DislikedA squat is a narrow range (narrower than the previous ) bar on increasing volume (more volume than the previous interval).
As VSA trained traders, we know that the more volume the better, but the basic definition just states that the volume be increasing. In fact, the End Of a Rising Market is a squat where the volume is Ultra High and into new fresh ground......Ignored
so unless we do a bar-by-bar analysis, we would not likely have spot the squat there,... these kind of squat are difficult to spot when the vol is not UH / significant.
When you mentioned "previous interval", do you mean the bar that appears just before the squat?
or do you mean its vol and range can even be compared to bars which appeared a few bars back?
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I have a chart taken from the EU 2010 history.
I have some views on the bars pls advise if i am right or no on the following...
I am thinking:
Bar A - is a trigger bar
The 2nd and 3rd bar after Bar A are both NDs, but we dun short this coz we are waiting for further weakness to appear
Bar B - is the potential weakness we are waiting for. It is a squat bar,
Its spread: although does not seem lesser than its previous bar, is still lesser than trigger bar A
Its vol: is higher than the trigger bar A
Its close: although did not close low in the range, it still closed lower than close of trigger bar A. Hence, may need further confirmation to short
Bar C- is a ND. it's the confirmation we are waiting for, short this bar on break of low.
Bar D - is a trigger bar
Bar E - is a squat.
Its spread: is narrower than its previous 2 bars, which includes trigger bar D
Its vol: although not higher than trigger bar D, is still higher than its previous bar
Its close: is high in the range and higher than the close of trigger bar D. Hence, chance to long on break of high
pls give your comments, thanks!