Another example would be what Bill Williams calls a squat. Basically a squat is a bar with a
narrow range and higher volume. VSA teaches us to pay attention to a narrow range bar that
has higher volume (especially) if it is ultra high and closes in the middle. Essentially, this is
just a more specifically defined squat bar.
Soultrader: "I have a litte trouble understanding volume demand bars after a selloff. I have
attached a chart from yesterdays action. The rectangle box shows couple sell volume spikes.
My questions is this: How do you watch for demand bars after that spike? In the first
rectangle the volume spike is created by a doji. The next price bar closes above the high of the
doji... this occurs on lower volume. How do you interpret this? To me it seems like supply is
cut off but price continues to drop.
The same thing occurs in the second rectangle box. Volume spike is created on a down bar
but the next bar closes above the low of the previous bar.
Any advice would be appreciated.