Measure buying-selling force in the Supply - Demand area

The concept of supply-demand is talked about a lot in the school of VSA analysis. Here I am not writing about VSA because VSA is so vast.

Why do you have to "Test" in supply and demand areas? Because after accumulating enough "stock", for example, having gathered enough, the big boys need to check whether the sellers still have or not, because if there are too many, it will be difficult for them to push up the price. That's why this is the case when it comes to market testing. We need to recognize this act of testing, also to know the results if the sellers are not, if the market has only buying power of big boys then there is no reason not to follow them. That is the strategy.

The test is considered to be successful when the price no longer falls in the demand zone but starts to show signs of increase, accompanied by a weaker volume.

The test is considered unsuccessful as the price continues to fall and it is likely to penetrate the demand zone, the associated volume not only not decreasing but increasing.

What about the Test of Supply area?

Likewise, after having gathered enough short to sell goods, the big boys, before kicking down, will test if there are still buyers big enough to stop them. If they rush to sell off to kick the price down and encounter a significant number of buyers, they will suffer very heavy losses. You know, big boys rarely do anything risky.

The rule of testing the Supply area is exactly the same as testing the Demand area. A test is considered successful when the price reaches the Supply zone but does not increase any more, especially when the volume is markedly lower. Conversely, if the price still penetrates the Supply zone with normal or large volume, the test is considered a failure. The number of buyers is still very large and of course, it is not foolish to do a Short Sell.


The top - the bottom of a trend is the end of the previous trend, which is also the beginning of the upcoming trend. Knowing the bottom is always the dream of every trader.

As traders always find methods to define these two concepts, there is a way in volume analysis to help you do that.

Of course, like any other method, volume-based analysis cannot guarantee 100% correct peaks, all of which are relative. Based on volume and candlestick positions, traders can find clues, which makes reasonable inferences to predict the top of the market bottom, not the way for you to enter the order. To enter orders, you need to have other techniques.

Here is how you can determine top-bottom based on volume analysis.

The above example is not really a peak, it is just a correcting wave in an uptrend, but it can also be considered a short-term peak. As you can see, the volume at the top after a bullish wave tends to be lower.

This means that the bulls are currently very weak and in balance with the sellers. Subsequent price action looks very fuzzy, price is sideways, fails to break through, volume accompanying is extremely low. The price cannot be reduced immediately. If we want the price to reverse, we need a pinbar candlestick to confirm the presence of the sellers. That is when the peak formed.

This example is clearer. You see, the previous downtrend was very sustainable because the volume increased steadily with the decrease in price. But after the appearance of two long-tailed candles (pin bars) the volume gradually decreased, accompanied by bullish candles.

This is followed by a test (using the lessons above) in the demand area. Apparently, this test was successful, the price did not decrease across the demand zone. The volume at the test candle is also very low. This proves that the sellers have very little presence, not enough to kick the price down.