In this short video we add the volatility indicator which helps to confirm the VPA signal of a lack of participation, with the wide spread up candle on average volume. Volatility is asociated with the insiders and market makers and what often occurs here is the market jumps on volatility with the price action then reversing inside the spread of the candle and often reversing, leaving traders trapped in weak positions. The volatiltiy indicator helps to confirm this and is triggered when price action moves outside the average true range in that timeframe and pair. It’s a classic trap and one which the volatility indicator helps to highlight giving an early warning of a possible trap being set.

Back to: VPA Chart Examples