Volume Spread Analysis (VSA) is a trading methodology that analyzes the relationship between volume and price movements to predict future market behavior. It was developed by Tom Williams, a well-known trader and author.
Volume Spread Analysis (VSA) is a sophisticated technical analysis method that interprets market intent by studying the relationship between three variables: , price spread (candle range), and the closing price . Unlike traditional indicators that lag behind the market, VSA aims to reveal the "footprints" of institutional investors—often called "Smart Money"—to anticipate trend reversals and continuations before they become obvious. The Core Principles of VSA
A narrow spread bar with volume lower than the previous two bars, closing in the lower half or middle. vsa trading strategy pdf
Where the price settled within that candle's range.
The price spikes above a recent resistance level or trading range, making it look like a breakout. Volume Spread Analysis (VSA) is a trading methodology
VSA signals are strongest when aligned with the trend.
Wait for price to aggressively rally toward and breach that resistance level. Look for a candlestick that punches through the level but fails to sustain it—forming an Upthrust (long upper shadow, closing near the bottom of the candle) on ultra-high volume. Unlike traditional indicators that lag behind the market,
outlines that the market moves in a continuous cycle driven by Smart Money: Accumulation
: The range between a bar's high and low, showing the size of the market movement. Closing Price