Volume Spread Analysis Abcs Of Vsa May 2026
"ABCs of VSA" refers to the foundational principles of Volume Spread Analysis (VSA)
By analyzing these three components, VSA identifies imbalances between supply and demand. It was popularized by Tom Williams, who built upon the foundational tape-reading principles of Richard Wyckoff. The Three Pillars of VSA volume spread analysis abcs of vsa
Supply vs. Demand: Prices rise when demand exceeds supply and fall when supply dominates. "ABCs of VSA" refers to the foundational principles
A. Absorption
Part A: The Three Pillars of VSA (The Core ABCs)
The acronym "VSA" itself contains the entire methodology. Every single bar (candlestick or daily bar) on your chart tells a story through three interconnected elements: Narrow Spreads on High Volume: If the market
- Narrow Spreads on High Volume: If the market is rallying, but the bars are narrow despite high volume, the Smart Money is selling into the rally (absorbing the demand). This is a major warning sign.
- Buying Climax: A rapid rise with extremely high volume and a wide spread, followed by a poor close. This indicates "panic buying" by the public, which professionals are selling into.
: Professionals sell their holdings to retail traders at high "retail" prices.