In VSA, signs that professional money is distributing (selling) into strength, preparing for a decline.
Deep Dive
Weakness in VSA refers to signs that professional traders are selling (distributing) their positions despite rising prices or apparent strength. This creates a divergence between what price is doing (going up) and what smart money is doing (selling).
Signs of weakness include: up bars on high volume closing in the middle or low (supply overwhelming demand), No Demand bars (up moves on low volume), and price failing to make progress despite effort. These signals suggest that distribution is occurring behind the scenes.
Weakness often appears during uptrends before major reversals. While retail traders see rising prices and buy more, professionals are quietly selling into that demand. Eventually, demand exhausts and the distribution phase ends with markup down.
Why It Matters
Identifying weakness early allows traders to exit longs or prepare short positions.
Related Terms
- Distribution — A phase where institutional investors gradually sell an asset before a significant price decline
- Upthrust — A false breakout above resistance designed to trap buyers before a reversal lower
- No Demand — Low volume up bar indicating lack of buying interest.