I think VSA is all about context. We can have a bar+vol that looks exactly the same in two situations, but it tells a completely different story because the background is different. I have made a chart to depict my understanding of the matter.
In 1a and 1b the BuyClimax is on higher Vol then the SellClimax. This tells us that we have an overall dominance of supply. The SellCilmax may be the start of a short retrace and thus Re-distribution, or it may be a genuine start of Accumulation. However, if we compare the volume of BuyClimax and SellClimax then the comparison tells us that supply is dominant and the probability of the SellClimax being the start of Re-distribution is higher, and the probability of the SellClimax being the start of Accumulation is lower.
Now let’s compare the areas where 1a and 1b go into testing. In 1a the Vol is rising, this tells us that there is still a lot of supply. In 1b the Vol is falling, this tells us that there is little supply left. However, since we determined that in a larger context supply is still dominant, we should be cautious in looking for long trades. Our expectation is that even if we get a rally, it will not get very far.
Furthermore, let us consider the possibility that we do indeed have a Re-distribution going on, in that case the low Vol in the test area is consistent with Re-Distribution, because it shows that there is no demand to work against lower prices.
2a and 2b show a completely different picture, because here demand is dominant. In 2a the market isn’t ready yet, the test is on too high Vol. In 2b we have strong demand in the background and very little supply left in the test area.
Of course first the test needs confirmation in the form of a reaction. And then we will be looking for a long entry around the resistance area when a NoSupply bar shows up which will tell us that there is no supply left to resist higher price to break out of resistance.
So, in a nutshell, before we can go long we need to have had successful low Vol test of the support area. But we also want to see the correct background where demand shows a dominance over supply. And if demand enters the picture on relatively low Vol, then we don’t have a dominance of demand.
Friends, if I have made a mistake in my interpretation, please correct me.