Every VSA signal explained: climax, stopping volume, tests, no demand and more

Volume Spread Analysis reads three things on every bar: the volume (how much effort went in), the spread (how far price travelled, high to low) and the close (where in the bar price finished). Put those three together with the background, and the bar tells you whether professionals were buying, selling or simply not interested.

1. VolumeCompare it with the last 20 bars. Above average means professional activity. Below average means they are absent.
2. SpreadA wide bar is a big result. A narrow bar is a small result.
3. CloseNear the high means buyers won the bar. Near the low means sellers won. In the middle means a draw.
4. BackgroundThe same bar means different things after a long fall, after a long rise or in the middle of a range.

A climax is the loudest bar of a move. After a long fall, a selling climax (SC) is a very wide down bar on the biggest volume in the area, often closing off its low. After a long rise, a buying climax (BC) is the mirror image.

In a climax the crowd acts on emotion while professionals take the other side. That is why the climax is usually close to the end of the move, but it is rarely the exact entry. The first low (or high) is very often retested.

• Confirm with: an automatic rally (after SC) or reaction (after BC), then a retest on lower volume.
• Common mistake: buying or selling the climax bar itself. Wait for the test.

Stopping volume (SV) is high volume on a down bar that closes in the middle or top of its range. The fall is being stopped by demand. It does not start a rally; it ends a fall.

A spring (SP) dips below a clear range low, takes the stops there and closes back near the high. An upthrust (UT) pushes above a range high, triggers the buy stops and closes near the low. Both are traps: the breakout traders end up on the wrong side.

Quiet bars matter as much as loud ones. No demand (ND) is a narrow up bar on volume lower than the previous two bars: there are no buyers behind the move. No supply (NS) is a narrow down bar on lower volume: sellers are absent.

RTC only confirms these once a later bar breaks them: no demand needs a close below its low, no supply needs a close above its high. Until then the bar is outlined and listed as Watching.

A test (TS) is a dip into an area of earlier selling on low volume that closes near the high. Professionals are checking whether any supply is left. Low volume means it is gone.

Effort up (EU) is a wide up bar on high volume that closes near its high: real buying. Effort down (ED) is the mirror. Both are confirmed when a later bar closes beyond the effort bar.

Absorption (AB) is the opposite: big volume and a small result. One side is pushing, the other is absorbing every order. RTC waits for the break. A close above the bar high turns it into AU, buyers won. A close below the low turns it into AD, sellers won.

A two-bar reversal up (TU) is a wide bar closing on its low, followed by a bar of similar size closing on its high, both on good volume. Everything the first bar did was undone by the second. A two-bar reversal down (TD) is the mirror.

Signals are strongest in sequences. After a fall: SC or SV, then a quiet TS or NS, then EU breaking out. After a rise: BC or UT, then ND, then ED breaking down. One bar on its own is a clue. A sequence is a story.

• Signs of strength: SC, SV, SP, NS, TS, EU, AU, TU.
• Signs of weakness: BC, UT, ND, ED, AD, TD.
• Undecided: AB and anything still Watching.

In RTC AI each of these has its own colour, shape and code, and its own switch in Layers. Turn on one signal at a time, look back through the chart.