Volume Spread Analysis: effort versus result

VSA compares three things on every candle: the spread (high to low), the close (where in the candle it finished) and the volume. Volume is the effort; the spread and close are the result.

When effort and result agree, the move is genuine. When they disagree, something is being absorbed.

• Effort, no result: high volume but a narrow spread. Someone is absorbing the move.
• No demand: a narrow up candle on low volume after a rise. Buyers are not interested.
• Stopping volume: very high volume on a down move that closes off the lows. Selling is being absorbed.
• Upthrust: price pushes above a high and closes back near the low. Often a trap.

Gold has rallied for six candles. The seventh candle has the highest volume of the whole move, yet its body is small and it closes in the middle of its range. Effort is high, result is small.

The next candle tries to go higher on much lower volume and fails: no demand. VSA is telling you that buyers are tiring and someone is selling into the rally.

Do not short on VSA alone. But if this appears at a premium order block, after a sweep of equal highs, it becomes strong confirmation for a sell.

• Reading volume in isolation. Always compare a bar with the bars around it.
• Forgetting that forex volume is tick volume. It shows activity, not exact contracts, but the relative patterns still help.
• Using VSA to pick tops and bottoms. It confirms a zone; it does not replace one.
• Ignoring the close. Where a candle closes inside its range matters as much as its size.

RTC AI finds fifteen classic VSA signals on every bar, from climaxes and stopping volume to no demand, tests and two-bar reversals. Each has its own colour, shape and code, and its own switch in Layers.

The full lesson on every signal goes through each one with a diagram: what it looks like, what it means and how to confirm it.

Use VSA as a filter. Price reaches your order block in discount; now you check: is selling volume drying up? Is there stopping volume? Without that confirmation, a perfect-looking zone is just a guess.