Table of Contents
An introduction to Volume Price Analysis and how it all began for me. I was one of the lucky traders who started my own trading journey using volume. It has been the cornerstone of my success and I want it to be yours also. This is why I wrote this book. To help you, achieve your own personal ambitions through trading. Volume Price Analysis is the ONLY way to reveal the secrets of the market and in doing so, follow the ‘smart money’.
If you thought that Volume Price Analysis was a new concept. Think again. This was the approach used by the iconic traders of the past, such as Charles Dow, Jesse Livermore, and Richard Wyckoff. These traders built huge fortunes applying this approach, using nothing more than the ticker tape, pencil and paper. Here I explain how they achieved their success, and how little the concepts have changed in over a 100 years.
Not an unreasonable question. In this chapter I explain why volume is the ONLY leading indicator, which when combined with price, truly reveals the future direction of the market. In addition, volume reveals something EQUALLY important. Whether the price action is valid or false.
The second component which then creates the explosive combination, of VPA. Price on its own simply reveals the buying and the selling. What it never reveals is the extent of any future price move, and more importantly whether that price move is a fake one.
Here I introduce the basic building blocks of Volume Price Analysis. In simple terms we are essentially looking for one of two things in our analysis. Either a confirmation that volume and price are in agreement, or an anomaly, where volume and price do NOT agree. This is then our first warning signal of a possible change.
In this chapter I explain the concepts of accumulation and distribution which underpin Volume Price Analysis. These occur in all time frames and in all markets and are rounded off with the 'firework display' which is the selling or buying climax. This marks the end of the campaign and the start of a new trend. All we have to do is follow the insiders, and buy and sell when they are buying and selling. In this chapter you will discover how to see this for yourself in any market.
Here we start to build on the concepts from the previous chapter and begin to look at VPA in action using the three most powerful candles. In addition I explain stopping volume and topping out volume, as we start to build our VPA knowledge into a complete approach to market analysis.
Support and resistance is one of the cornerstones of technical trading. Yet when combined with volume, this essential technique becomes even more powerful. Few traders ever discover how to identify when the markets are moving into a congestion phase, or equally important to validate when they are breaking out. In this chapter you will discover both.
Forget traditional trends and trend lines. By the time these are developed you are just getting in when the smart money is getting out. In this chapter you will learn how to create dynamic trend lines, which when coupled with VPA get you in at the start of the trend, and NOT at the end. If you have ever struggled with the concept of traditional trend theory this is for you and will revolutionize your trading.
Volume Price Analysis or VPA is one thing. Volume at price of VAP is something entirely different, and which gives you a visual and instant picture of the density of volumes at price levels on the chart. This is so powerful it’s amazing more traders don’t use this approach. After all, a breakout from one of these regions means one thing - a new trend. And when confirmed with VPA - potential profit. Also here we consider an extension to VPA based on market profile and what we call the Volume Point of Control.
In this chapter we examine some ‘worked’ examples across various markets in detail. See VPA applied to stocks in the cash markets, currencies in the spot FX market, indices in the futures markets and commodities using tick charts. In fact virtually every market and type of chart from tick to time based charts, all detailed and annotated for you. If you still need to be convinced of the power of VPA I hope this chapter will do it for you.
Now it’s time to pull all the elements together. In addition I explain some of the most powerful congestion patterns which have worked consistently over 20 years of trading, and when combined with volume, give us simple and clear trading opportunities, provided you can be patient.
In the final chapter I introduce some of the latest developments in Volume Price Analysis, and where this methodology may go in the future. Charles Dow and the other iconic traders of the past would love these extensions of their original work.
Here you will find details of all my other books and all are available on Amazon. These include several with worked examples in Volume Price Analysis for stocks, forex and cryptocurrencies. Finally I thank those people who made this book possible.