PRAETIR / Concepts & indicators

Volume Spread Analysis explained

Volume Spread Analysis considers volume, bar range and closing position together. Here, spread means the bar’s high-low range, not the difference between bid and ask.

Record three observations

Record high minus low, actual traded volume and the close’s position within the bar. Compare matching instruments and bar types. A fixed-volume bar is not suited to the same simple volume comparison as a time bar.

High volume with a small range

Consider two synthetic one-minute bars of the same contract. A has a four-point range and 800 contracts of volume. B has a one-point range and 1,600 contracts. B shows more activity with less price progress. That warrants closer investigation of the sequence.

These numbers do not identify individual participants or uniquely determine the next bar’s direction. Add the context before and after B and, where available, actual bid/ask execution data.

Check the baseline and data gaps

A comparison between midday and the opening period may primarily reflect session rhythms. Record the chosen comparison group. Missing data or different contract months can make apparently unusual bars difficult to interpret.

Make the hypothesis testable

Record the visible combination, preceding context and a fixed subsequent observation window. Include cases without the expected reaction. VSA terminology helps describe observations; evaluating your rules requires a complete set of examples.

Synthetic one-minute bars · same contract
BarHigh − LowVolume
A4 points800
B1 point1,600

Sources and methodology

Sources explain concepts or the respective provider’s product descriptions. Worked examples are original and synthetic. Verify current contract specifications before use.

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