Volume control Bars --- have BOTH Range and Dis-proportionally high volume. 5+ x Average volume
Volume absorption Bars --- have Dis-proportionally high volume but little range. 5+ x Average volume
Continuation Volume Bars --- have average volume and average range. .5-3 X average volume moving in the one direction.
Spot Volume Bars --- have well below Average volume and below to average range the most powerful of these follow V/A or V/C bars
Flat Bars --- Have average volume and range and are not indicative of anything in range and volume.
Found in consolidations
Note ---- GAPS
The width of the gap and the range of the bar should be added together to form any support or resistance ZONE.
I personally like a stock to have an average liquidity of $300,000 over 10 days.
Combined with Volume
ALL bars have a story. Many of these bars have been given various names by practitioners,in particular exponents of
VSA. I have found all fit into the types of bars above.
http://www.tradeguider.com/mtm_251058.pdf
Read the above link for individual Bar interpretation,they are worth knowing.
Below is a chart showing examples of how I would be reading this chart with regard to Range and Price.
Clearly not every bar is marked.
This should give people a
" Feel " for the price action in this chart.
If you find yourself trying to read a chart which doesn't give you a clear feel for its Price action and Volume---leave it and move to another. There are plenty which tell clear stories.
Finally all price and Volume analysis is an
INDICATION of what is happening with the stocks participants and supply and demand. Every indication has to be Proven or Discredited.
This is where everything else that we will look at comes into play.