A candle shows you what price did. Volume shows you how much conviction was behind it. Volume Spread Analysis (VSA) studies the relationship between the range of a candle (its spread), its closing position, and its volume — to reveal what professionals are doing behind the moves.
The three questions VSA asks of every bar
- How wide is the spread (the range from high to low)?
- Where did price close within that range?
- How much volume accompanied it?
The answers combine into readable stories. A narrow-spread up-bar on huge volume near resistance? Someone is selling into that strength. A wide down-bar on climactic volume that closes off its lows after a long decline? That is potential stopping volume — professionals absorbing panic.
Signature VSA events worth learning first
Selling climax
After a sustained fall: extreme volume, wide spread, close well off the lows. Weak holders capitulate; strong hands absorb. Many P4 Provider students learn to spot this pattern first — one of our journal's tracked strategies, Selling Climax C1, is built on it.
No demand
A narrow up-bar on falling volume inside a downtrend. The market is drifting up not because buyers are eager, but because sellers are briefly absent. Rallies like these tend to fail.
Upthrust
Price spikes above resistance and closes back below it on high volume — a classic trap that harvests breakout buyers' stops. In SMC language: a liquidity sweep. VSA and Smart Money Concepts are two lenses on the same institutional behaviour, which is why we teach them together.
Making VSA practical
Do not try to label every bar. Focus on the extremes — climactic volume, suspiciously quiet volume — at levels that matter: order blocks, session opens, prior highs and lows. Volume analysis at a random mid-range candle tells you little; at a key level it can tell you who just took control.
Price is what happened. Volume is who made it happen.
Education only — not financial advice.
