen in the chart) after a down bar closing at the middle only indicates one thing: demand overcoming supply. But, like i said, you need confirmation in the next bars to take a long trade.
3. "RARE BAR": A wide spread up bar closing at or near the highs with low volume. I think that this bar indicates demand because the market cannot go up with that wide spread without the professional support. If this bar had a narrow spread, in that case i will name it a No demand bar, but in this case the spread is wide, and we got strenght in the background, so, this is a strenght bar.
4. Absorption bar: A wide spread up bar closing at or near the highs with high volume. This bar take off all of the old highs, but it fails to take the most important, the high seen in the background after a trap up move (where the resistency of the channel is). Also, like we know, a up bar with high-ultra high volume always need to be confirmed, so, we wait.
5. No demand: A narrow spread up bar closing in the middle of the bar with low volume, followed by a down bar closing at or near the lows with average volume, this bar confirms the weakness, also this bar is seen in a zone of resistency (in which the supply is present).
6. Supply coming in: A wide spread up bar closing off the highs with high volume, followed by a down bar closing at the lows with average volume. This bar only makes the supply most powerfull.
7. Supply coming in: A wide spread up bar closing off the highs with high volume, followed by a down bar closing at the lows with average volume. And here we got the first SOW (sign of weakness) lower than the previous 3. So, something is happening, the supply is overcoming the demand.
8. Up-thrust: A average spread down bar closing at the lows with average volume after make a mark-up, followed by a average spread down bar closing at the lows too with high volume. This bar is in the same zone as 7, so, now we got another confirmation of the weakness present in the market. Look how the market did a new target for us before this signal.
9. Supply coming in: A wide spread up bar closing off the highs with high volume, followed by a down bar wide spread closing at the lows with ultra high volume. This is the second bar in the same zone, but in this case, we got too much volume in the confirmation bar, so we need to look out for another SOW to be sure.
10. Up-thrust: My favorite signal in this chart, a average spread down bar closing at the lows with low volume followed by a down bar average spread closing at the lows too with average volume. This bar confirms that there is no strenght at the moment, and the market can keep going down.
This is my analysis of the usdcad 4h chart, i will take a short trade in the 5M-15M timeframe after i see a sow (sign of weakness) like no demand or up-thrust below the pink line and my target will be the next pink line (where the demand hit the market the last time).
This methodology is called VSA.
2. Stopping volume: A wide spread up bar closin at or near the highs with ultra high volume (the highest volume seen in the chart) after a down bar closing at the middle only indicates one thing: demand overcoming supply. But, like i said, you need confirmation in the next bars to take a long trade.
3. "RARE BAR": A wide spread up bar closing at or near the highs with low volume. I think that this bar indicates demand because the market cannot go up with that wide spread without the professional support. If this bar had a narrow spread, in that case i will name it a No demand bar, but in this case the spread is wide, and we got strenght in the background, so, this is a strenght bar.
4. Absorption bar: A wide spread up bar closing at or near the highs with high volume. This bar take off all of the old highs, but it fails to take the most important, the high seen in the background after a trap up move (where the resistency of the channel is). Also, like we know, a up bar with high-ultra high volume always need to be confirmed, so, we wait.
5. No demand: A narrow spread up bar closing in the middle of the bar with low volume, followed by a down bar closing at or near the lows with average volume, this bar confirms the weakness, also this bar is seen in a zone of resistency (in which the supply is present).
6. Supply coming in: A wide spread up bar closing off the highs with high volume, followed by a down bar closing at the lows with average volume. This bar only makes the supply most powerfull.
7. Supply coming in: A wide spread up bar closing off the highs with high volume, followed by a down bar closing at the lows with average volume. And here we got the first SOW (sign of weakness) lower than the previous 3. So, something is happening, the supply is overcoming the demand.
8. Up-thrust: A average spread down bar closing at the lows with average volume after make a mark-up, followed by a average spread down bar closing at the lows too with high volume. This bar is in the same zone as 7, so, now we got another confirmation of the weakness present in the market. Look how the market did a new target for us before this signal.
9. Supply coming in: A wide spread up bar closing off the highs with high volume, followed by a down bar wide spread closing at the lows with ultra high volume. This is the second bar in the same zone, but in this case, we got too much volume in the confirmation bar, so we need to look out for another SOW to be sure.
10. Up-thrust: My favorite signal in this chart, a average spread down bar closing at the lows with low volume followed by a down bar average spread closing at the lows too with average volume. This bar confirms that there is no strenght at the moment, and the market can keep going down.
This is my analysis of the usdcad 4h chart, i will take a short trade in the 5M-15M timeframe after i see a sow (sign of weakness) like no demand or up-thrust below the pink line and my target will be the next pink line (where the demand hit the market the last time).
This methodology is called VSA.