The first annotated bar we see is the Yellow SMART Bar (Stopping Volume) This is typically a strong long entry point (providing the background is showing some signs of strength)
The next VSA (Smart Money) signal we see is the Green SMART Bar (Effort To Rise) This is a weakness point if volume is excessively high. If volume is high but not excessively so you will typically see a continuation upwards.
The next signal we see is the Pink SMART Bar (No Demand) SMART will only paint this bar if it is confirmed so we know a reversal is coming. We do see a nice move down after this as expected.
We see a long period of not much movement (VSA wise likely due to a slow down in Market Participants ie Lunch in Tokyo, Sessions closing, etc.) but we are greeted with some signs of strength in the Blue SMART Bar (Reverse Upthrust) These are excellent reversal points and if Valid (Not Pseudo) You can typically enter long on the following candle. As you can see from the chart this was a fairly safe entry point.
Following this we see a Green SMART Bar (You'll remember a green smart bar is an Effort To Rise Bar) The Volume on this bar was high but not excessively so, so we would expect a continuation in the move upward.
Next we see a Dark Red SMART Bar (Buying Climax) This signal shows excessive buying and usually results in a reversal at least short term if we see an Upthrust or no demand for example following it. The Buying Climax is immediately followed by a Red SMART Bar (Upthrust) This is a validated sign of weakness and a good reversal point. This pattern is reminiscent of the Spinning Rowboat.
Next we see a Coral SMART BAR (Supply Test) The following bar confirms no supply is present and we then get yet another Green Smart Bar (Effort To Rise) We continue on this way for the next few hours but at the top you see a Red SMART Bar (Upthrust) This is a sign of weakness and at least a short term warning the move up may be ending.
Please keep in mind SMART Trader itself is painting these bars which makes these patterns and setups much easier to spot and act on.
Also trade setups are verified via our proprietary background scanners.
For more information or if you have any questions about SMART Trader Volume Spread Analysis (VSA) Software please visit SMART Trader at pipbuilders.com
Good luck trading.
