Forex Trading Using

Volume Price Analysis

Over 100 worked examples

from the forex market

By

Anna Coulling

www.annacoulling.com

www.quantumtrading.com

www.quantumtradingeducation.com

© 2017 Anna Coulling - All rights reserved

All rights reserved. No part of this book may be reproduced or transmitted in any
form, or by any means, electronic or mechanical, including photocopying, recording,
or any information storage and retrieval system, without prior permission of the
Author. Your support of Author’s rights is appreciated.

Disclaimer
Futures, stocks, and spot currency trading have large potential rewards, but also
large potential risk. You must be aware of the risks and be willing to accept them in
order to trade in the futures, stocks, and forex markets. Never trade with money you
can't afford to lose. This publication is neither a solicitation nor an offer to Buy/Sell fu-
tures, stocks or forex. The information is for educational purposes only. No represen-

1
tation is being made that any account will or is likely to achieve profits or losses simi-
lar to those discussed in this publication. Past performance of indicators or methodol-
ogy are not necessarily indicative of future results. The advice and strategies con-
tained in this publication may not be suitable for your situation. You should consult
with a professional, where appropriate. The author shall not be liable for any loss of
profit, or any other commercial damages including, but not limited to special, inciden-
tal, consequential, or other damages.

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HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD,
SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE
TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-
OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS,
SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL
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FIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAN ANY ACCOUNT
WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

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 Table of Contents
Foreword
A foreword to the book by Anna Coulling

Introduction to volume price analysis

A brief overview and introduction to the broad concepts of vol-
ume price analysis.

Section One - Daily charts

In this first section of the book we start with the daily timeframe
for spot currency pairs.

All of these use the NinjaTrader platform, and regardless of

whether you are in intraday trader or a longer term swing or
trend trader, the daily chart is an excellent one for context
based on the previous day’s price action and volume. Compar-
ing volume is more straightforward here as we have no session
crossover issues to address, and so we are always comparing
like with like. However, we do have to remember the seasonal
aspect of volume, and take account of any public holidays,
which will always be reflected in the associated volume.

3
Section Two - Hourly charts
In the second section of the book we move to consider the
hourly timeframe. We stay with the spot market, but have
changed platforms to MT4. Here we are now dealing with the is-
sue of the session crossover and so must always consider com-
paring volume with like volume in the associated session. In
other words, London with London and not London with the Far
East and Asia session. Volumes do vary dramatically from one
session to another, and here I explain how to consider the
hourly chart and once again to compare like with like across the
sessions.

Section Three - 15 minute charts

In this section we stay with the MT4 platform and spot forex ex-
amples for the 15 minute timeframe. But again we do still have
to be careful when moving from one session to another, from
the Far East and Asia, to London and then into the US. At each
stage we have to pause the wait for the candles and volume to
build. That said, we can also compare these over a longer pe-
riod on the chart, and so compare a new session with a previ-
ous session from the day before.

4
Section Four - 5 minute charts
In this section we stay with the MT4 platform and spot forex ex-
amples for the 5 minute timeframe. Again we have to be careful
here in the crossover from one session to another, from the Far
East and Asia, to London and then into the US. At each stage
we have to pause the wait for the candles and volume to build.
That said, we can also compare these over a longer period on
the chart, and so compare a new session with a previous ses-
sion from the day before.

Section Five - 4 hour charts

In this section we move back to the slower timeframe of the
four hour chart, and again the MT4 platform. This can be a
tricky timeframe, as once more we have to make sure we com-
pare like with like in terms of volume across the various ses-
sions, but in some ways this is easier here, as we have several
sessions on one chart.

Section Six - Currency futures

In the final section we move to a different instrument and plat-
form and consider examples from the world of currency futures,
by using the NinjaTrader platform once more. Here we are con-
sidering volume from the aspect of the big operators. But vol-

5
ume is volume, and as you will see from these examples across
various timeframes, is equally powerful for a very different instru-
ment. Volume here is the ‘true’ volume of futures contracts
traded through the central exchange, but if you compare this
with the proxy volume of the spot forex world, you will be sur-
prised at how closely the two correlate.

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 Foreword
By Anna Coulling
Welcome to this book on examples of volume price analysis for
forex trading, which I hope you enjoy reading and find useful, ei-
ther to underpin your existing knowledge of this approach, or
perhaps to introduce it to you as a new concept and
methodology. 

What I have tried to do in this book is to illustrate as many of

the volume price analysis or ‘VPA’ concepts as possible using
examples from both the spot forex and currency futures market,
over a wide variety of timeframes, from the longer term charts
to shorter intra day examples. I decided from the outset not to
add any indicators or notations to the charts, but focus purely
on the relationship between volume and price. But as you may
already know from my other books, volume price analysis also
embraces support and resistance, candles and candle patterns.
However, I felt in creating this book of examples, I wanted to fo-
cus on the first principles of the volume price relationship itself,
and to explain each example with simple and clear annotations.

7
In addition, I also wanted to demonstrate how this approach ap-
plies equally, whether you are a longer term swing or trend
trader, a scalping trader intraday or even an investor in curren-
cies for the longer term.

Each page has one chart with a description of the key points be-
low, and whilst most are taken from the spot forex market, I
have also included some examples at the end of the book for
currency futures.

The charts are grouped by timeframe, but as I'm sure you ap-
preciate, the concepts of volume price analysis apply in any mar-
ket and in any timeframe. So whilst a weekly chart may have an
example of a test or accumulation and distribution, the same
principle will apply equally to a five minute or hourly chart for ei-
ther spot of future.

I hope you enjoy studying the examples, and if this is a new and
fresh approach to trading you might find my first book, A Com-
plete Guide To Volume Price Analysis, helpful in explaining all
the concepts and ideas from first principles, which will then help
to give you a deeper understanding of the examples covered
here.

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Please note I use the terms market makers, insiders, big opera-
tors freely throughout the book. Where I use the term insiders it
simply means just that - either market makers or big operators.
In other words,  those groups on the inside who manage and
manipulate the markets.

Remember too that all the examples here are based on a single
timeframe chart, and I would suggest you also apply a multiple
time based approach to view the price action and volume analy-
sis across the time horizon.

In addition I’ve also included the key indices that play an impor-
tant part in any analysis, such as the dollar index, the yen index
and the euro index, which then provide a view of the currency
against a basket of others.

Relational analysis also plays a part in forex, with volume price

analysis in related markets helping to provide a three dimen-
sional view.

And I cannot stress too strongly that in order to become profi-

cient in using the volume price analysis methodology takes prac-
tice, time and effort, and suggest you use a fast chart for prac-
tice, such as a five or fifteen minute chart, in any market, as this
will allow you to study and learn in real time. The lessons of vol-

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ume price analysis are universal and apply to all markets, which
is why I have included them all here - to simply make this point.
And if you have read any of the public reviews on Amazon, then
you will be able to see for yourself how this approach has
changed the lives of many traders and investors, who were
struggling, perhaps not moving forward, but have now revolu-
tionized their trading and investing having read my first book.
And perhaps more importantly many of these traders and inves-
tors simply integrated this methodology into their existing ap-
proach, which has resulted in helping them see the markets
clearly from the perspective of the insiders, so increasing their
confidence and chart reading.

I hope you too will join these traders yourself, and regardless of
whether you are a newcomer to investing and trading, or you
are a more seasoned professional with years of experience, vol-
ume price analysis has something for everyone.

Wishing you every success and good fortune in your own trad-
ing journey, and I hope volume price analysis will form the cor-
nerstone of your own trading methodology now and in the fu-
ture.

Thanks again and best wishes - Anna Coulling

10
 Introduction to volume price
analysis
For many traders and investors, price and the price chart itself
are the beginning and the end of technical analysis, and this per-
haps best describes those traders who classify themselves as
price action traders. All they consider is the price and nothing
else. However, for myself, and many others, this approach com-
pletely ignores the extension of price to its logical association
with volume, which together then reveals the truth behind the
raw data of price. 

The explanation generally given is that technical analysis is

based on the underlying philosophy that all market sentiment is
contained within a simple price chart. That a price chart encap-
sulates the views of every market participant at a given moment
in time. Moreover, that technical analysis is simply price analy-
sis, and that traders can forecast the future direction of price by
analysing and studying where it has been in the past. 

And whilst this is undoubtedly true, what it fails to account for is

the market manipulation that occurs in all markets and all time-

11
frames. And in order to see inside the market, and what the in-
siders and market makers are doing, we have one tool at our
disposal which reveals their activity instantly, and that tool is vol-
ume. Volume is the catalyst which when combined with price,
provides the foundation stone that is volume price analysis.

But if you think volume price analysis is a new approach, think

again. 

This approach was first developed by the founding father of

technical analysis, Charles Dow, more than a century ago, and
then further developed by one of the greatest traders of all time,
Richard Wyckoff. Iconic traders such as Jesse Livermore and
Richard Ney also used the same approach, and all had one
thing in common. They used the ticker tape, reading the prices
and associated volumes to interpret and anticipate future direc-
tion through the prism of volume and price. 

And indeed as Richard Wyckoff wrote in the introduction to his

own course in the 1930s ‘ you draw from the tape or from your
charts, the comparatively few facts which you require for your
purpose.' These facts are…the price movement, the intensity of
trading, the relationships between price movement and volume,

12
and the time required for all the movements to run their respec-
tive courses.  

The concept of this technical approach to trading is very simple.

It is based on the idea that every market is manipulated, and in
accepting this fact, we can then conclude the market makers,
the insiders and the big operators know where they are taking
the market next. If so, then all we need to do to succeed as trad-
ers it to follow them. In other words, to buy when they buy, to
sell when they sell, and to stay out when they are not participat-
ing. These are the simple concepts of this approach to technical
analysis, and their participation or lack of participation is all re-
vealed through the prism of price and volume, and what we call
volume price analysis.

If you are already familiar with these concepts and ideas which I
explain fully in ‘A Complete Guide To Volume Price Analysis’
then the worked examples here will provide further insights and
explanations which expand on the basic concepts. However, if
these are new to you, and perhaps you have been trading the
forex markets for some time, but have not applied these ideas
before, let me try to provide a brief overview of the terminology
and concepts of this methodology.

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And the first idea is very simple in that embracing volume price
analysis, we are also embracing the concept that every major
market is managed by those on the inside. But before we move
on, let me address one issue immediately which is the criticism
leveled at using volume in the world of spot forex.

We all know there is no currently central exchange in the spot

market, and as such we therefore have to turn to an alternative
measure of volume, which is tick activity, and is a proxy for vol-
ume. My own view, and proven over many years, is that this vol-
ume works perfectly well, and in exactly the same way as in
other markets. After all, volume is simply a measure of activity
or a lack of activity, and if activity is very high or very low, then
this signals participation or a lack of participation by the institu-
tional market makers. There have also been many studies over
the years which have compared tick activity with the true fu-
tures volumes, and the conclusion in every case is that proxy
volume is an excellent measure and barometer of ‘true’ volume.

For the spot forex market the insiders here are the institutional
market makers, who create the price spreads, and just like the
market makers in the world of stocks, can see both sides of the
market, and the balance of supply and demand. The analogy I
always use is to think of them as wholesalers with a warehouse

14
of stock which is constantly being refilled and then emptied be-
fore being restocked once again. The sole purpose of the mar-
ket maker is to make money from themselves, and as they sit in
the privileged position of seeing both sides of the market, this is
relatively simple to achieve. After all, as they see both sides of
the buy and sell equation, if they themselves are short of stock
and wish to replenish their warehouse, all that’s required is to
create a panic move in the market, which then shakes investors
out of strong positions with the market makers then gratefully
stepping in to buy. And the mechanism they use to great effect
is the constant stream of news that drives sentiment 24 hours a
day.

And whilst the institutional market makers can hide in relatively

obscurity at the centre of the market, there is one activity they
cannot hide, and that is volume. As the institutional market mak-
ers are by nature large in size, their participation, or lack of par-
ticipation is also very clear, as price moves on large volume sig-
nal the market makers are joining the move. Conversely large
moves on low volume signal a trap, with the market makers sim-
ply moving the price, but with no participation themselves. Their
involvement or lack of involvement is clearly signaled through
the analysis of one indicator, which is volume, and when com-

15
bined with an understanding of price, we can then interpret pre-
cisely what the market makers are doing and why. And in doing
so, we have a clear picture of where the market is heading next.

This methodology was codified by Richard Wyckoff in his three

laws. The third law of effort and result, the second law of cause
and effect, and the first law of supply and demand.

In the third law, this states that effort and result must be in
agreement. In other words the volume which is the effort, must
be in agreement with the outcome of the price move, or the re-
sult. If there is high volume, then we should expect to see a sig-
nificant move in the price which matches the effort. If not, then
this is an anomaly, and is sending a signal that something is
wrong. From this anomaly in price and volume we can then inter-
pret whether the market makers are buying or selling at this
point.

Wyckoff’s second law then introduces the concept of time and

enshrined in the law of cause and effect. Here the law states
that if the cause is large then the effect should also be large if
the two are in agreement. In other words, if the time taken to
build the next phase of a campaign by the market makers is
large, then we should expect to see this reflected in an ex-

16
tended move in the price action as a result. You can think of this
as the effect of winding the spring of a clockwork toy. The more
the spring is wound, the greater the energy is stored, and the
greater the distance the toy will travel, once it is released. This
is the basic principle of cause and effect.

Finally we come to Wyckoff’s first law of supply and demand,

which states simply that when supply outweighs demand, then
prices will fall, and when demand outweighs supply, the prices
will rise.

These three laws then combine to explain and describe the con-
stant journey of price, which moves in an endless journey from
bearish to bullish and back again in all timeframes. This journey
is self similar, and follows the same pattern, whether on a 1 min-
ute chart or a 1 month chart, and a complete cycle is defined as
moving from the selling climax to the buying climax and back
again. But in volume price analysis we always view volume and
price from the market makers perspective, in other words from
the inside out. So when we talk of a selling climax, this is when
the market makers are selling at the top of a rally higher, and
equally a buying climax occurs at the bottom of a move lower.
This is the opposite to what traders and investors understand,

17
and is the reason most traders sell at the buying climax and buy
at a selling climax.

In the selling climax, the market or stock has been rising very
strongly, and those nervous investors and traders can wait no
longer. Their fear of missing out is rising constantly, and finally
they are drawn in to buy at the top, just at the point the market
makers are selling into an increasingly weak market. The cli-
matic price action is then created using volatility and news,
which allows the market makers to clear their warehouses in
preparation for the next phase of the campaign which will be to
move the price lower in due course, but only when they are
ready. The emotion that is used here to trigger buying by the
weak hands, is the fear of missing out, or FOMO. This is a pow-
erful emotion, and one the market makers and insiders use to
great effect.

The buying climax occurs when the market makers wish to re-
stock their empty warehouse, and here the trigger is fear of a
loss. The market is moved fast into a price waterfall, generally
on news, with traders and investors then selling in panic, with
the market makers then stepping in to buy, and stop the stock
or market falling further. Again the climax will be characterised
by volatile price action and spikes in volume. Once the buying

18
climax is complete and the warehouses are full once more, the
next phase of price action begins.

This is also the reason markets fall far more quickly than they
rise. The market makers can take their time in the move higher
to maximise their profits, and to take these slowly. But in the
move lower, they are in a hurry to fill the warehouse and repeat
the process, and you can think of this as an old fashioned game
of snakes and ladders. Up the ladders slowly, and down the
snakes very quickly.

I use the word campaign in many of these examples, as this is

precisely how it is planned by the market makers. In other
words, just like a military campaign with nothing left to chance.
After all, the worst thing that can happen, once a campaign is
underway, is for it to be overwhelmed with increased selling or
buying, and so bringing the development of the new trend to an
abrupt halt. And this is where the test becomes all important.

Once an extended phase of accumulation has come to an end,

and before the campaign begins, the market makers and insid-
ers will test in order to ensure all the selling pressure has been
absorbed. This ensures the bullish trend can develop slowly and
smoothly, with no chance of any lingering sellers then driving

19
the market lower. The test is executed with a move to the down-
side and close near the open, and is confirmed if volume is low.
What we call a test of supply, and if it is a successful test on low
volume, then the campaign can be launched.

Equally at the end of a distribution phase, and prior to develop-

ment of the bearish trend, a test of demand is executed. Here
the market makers push the price higher, and if there is little or
no demand, then the price closes back near the open on low
volume. This confirms the test has been successful and the
campaign can begin.

Moving on, if the primary principle for accepting volume price

analysis as a valid methodology is that all markets are managed
and manipulated from the inside out, the second principle then
follows, in that all we are looking to achieve is to identify when
the market makers are buying or selling, or simply not participat-
ing in any move. And this is done very simply by considering the
price action and volume both individually and also over time,
and by considering whether the two are in agreement or dis-
agreement. If price and volume are in agreement, then all is well
and the market makers are driving the move and participating. If
not, then we have disagreement, and from which we can then
draw some logical conclusions as to whether they are buying or

20
selling, and if so to what extent, and based on the preceding
price action.

And one of the most important areas on the price chart is where
a market is in congestion. Markets spend 70% to 80% of their
time in such regions, and the remainder of the time trending.
The reason for this is very simple. Congestion zones are the ar-
eas where trends are born, and where the market makers and in-
siders are preparing for the next stage of a campaign. They may
be major areas, such as the selling or buying climax, or they
may be minor where a market has paused in the primary trend,
and developed into a second trend reversal before returning to
the primary trend.

Understanding congestion phases, as well as support and resis-

tance is a key aspect of volume price analysis, and one which
many traders do not understand or simply ignore in the con-
stant search for a trend. Indeed, breakout trading is often con-
demned as futile and risky by those traders and investors who
have not embraced volume as part of their approach. When any
breakout occurs, volume will confirm whether the move is genu-
ine or false. It is very clear and very simple.

21
Traditional support and resistance based on price is a core con-
cept of volume price analysis, and in my own trading and invest-
ing, I also incorporate volume using the volume point of control
which displays volume on the price axis of the chart, and so de-
scribes the volume histogram at the various price regions and
price levels. This is based on the concepts of market profile
where ‘fair value’ occurs at the highest concentration of volume
on the chart, and which also introduces the concept of time to
the volume, price relationship. In other words, the longer a cur-
rency pair remains at a price level, then the greater the concen-
tration of volume, and price will only continue to move on, once
the balance of bearish or bullish sentiment has changed.

I refer to this as the volume point of control because it is the ful-

crum point at which a currency pair is balanced. In other words,
the bullish and bearish sentiment is equally balanced. At higher
and lower levels, high volume and low volume nodes are also
created, and these can then be used in the same was as for
price resistance and support. In other words, if a low volume
node is approached in due course, then we can expect the mar-
ket to move through relatively quickly as there is little in the way
of transacted volume to cause a pause in price action.

22
In addition, if the market considered this area to be of little sig-
nificance in the past, then it is unlikely to be of great signifi-
cance in the present or future. Equally, if we have a high volume
node then the opposite is expected, with a pause and move
into congestion then likely. Using volume in this way on the Y
axis of the price chart, then gives us two perspectives on sup-
port and resistance with one based on price, which is the more
traditional approach, and the other based on volume using the
volume point of control indicator.

And finally, just a word or two about what we mean by volume.

For stocks and ETF’s, this is the volume reported through the
physical exchange. For futures, it is the futures volume, and for
spot forex, it is the proxy volume of tick activity. All are very dif-
ferent, but all report activity and volume, and if you have a price
chart with volume, then you can apply this methodology to any
chart and to any timeframe. But volume is always relative, both
to the session and time of year. At seasonal periods we see a
general decline in volume, which is to be expected. For exam-
ple when markets are closed for holidays we see low volume.

Volume reveals the truth behind price action. It reveals precisely

what the market makers or insiders are planning to do next. And

23
as a trader or investor, there is really only one thing we ever
want to know, namely the answer to the question of where is
the market going next. And if you can answer this question with
some degree of confidence, then you will take your investing
and trading to a new and exciting level. But remember, there is
nothing new in trading. This approach has been around for over
100 years. It has stood the test of time, and has been adopted
by some of the greatest traders of the past and present.

For myself, I have used this approach for over twenty years, and
for me, a chart without volume only tells half the story. And even
more important, if you have an existing approach which you use
currently, there is no need to change. Simply add volume price
analysis to your toolkit, and I know it will help you enormously in
your own forex trading.

24
 Section One - Daily charts
In this section we start with several worked examples using the
daily timeframe from the spot forex market. All the examples in
this section are taken using the NinjaTrader platform.

When using the daily timeframe for any analysis, it is always im-
portant to remember two things.

First volume can and is seasonal. Second, when markets are

having a public holiday, this too is reflected in the volume on the
day. Typically on the daily charts we tend to see volumes de-
cline in the summer months, then generally rise again into the fi-
nal quarter, before falling once more as we come to the end of
the year with many institutions closing out their books early in
December, with volume remaining low until the second week in
January.

The second issue is public holidays, and it is very easy to forget

this when scanning a daily chart, with low volume basrs then be-
ing misinterpreted.

25
AUD/CAD - daily - Oct to Dec 2017
more weakness
two up candles

hanging man
two bar reversal
note stopping volume

The daily chart is always an excellent place to start, whether for

a longer term perspective of the pair, or simply to consider the
previous day’s price action which can provide some clues from
an intraday perspective. So in the first group of examples, we
are going to start with the daily chart, and all of these were
taken towards the end of 2017 over a 60 day period, and start-
ing with the AUD/CAD.

As always, there are many lessons we can learn here and the
starting point is as the price action develops, moving deeper
into October with the two up candles. And the first point to note

26
with both these candles is the volume. Compare the volume on
both with the highest volume of the month up to that point,
which was in late September. The volume for both candles
looks average, and not perhaps what we should expect, particu-
larly on the second candle which has seen a dramatic move
higher, but the volume here is only marginally higher than the
previous candle. This looks to be an anomaly, and an early warn-
ing signal the market makers are not participating here, but sim-
ply moving prices higher in preparation for a new campaign.
From a price perspective the second candle is also signaling
some weakness given the depth of the wick to the upper body,
so we have two signals here.

This initial weakness is confirmed over the following two days,

with two shooting star candles, but again the volume is only av-
erage here, so suggesting we are not yet ready for a bigger
move. And whilst the pair does fall the following day we have a
two bar reversal with the pair attempting to rally higher, but note
the fall in volume.

The pair is attempting to rise, but on falling volume, giving us a

further signal of potential weakness ahead. This is then followed
by a series of candles signaling we are approaching a top, and

27
that we should be prepared for a move lower, and a new cam-
paign to start.

First comes the hanging man candle, the first sign of heavy sell-
ing but the market makers are not ready yet and the pair is sup-
ported on high volume. The hanging man candle is always one
to look out for at the top of a rally as it is the first sign of selling
entering the market following a move higher. What is happening
here is the market is weak, and staring to sell, but the market
makers move in to buy the selling as they are not yet ready to
develop the new campaign.

The hanging man alone is not sufficient to provide a strong sig-

nal, but when it is followed by subsequent signals of weakness,
then its significance is increased, as is the case here, as it is fol-
lowed by three further shooting star candles. The first of these
comes two days later on very high volume, with the final two on
good volume, adding further weight. Now it is not a question of
if this pair will develop into the new bearish trend, but when,
and the following day the wide spread down candle signals the
start of the new campaign.

This develops into mid November before stopping volume ar-

rives and further ‘mopping up’ follows, before the rally higher de-

28
velops off the lows on rising volume. However the penultimate
candle signals further weakness. The price action is rising with
volume, but the pair is struggling as signaled with the wick to
the upper body of this candle. More effort is being exerted by
the market makers but the market is unresponsive to higher
prices, so the price action reflects this fact.

On the 1st of December, the pair duly roll over, and pick up the
bearish momentum once again, and if the floor of 0.9650 is
breached then we can expect to see a deeper move lower in
due course.

29
AUD/CHF - daily - Oct to Dec 2017

strong selling classic trap

signal

two bar note these two

reversal then this!
candles

rising volume

Another example from an Aussie dollar cross pair, this time for
the AUD/CHF. The starting point here is to the left of the chart
with the two bar reversal, which is often a strong signal, and
one that is easy to spot as it is easy to overlay one candle with
another to create what would be a shooting star candle on a
two day chart. This is one of the easiest ‘multiple candle’ pat-
terns to view quickly and without reference to the appropriate
chart, and we have several examples here, which was one rea-
son I selected this as an example. This is the first.

30
The bearish trend duly develops, and then we see a strong sig-
nal this trend is set to continue with the weak attempt to rally
during the day on high volume, with the candle closing with a
deep wick to the upper body. This is a classic candle, and asso-
ciated volume profile to watch out for in any move lower be-
cause it signals further weakness to come. The market makers
are selling here into an already weakened market, hoping to
draw in traders who are buying on dips on the expectation the
move is over, It is not, as we can see clearly from the volume as-
sociated with the candle. Clearly the market makers are selling,
and selling heavily, so we expect further downside price action,
which arrives over the next two days.

The pair then move into an extended congestion phase, and in

a tight range during the course of which we see several strong
signals, along with some classic traps set by the market mak-
ers.

If we start towards the end of October, and note the two can-
dles that follow the down candle. Here we have rising volume
which is high on both, yet the price spread on the day is very
narrow, sending a strong signal the market makers are selling
heavily into a weak market. After all, on such high volume we
should expect to see a wide spread up candle on both with a

31
significant rise in price action. We have neither, and only a mar-
ginal move higher. Three candles later we then see a wide
spread up candle on the day, but look at the volume. It is only
average and substantially lower than our previous two candles.
This is a classic trap being set by the market makers moving
the price higher whilst not participating themselves. The follow-
ing day they sell, with the narrow spread candle on rising vol-
ume telling its own story. The market makers are selling into
weakness here and preparing for the campaign to develop.

The wide spread down candle then creates the evening star pat-
tern of a top with the two bar reversal of early November then fir-
ing the starting gun with the bearish trend developing on rising
volume and down we go. Note the weak attempt to rally on fal-
ling volume before the bearish trend is resumed and further con-
firmed over the last three candles on the chart with volume and
price confirming further weakness ahead for the pair.

32
AUD/JPY - daily- Oct to Dec 2017
highest more weakness
volume

two bar
reversal narrow
spreads and
high volume rising volume

Some more great lessons on the daily chart this time on the
AUD/JPY, and in particular the signals which will help to provide
very strong signs of a continuation of the primary bearish trend.
Joining a trend once established can be extremely difficult, but
not when applying volume price analysis, which is one of the
most powerful applications of this methodology as the signals
are clear and unequivocal.

If we begin with the two bar reversal to the left of the chart, this
is then followed immediately with the hanging man before the
bearish sentiment then starts to develop, and three candles

33
later we see the highest volume of the session, and associated
with a strong signal of weakness to come, with the wick to the
upper body of a narrow spread candle.

This is followed a few days later with further confirming signals,

as the pair rallies over two days, but on narrow spread candles
and high volume. Here the market makers are selling into weak-
ness, hence the reason the price action is narrow. This is the
equivalent of driving a car up a steep hill on an icy road. As the
road becomes steeper more pressure is applied to the accelera-
tor, but the car will eventually slow and perhaps reach a point at
which it is stationary, with the wheels spinning and failing to
grip. It is the same here. Effort and result are in disagreement
giving us a clear anomaly, and perfect example of Wyckoff’s
third law.

Bearish momentum develops with the pair move into conges-

tion and a rally, before we see a further example of weakness
with the two shooting star candles on high volume. Again a clas-
sic example of weakness as the market makers sell. At this
point bearish momentum then picks up pace, with the classic
rising volume and falling price confirming this in mid November
as the 87.00 price handle is breached and potential support bro-
ken.

34
What is interesting now is the slowing of the bearish trend as
we move to the right of the chart, and into early December.

Here we can see the bearish volumes falling, and price action is
starting to flatten off. In the final few candles bullish momentum
is now developing on rising volume, and with a solid platform of
support now in place looks set to test resistance in the 87.00
area in the short term.

35
AUD/NZD - daily- Oct to Dec 2017

classic trap

I selected this example for two reasons. First to highlight the

comparative nature of volume and price, and second to illus-
trate a powerful example of the tricks the market makers play.

The candle to focus on here is the wide spread up candle of

mid October. Imagine the number of traders jumping into this
move on the expectation of the development of bullish momen-
tum, only to be left stranded, anxious and increasingly fearful as
the pair promptly reverses a few days later, leaving them in a
weak position, and no doubt closing out at a loss or being
stopped out in due course.

36
The key here is the associated volume and the first question to
ask is always:- Does this look right?

And the answer, of course, is no. For such a powerful move,

and according to Wyckoff’s third law, this type of result should
be matched with an equivalent amount of effort, and clearly this
is not the case. And for comparison we would only have had to
look to the left of the chart ( the right would not have been cre-
ated at this point) to look for equivalent volume bars and their
associated price action. And the instant conclusion is clear. This
is a trap. The volume should be double or more for such a dra-
matic move, so clearly the market makers are not participating
and instead setting a trap for the unwary.

And indeed the following day also makes the point. Here we
have an almost equivalent amount of volume, but look at the
price action, it is very contained. This confirms two things. First
we are correct in thinking this is a trap, and second the pair is
being set up for a bearish trend.

Further signals of weakness then follow over the next few days
with the two bar reversal, and shooting star candles all adding
to this view with the pair reversing and moving lower into the
bearish trend.

37
AUD/USD - daily - Oct to Dec 2017

stopping volume
falling price &
rising volume

and again

classic candle
and volume

Finally for the Aussie dollar we come to the major for the cur-
rency against the US dollar, and some excellent examples of vol-
ume price analysis in action in the longer term bearish trend.

We start here with the fourth candle from the left of the chart,
and also the highest volume of the period, and a classic combi-
nation of the shooting star candle and ultra high volume. In this
case the reaction is instant with a wide spread down candle the
following day.. This happens, but is not always the case, and it
is easy to jump into the market on such a strong signal of weak-
ness. Such immediate reversals do happen, but it is more com-

38
mon for the market to congest first before changing direction
from one campaign to another, so patience is often required.

In this case the price waterfall develops nicely before the mar-
ket makers step in to buy in early October, driving the price up
into a congestion phase which then breaks down in classic fash-
ion on falling prices and rising volume, and re-establishment of
the primary trend once more.

More recently, towards the end of November we have seen this

pattern repeated in less dramatic style, but with no signs just
yet of stopping volume, the bearish trend looks set to continue
for the medium term.

39
CAD/JPY - daily - Oct to Dec 2017

and repeated

confidence

deep wick on high

volume
rising price &
falling volume

The CAD/JPY daily chart is yet another which delivers some ex-
cellent lessons on reading the re-establishment of the primary
trend following a move into a secondary trend in the move
lower.

Once again we start to the left of the chart in mid September.

Here we have a classic congestion phase building, with signs of
weakness that are finally confirmed with the highest volume of
the session, and the deep wick candle of late September. The
bearish momentum for the pair is given a further injection of mo-
mentum in mid October with a repeat performance, and the

40
price waterfall then developing. Note the candle that adds fur-
ther to this signal two candles later, which would have given us
confidence to join the move lower at this point.

Early November then sees a rally begin, but at this point we can-
not be sure whether this is a reversal of the primary trend into a
bullish trend higher, or simply a secondary trend - in other
words a pullback before the primary trend is re-established.
However, note the volume and price action which is a tell tale
sign. Rising prices and falling volume, and moreover on narrow-
ing spreads. This looks weak for sure, and is most certainly only
a temporary reversal. In other words, a secondary trend within
the primary, which is then re-established in mid November.

Finally note the candles and volume of late November. Here we

see high volume and narrow spread candles signaling the mar-
ket makers are moving in to buy, and it is no surprise to see the
rally higher on the last to candles of the chart.

41
EUR/CHF - daily - Oct to Dec 2017

trap is set

climactic price action and

volume

As we move to some of the euro pairs, this is a great example

of the tricks the market makers frequently play, moving price
dramatically in one direction, but with no participation from
themselves. Traders are then left trapped in weak positions as
the market reverses.

In this case, the trap move was to the downside, and clearly ap-
parent with the wide spread down candle on average volume of
late September. Indeed for comparison we would only have had
to look at the high volume of earlier in the month to gain some
idea of whether this was high medium or low volume. What is

42
clear, is the market makers are not participating here, so a trap
is being set, which is duly sprung for the remainder of October
as the pair rally strongly. Traders who jumped in on the expecta-
tion of some easy and quick profits are left stranded, and no
doubt stopped out or have to close out at a loss.

What then develops from late October onwards, and through to

the early December is classic climactic price action, as the pair
moves into a period of consolidation, which is characterised
with volatile moves and spikes in volume, both low and high. In
addition, and as part of the climax, a strong ceiling of resistance
is also being built in the 1.1700 region with constant tests, and
retests, all of which fail to break through this key level, and with
a triple top now in development, this pair is looking increasingly
bearish in this timeframe. The floor of support is equally impor-
tant with a move through 1.1550 then opening the way to a sus-
tained bearish trend developing in the medium term.

43
EUR/GBP - daily - Oct to Dec 2017

note
another trap

average
average
volume
volume only
low volume

I selected this example on the EUR/GBP pair for several rea-

sons, and not least to provide a ‘close up’ view of the selling cli-
max, and in particular the volatile type of price action we expect
to see in such phases.

Both the selling climax and the buying climax are characterised
with whipsaw price action that changes direction often and vio-
lently, and is associated with volume both high and low. What
happens in these phases is very simple. The market makers are
moving price rapidly from bearish to bullish and back again, to
constantly draw traders who then become trapped in weak posi-

44
tions. For example, traders who are fearful of missing out on the
move higher, buy and are then caught when the market reverses
lower, where traders who are looking to sell, jump in. The mar-
ket then reverses higher again, where those traders who were
long exit, grateful to have taken just a small loss.

The market then reverses again, and those traders who were
short do the same thing and exit. It is a constant process of
push and pull. The market makers’ objective in all of this is to
sell prior to a campaign lower, and in amongst all this price ac-
tion, the traps are many and varied.

In October we can see several. The dramatic candle with the

deep wick, and only average volume. The two bar reversal,
which again is on average volume, and finally the move lower to-
wards the end of the month on low volume. November then
opens with another, a wide spread up candle on average vol-
ume. Clearly no participation here by the market makers, with
the pair promptly reversing over the following days.

This is followed by a rapid move higher, but note the volume it is

average at best, with the top then created and rolling over. This
trick is repeated again on even lower volume this time, before
turning lower almost instantly. All clever tricks, and all clearly sig-

45
naling the market makers are not joining in here and merely
pushing the market this way and that in the selling climax. At
some point heavy selling will ensue, and then the next cam-
paign will begin in earnest.

46
EUR/NZD - daily - Oct to Dec 2017

note

note
heavy
selling
falling market
& falling volume
step
in

This is an interesting chart, where we start on the left in Septem-

ber with a congestion phase as the market makers accumulate,
and prepare for the next phase of the campaign. Note the buy-
ing in late September and early October with the rally duly
launched. However, by mid October this has run out of steam
and selling ensues, but the market makers step in very quickly
on the two narrow spread down candles to buy, thereby driving
the pair higher once more.

The two bar reversal then arrives at the top of the rally, and bear-
ish sentiment then takes hold. However, note the general de-

47
cline in the volume under each subsequent down candle. Here
we have a falling market, but the selling volumes are also declin-
ing and sending a clear signal this reversal lacks strength and is
unlikely to go far.

The two bar reversal signals the bottom, and the pair rally
higher again, but note the volume on the wide spread up can-
dle. It is only average, and a warning signal the market makers
are not helping to drive this market higher. Then we see the rea-
son why on the next candle. Ultra high volume and a narrow
spread candle. The market makers are now selling heavily into
weakness here, and this is further confirmed with the following
three candles. Two narrow spread candles on high volume fol-
lowed by a third with a deep wick, and again on high volume.

And moving to the extreme right of the chart, now we can see
ultra high volumes building with two further two bar reversals to
the up side in the final two weeks. This chart is now developing
into a top, with high and rising volume failing to drive the market
higher.

48
EUR/USD - daily - Oct to Dec 2017

weakness
stopping
confirmed
volume

note the looks

weakness suspicious
more buying

The euro dollar is every scalper’s favourite pair, and yet with
some attention to the daily chart, may help to provide context
and confidence for the day and days ahead.

The first point of note is the very first candle. Extreme volume
and a very weak candle, with further very high volume driven
into two relatively narrow spread candles, suggesting weakness
ahead. This appears the following day and is further confirmed
two days later with the shooting star candle on falling volume.
The gapped down bearish candle then starts the run of three
days of down candles on good volume.

49
The next area of the chart is towards the end of October. First
we have the wide spread down candle, and followed the next
day by stopping volume and buying by the market makers. Fur-
ther buying then follows in the mopping up phase, and the pair
rallies before delivering a shooting star candle on high volume
with a consequent reversal lower.

Finally note the sudden sharp rally of late November on average

to low volume. This looks very suspicious, so it is no surprise to
see the pair move into a congestion phase with no follow
through. The market makers here are not participating, and sim-
ply moving the price higher before selling into the reversal.

In addition, the price action is now approaching an area of resis-

tance to the left of the chart, so we can expect further consolida-
tion in this region.

50
GBP/CHF - daily - Oct to Dec 2017

trap is laid
and then
sprung

This is another chart that has many lessons, but the one I want
to focus on particularly, is once again an example where under-
standing when the market makers are not participating in a
move is just as important as understanding when they are.

The price action of note here develops in the centre of the chart
at the very end of October, and the start of November. And the
key thing to remember here is the price action to the left will al-
ready be available for benchmarking this region in terms of the
associated volume.

51
So if we start with the first of the three up candles. This looks
weak, and had we looked at this set up at the end of the day,
our expectation would be to see some weakness to follow. But
this is not the case, and the pair rallies strongly the following
day, albeit on slightly lower volume. This now looks very odd,
and for comparison and a benchmark, we only have to find an
equivalent candle in terms of spread, and consider the volume,
to appreciate this is indeed a trap move, and one which is likely
to come to an abrupt end.

The price action then continues higher for a third day, but again
looks weak, as there is a wick to the upper body of the candle,
on the same average volume. This makes the previous day’s
price action even more suspicious, and the warning bells are
now ringing loud and clear.

The following day bullish traders are trapped as the pair falls dra-
matically. The trap was laid and then sprung.

52
GBP/JPY - daily - Oct to Dec 2017

two bar
and a repeat
reversal

note the
volume !

The GBP/JPY is one of the most volatile of all the principle cur-
rency pairs, and its nickname of ‘the dragon’ is one that is well
deserved, as moves of over 200 pips in the day are relatively
common. The term I use to describe price action in this pair is
the ‘soufflé effect’ which is price action that rises quickly, but
collapses equally as fast. And we have the perfect example here
as we start to the left of the chart. The first candle is dramatic
by any standards, with a range of over 400 pips on the day. But
note the volume, which by any ‘common sense’ standard
should be dramatic when associated with such a move. But the
volume is not dramatic, and we simply see volume that is high,

53
but not excessively so. This should set the alarm bells ringing
immediately as it is clearly an anomaly under Wyckoff’s third law
of effort and result. The result here is huge, but the effort is aver-
age. The two aspects are in disagreement and therefore an
alarm bell sounds.

But we’re not done just yet, and over the following few days, we
see further signs of weakness which merely confirm what we
first thought, and in addition add weight to the fact that a trap
has been laid once again. After all, the volume bars over the fol-
lowing days is of the same height as on the first candle, so this
must be a false move. The market makers are planning a cam-
paign here and not participating.

Then the two bar reversal arrives, and the trend lower begins
and gathers momentum. However, note the volume which is
generally falling with the falling market, so whilst we have strong
bearish momentum, we do not expect this to continue into a
sustained rout given the selling pressure which is declining.

And the trap described here is then repeated on the last four
candles of the chart. A rapid and sustained move on three can-
dles of equal volume, before coming to a shuddering halt on the
first day of December.

54
GBP/USD - daily - Oct to Dec 2017
very strong signal
market makers
further weak candle participating

note
accumulation phase

This chart for cable could best be described as a game of two

halves, with the selling climax to the left, the price waterfall, and
subsequent buying climax and accumulation in the middle, be-
fore the reversal in primary trend and rally to the right.

If we start on the left, the first very strong signal is on the deep
wick shooting star candle, coupled with very high volume and a
clear signal the market makers are selling heavily here. This is
followed by the two bar reversal which confirms the weakness,
and is followed by a further weak candle closing with a deep
wick to the upper body and high volume once again. The price

55
waterfall then develops accordingly. Note the candle which pre-
cedes the second leg down, and is a strong entry point for
those who missed the initial bearish signal.

Then we move into the accumulation phase with the pair trading
in a range of 200 pips with insider buying apparent and weak ral-
lies, before the move higher finally gathers momentum in the fi-
nal few days of November on high volume. Clearly the market
makers are participating here and driving the pair higher, and
given the strong platform of support now in place below, any
move through the 1.3600 region is likely to see this trend de-
velop further, provided the market makers continue to remain in-
volved on supportive volume.

56
NZD/CAD - daily - Oct to Dec 2017

top four
top two

top three

top one

This is a great chart with four wonderful little tops formed all of-
fering clear trading opportunities to the short side. But what is
also interesting here is that whilst the tone is bearish overall, it is
not rampaging lower, but sliding lower, with each rally reaching
a top that is lower than the previous, and more reminiscent of
the rounded tops of a move in a bullish trend. Nevertheless,
there are plenty of clear signals here.

Top one starts with the two bar reversal lower, and is followed
shortly after by a two bar reversal higher. Then come the signals
confirming weakness. Look at the volume on the candle follow-

57
ing the wide spread up candle. It is almost the same volume,
but the price action is so weak. This is followed by lower vol-
ume on yet another weak shooting star candle. The weakness
develops, and we move into the price waterfall.

Then we see the rally to top number two. But look at the three
candles leading to the shooting star candle at the top of the hill.
Both have deep wicks to the upper body, and both have good
volume, and so the pair rolls over delivering two down days of
price action.

Rally three then follows, but once again topped off with candles
with deep wicks and good volume. A two bar reversal then adds
further confirmation as the pair picks up bearish momentum.

Finally we have rally number four. And again it is a similar pat-

tern topped off with two shooting star candles on good volume.
And down goes the pair once more.

58
NZD/JPY - daily - Oct to Dec 2017

repeated same volume but

narrow spread

weakness

third candle
note volume

I have included this chart to show one particular aspect of vol-

ume price analysis, which is perhaps even more powerful than
the entry and the exit of any position. And that’s in the ability of
volume price analysis to give you confidence to hold a position
in the market during the constant pullbacks and reversals, that
are all part of the longer term trend.

Here we have an example of the primary trend lower, which is

constantly punctuated with secondary trends as described by
Wyckoff, which is the reversal against the primary trend in the
timescale under consideration.

59
Suppose we have entered a short position, which has devel-
oped in the first move lower, but now we start to see the rever-
sal against us as the secondary trend takes hold. But, is this a
reversal to a primary trend in the opposite direction? In other
words, the development of a bullish trend higher, or simply a
pullback in the move lower? How do we know, and how can we
be sure? And the answer lies in applying volume price analysis.

In the first reversal what do we see?

And it is the third up candle which gives us a very strong clue.

Here we see rising volume over the first three candles, but on
the third, we have a weak candle, and in addition higher volume
than on the previous candle. The market makers are selling into
weakness here, and this is repeated two candles later as the re-
sistance above is tested. So we are expecting the primary trend
to be re-established, which proves to be the case, with the wide
spread down candle driving momentum back into the primary
trend, and on down to the next pause point.

Here we see a slightly different type of rally, but nonetheless

one that should give us confidence. After the first up candle, the
next arrives on identical volume but note the spread. It is very
narrow and sending a clear signal of weakness. After all, on the

60
same volume with the preceding candle we had a wide spread
up candle. Yet here we have a narrow spread. The conclusion
here is simple. The market makers are selling into weakness
once again. This sequence ends with the two bar reversal but
note the volume on the up candle, it is very low. And so down
we go once again into the next phase of downwards momen-
tum.

And as we move to the end of November, the same pattern of

price and volume is being repeated, with volume which is rising
rapidly but with no equivalent increase in price. So the bearish
picture for this pair looks set to continue for the time being.

61
NZD/USD - daily - Oct to Dec 2017

candle extreme
has higher
four volume
volume

note the
candle wicks
two

This chart for the NZD/USD has many similarities to the previ-
ous chart, and I have added it just for completeness.

Here again we have the primary bearish trend over the period
punctuated with secondary trend reversals. And we start here
with two very strong entry signals which appear as candles two
and four on the chart starting from the left. Candle two gives us
an early warning of weakness to come on high volume with a
deep wick to the upper body, candle four then confirms this sig-
nal loud and clear with an even stronger signal on extreme vol-
ume, and a very deep wick to the upper body. If we were not

62
ready on the first signal, we should certainly be ready on the
second. The price waterfall duly develops.

Then the secondary trend begins but note the price action. We
have rising volume here, but the second up candle in the se-
quence has higher volume than the previous candle, but the
spread is narrower. In addition, a wick has developed to the up-
per body. This is signaling weakness, which is confirmed two
candles later with the doji.

Down we go again on rising volume before the next reversal ar-

rives. But almost immediately weakness is signaled with the up-
per wicks to all these candles on good volume before the pri-
mary trend is re-established once again.

Finally note the price and volume of the last few candles in No-
vember, and in particular the extreme volume on the narrow
body candles with the wicks. Two such examples one after the
other. A strong signal the pair remain weak.

63
USD/NOK - daily - Oct to Dec 2017

market makers five

signs of
moving in
weakness

four
falling prices and
falling volume
positive

So far we have looked at a couple of examples where volume

price analysis can help us to stay in a primary trend lower, and
in this example for the USD/NOK we take a look at the oppo-
site, which is holding in a primary trend higher. The USD/NOK is
one of those pairs that is increasingly available on many plat-
forms, and with its relationship to oil, offers excellent trading op-
portunities in much the same way as the Canadian dollar pairs.

If we start to the left of the chart, the first rally gets underway
but almost immediately starts to look rather weak as we enter
October. First note the generally falling volume on the up can-

64
dles in the move. Then as we reach the top of the rally we see
some signs of weakness developing, first on lower volume, but
also on one high volume candle with the deep wick to the upper
body confirming this weakness. Five down days then follow, but
the volume remains flat, and is not rising. Moreover, on the final
candle, the spread is narrow on higher volume, signaling the
market makers are now moving in to buy and support the pri-
mary trend. The next three up candles are a positive sign on ris-
ing volume and then we see the injection of volume with the
move completed with the nice wide spread up candle on the
highest volume of the chart. The market makers are in full con-
trol and participating strongly.

The congestion phase then follows. The first candle in this se-
quence looks weak, as does the second, but then note candles
four and five. The market makers are buying here. The spreads
are narrow and the volume is rising and high. If they were sell-
ing, then the spreads would be wide and down. They are not.
So this must be buying to support the rally once again. Then we
are off again and moving higher once more.

A top is then formed with the first down candle and wick to the
upper body, but note the volume. It is smaller than many of the
previous volume bars, and on the following day, lower still, with

65
the third down day on a narrow spread, associated with the
smallest volume of all. This is a classic signal, and one which
gives a huge boost in confidence. After all, if this were sus-
tained market maker selling, then the pair would have fallen
hard and fast. A falling market with rising volume is a clear sig-
nal of continuation. Equally, and as we have here, a falling mar-
ket with falling volume is a clear signal of an anomaly, and tells
us the trend lower is unlikely to develop. In other words, this is
simply a secondary trend reversal against the primary trend.

And so it proves to be, with the final few candles rising strongly
on rising volume, and confirming the re-establishment of the pri-
mary trend higher.

66
USD/CAD - daily - Oct to Dec 2017

two
one

three

And speaking of oil, we now have an example for the USD/CAD,

and the lesson here, is in using the chart to help provide a com-
parative approach to both volume and price. Volume is always
relative, as we are constantly trying to judge whether the vol-
ume we see with the associated price action is in agreement or
disagreement.

In this context the focus is on the up candles in this move, and

the most important concept here is to remember we need to
compare like with like, apples with apples, and not apples wit
pears. So when comparing price action and associated volume

67
we must try to consider like for like candles, which then provide
a valid basis for comparison.

So in this example, we can compare the various wide spread up

candles, of which we have three, all of similar price spread, with
very small or no wicks top and bottom. And note the volume on
each - they are generally in agreement in the move higher. Per-
haps candle one is a little taller, but candles two and three look
to be much the same.

This is an exercise we do all the time when studying a price

chart, but when doing so, make sure to compare like for like can-
dles in order to arrive at a valid analysis.

68
USD/CHF - daily - Oct to Dec 2017

strong sign of
weakness

we can compare penultimate

volume candle

This is a very neat example of the comparative nature of volume

price analysis, and here we are in a trend higher. This chart also
highlights the comparison of one volume bar with another, and
what this is telling us about the weakness or strength of insider
buying or selling.

If we start at the centre of the chart, towards the end of October

we see a strong sign of weakness with the shooting star candle
on very high volume. What is interesting here is then to compare
the volume with the previous day where we saw a strong move

69
on the day with a wide spread up candle so the market markets
are buying into the move higher.

But, the following day we see a strong signal they are now sell-
ing into weakness with the same enthusiasm. And there could
be several reasons for such a change in sentiment, and these in-
clude: an item of fundamental news, a change from risk on to
risk off, or simply stop hunting.

However, we are not comparing the price here, only the volume
which tells us this is very strong selling by the market makers.
And this is further confirmed by considering other shooting star
type candles in the move higher, which have much lower vol-
ume, which only resulted in minor pullbacks in the primary trend
higher.

This then is a significant candle, and by comparing it with the

penultimate candle on the chart, it gives us a strong sign this
candle too is a strong signal of further weakness. Yes the vol-
ume is lower than our ‘benchmark’ shooting star at the top, but
nevertheless volume here is significant, and indeed the final day
reflected this bearish picture.

Once again we are comparing similar candles and on this chart

we have several candles which closed with an upper wick and

70
and narrow body. Those in the early part of the trend higher,
have relatively low volume, suggesting a lack of selling pressure
and indicative of minor moves lower whilst those in the latter
part of the trend higher, and into the reversal, show generally
higher volume. Comparing one with another gives us, not only
great insight into the candle itself and also the context of where
it is in the trend, but also whether we are simply seeing some
weakness develop, or a more pronounced reversal in trend.

71
USD/JPY - daily - Oct to Dec 2017

initial two bar

weakness reversal

modest
deep wick volume

The USD/JPY is one of the trickiest pairs to trade, with many

forex traders believing it follows the same pattern as other yen
based pairs, or perhaps simply follows other majors driven by
the US dollar. This is most certainly not the case as the USD/
JPY is a pair of risk, as the pair has risk based currencies on
both sides. So this is even more of a reason to apply a method-
ology such as volume price analysis to help make sense of this
complicated and complex pair.

And if we begin with the initial rally higher in September to the

left of the chart, initial weakness becomes evident on the fifth

72
candle in the sequence, which has the same volume as the pre-
ceding candle, but a much reduced spread on the body of the
candle. Clearly the market makers are finding it hard work here
and selling into weakness.

The pair attempts to rally, but on the second candle, we have a

deep wick to the upper body and increased volume, which con-
firms the earlier signal. The pair is looking weak, and this is con-
firmed several times as we move into early October before the
pair move lower into the middle of the month. This move comes
to an end on the two bar reversal, and the rally higher begins,
but almost immediately runs into trouble, and an extended con-
gestion phase begins, punctuated by deep wicks to the top of
the candles, hanging men candles, and doji candles. The weak-
ness is finally triggered in mid November, but note the volume in
the move lower - it is generally falling, and the final wide spread
down candle has only modest volume, with the move then com-
ing to a halt as the market makers move in and buy to take the
pair higher once more.

However, given the final candle on the chart, this rally looks to
have run out of steam with the two bar reversal now in place.

73
 Section Two - Hourly charts
In this section we move from the daily timeframe to the hourly ti-
meframe, and all the examples here are taken from the MT4 plat-
form and once again all are for spot forex currency pairs.

The issue when considering volume in this timeframe, is to en-

sure we are comparing like with like as volume in one session
will be very different to volume in another. For example volume
in the London and US session will be much deeper than volume
in the Far East and Asia session. This is something we have to
be aware of as volume traders in this, or indeed any other mar-
ket where volume will vary accordingly.

When comparing volume here, we can compare on two levels.

First with like volume within the session itself, and then with like
volume in a previous session. So here we can compare London
on the day with London on a previous day, or volume in the US
session with volume in a previous US session. Equally, we can
compare volume in the Far East and Asia with volume in a ses-
sion in history.

What we cannot compare is volume in one session with volume

in another. The comparison of London volumes with Asia and
Far East volumes does not reveal anything in terms of volume

74
price analysis, other than the fact there is a huge variation -
which we know anyway.

As you will see in these examples I refer to sessions, as session

one, session two etc. This simply means the complete session
from the London open on one day to the London open on the
next. In other words, a complete 24 hour cycle. Each of the
charts that follows has five cycles, in other words is over a week
of price action, and each session is characterised by the typical
rise and fall in volume in the 24 hour period which creates the
‘wave patterns’. To help make this easier, I have labelled each
chart with a 1,2,3,4,5 notation to make this clear, and so make
identifying the session referenced easier to spot.

75
AUD/CAD - 60 minute chart

two up
highest selling
candles
volume into weakness -
trap set

1 2 3 4 5

In this section we move to consider examples form the faster ti-

meframes starting with the 60 minute chart which is one of the
most popular. As before these are all taken from the spot forex
world

When considering charts over the slower timeframes, there will

always be a rise and fall as the session moves from deep liquid-
ity in Europe, London and the US, into thinner volumes in Asia
and the Far East. This does not invalidate any analysis, and in-
deed provides a benchmark session by session.

I selected this example for a particular reason and that’s to

show the time a pair can remain in a congestion phase, and

76
even when we see strong volume price analysis signals, pa-
tience is always required. Remember, markets spend far more
time in congestion than they do in trend, and to take advantage
of any trend, we just have to wait for the congestion phase to
end.

If we start to the left of the chart, the pair rise initially with two
up candles on high volume, but then move into congestion for
the first session.

In the second session the highest volume is under the shooting

star candle. Clearly the market makers are selling into weakness
here. This consolidation phase continues into session three, be-
fore the ultra high shooting star candle appears, but note the vol-
ume. This is in the Far East and Asia session and clearly this is
a trap move as there is very low volume under the candle. The
trap is being set.

Finally the market breaks in session four on high volume, with

the pair then driven lower in session five as the week comes to
an end.

77
AUD/CHF - 60 minute chart

note high
volume

momentum market
trap move
then weakness makers
selling
1 2 3 4 5

More great examples here. In the first session we see a nice

steady rise for the pair with a pause, before an injection of mo-
mentum with the wide spread up candle, but immediately after
we see weakness where we have the same amount of volume,
but this time with a shooting star candle. This is a clear sign of
weakness. The market makers are selling heavily here. And
down the market goes overnight.

Session two sees the rally develop off the initial buying, but
again is topped off with a weak candle on ultra high volume be-
fore drifting lower off the highs. The volume here is the highest
on the chart, and note the spread of price action, and compare

78
this to volumes seen in the first session and associated price
spread. On such extreme volume we should expect to see a dra-
matic move in price. We have not, so this sends a very loud sig-
nal the market makers are preparing to leave, and selling heavily
into weakness here. As always we have to be patient and wait,
but the signal is very clear.

Session three sees the volumes reduce, and gives an example

of the comparative nature of volume across the sessions.
Clearly volumes in sessions one and two were dramatically
higher, but the weakness has already been created in the pair
with the market makers having sold out and continuing to sell
into weakness. The spiked shooting star on low volume con-
firms the trap once more.

The weakness then builds into session four on rising volume

and ultimately into session five, and note the high volume of the
last candle immediately before the start of the price waterfall.

79
AUD/JPY - 60 minute chart

note more weakness

falling
highest volume volume
on shooting star the trap

1 2 3 4 5

If we start to the left of the chart, the price action develops

strongly, with the pair rising fast on rising volume before the top
is reached with two candles. Note the selling pressure on the
second down candle in this move higher, the volume is average
so sending a clear signal this move is not coming to an end just
yet.

The bullish momentum continues, but then we reach the top

with two candles. The first is a wide spread up candle on high
volume, but note the follow up candle. We have even higher vol-
ume, but a shooting star candle - another very clear and simple

80
signal to see, and off we go into the Asian session with the mar-
ket makers happily selling.

Session two confirms this weakness with higher volumes than

in the first session failing to move the market higher, and once
again confirming this weakness. Note the narrow spread of
these candles and the market falls with some buying then ap-
pearing as session three begins.

However, once more weakness is confirmed and note the rally

of session four on falling volume and dramatically lower than in
session one. This is looking ever weaker before finally in session
five the pair collapses with sustained selling pressure in the
price waterfall.

And always remember, regardless of whether you are an intra-

day trader or longer term trend trader, the slower timeframe
charts are just as important, and can reveal so much, as well as
provide a benchmark for the dominant market direction intra-
day.

81
AUD/NZD - 60 minute chart

three candle
rally
no follow heavy
through buying support selling

volume low?

1 2 3 5
4

Again, another example where the focus is on the market maker

selling at the top of the market rather than buying at the bottom.

If we begin on the left of the chart, intraday weakness appears

with the high volume and narrow spread body on the candle.
Clearly there has been no follow through from the up candle pre-
ceding it, and the remainder of the session is bearish. The mar-
ket makers are again selling into weakness here. Volume is be-
ing driven into the market as they sell, but the pair is unrespon-
sive as the market is weak, and so all this effort appears as a
narrow body on the candle. The close of the body in terms of
color is not important, and may close above the open or below.

82
What is important is the narrow spread at the top of a rally,
which signals weakness ahead, and coupled with the high vol-
ume, confirms the market makers are selling here.

Buying then appears in session two and the pair move back to
test the highs, but once again weakness is signaled with the
price action failing to follow through before moving lower, with
high volume confirming the weakness in the down candle. The
three candle rally is on falling volume, before we move into con-
gestion in session three.

Then we see extreme volatility. But what is interesting here is

the lack of volume. On such a move we should see participa-
tion. There is none, or very little and it is impossible to predict
market direction from such candles so patience is required. We
have to wait for the volatility to subside and see where the mar-
ket is moving once the volume has normalized.

Bullish momentum returns, before session five ends on heavy

selling.

83
AUD/USD - 60 minute chart

benchmark volume

focus here - a different

trap

1 2 3 4 5

In this example let’s start on the right hand side of the chart for
a change, as this is the take away point from this example.

The focus here is the wide spread up candle in the final session
of the period, and is a nice example with no wicks to top and
bottom.

Now consider the volume, and as a benchmark consider the vol-

ume in session two, which is the highest on the chart. The price
action associated with this candle was relatively narrow, and yet
the candle in session five is very wide. What can we conclude
from this apparent anomaly? Very simply, this is a trap move.

84
Why? Because for the market to be moved this much, and
based on our benchmark volume of an earlier session, the vol-
ume should be two or three times greater. Clearly this is some
sort of trap move being set by the market makers, and so it
proves to be, with the pair selling off heavily for the remainder of
the session.

I accept it takes courage to short after such a strong move, but

volume will help to give you the confidence to take such posi-
tions in the market. Every other trader would have been jumping
in long, which is precisely what the market makers want you to
do.

And this also highlights how to compare volume from session to

session. The volumes on a 60 minute chart will rise and fall over
the twenty four hour period. This is normal and to be expected,
and reflecting the fact trading volumes in London and the US
are, by definition, much higher than in Asia and the Far East,
which is what we see on the chart. So in order to make sure we
are comparing like volumes, we have to compare ‘across the
sessions’.

In other words, in the same session for a previous day. So we

compare London and the US with London and the US for a pre-

85
vious day. We cannot compare London and the US with Asia as
we are not comparing like with like. In this example we are us-
ing the chart to signal the highest peaks in volume, which in
turn gives us a benchmark for the volume we have considered
in this example. And from this simple analysis, one thing is
clear. We have an anomaly of effort and result as codified in
Wyckoff’s third law. And from this we can deduce the market
makers are not participating, but are laying a trap which is duly
sprung over the next few hours.

86
CAD/JPY - 60 minute chart

engulfed rally on falling

and lower volume?

and another
trap perhaps ?
1 2 3 4
5

We have some tricky price action here, which would also have
been heavily influenced by moves in the price of oil, as well as
the weekly oil inventories, which always play a major part on an
intraday basis for the Canadian dollar. So where to start?

Session one certainly has a bearish feel after the initial rally on
good volume, but the final candle at the top of the rally has
wicks to top and bottom, and is then engulfed by the following
candle on even higher volume. The subsequent three candle
rally looks weak as we have a rising market and falling volume
that really encapsulates the next few sessions. We do see buy-
ing by the market makers intraday followed by short term rallies,

87
and then we arrive at the last two sessions and once again it is
the comparative nature of volume that helps here and is the
most interesting price action of the chart.

Yes, the market has rallied strongly, but look at the volume
which is falling, and in addition is low when compared to vol-
ume earlier in the period, and also compared to volumes in pre-
vious same period sessions. The alarm bell is ringing loudly
here, particularly given the dramatic nature of the price action
which moved vertically over a three hour period. The market
makers and insiders are well aware of the emotional fear of miss-
ing out, and use it to great advantage. The market takes off,
traders wait in rising panic as the the price action continues,
and the fear of missing out grows exponentially. Finally, they
can wait no longer and jump in, generally just at the point the
market makers have decided to reverse the trend.

The rally is then topped off with a series of doji candles before

selling off with the wide spread down candle, but again, note
the volume. This looks odd on such a price move. We should ex-
pect to see ultra high volume associated with such a move, so
perhaps yet another trap is being set by the institutional market
makers. And indeed the down candle of two bars later confirms
this fact with higher volume here.

88
EUR/AUD - 60 minute chart

weak ?
weak again ?

hammer
1 2 3 4 5

This is another chart where the comparative nature of the ses-

sions helps to provide context for the volume profiles as we
move from one phase of price action to another. In this example
the volumes across the sessions are much the same with only
an increase in session two.

If we start to the left of the chart and session one, we have a

nicely developed price waterfall which finally comes to an end
on the hammer candle with the market makers stepping in to
buy. This is classic stopping volume, and in this case is unusual,
as the rally begins almost immediately as it generally takes both

89
time and effort for the market makers to absorb this degree of
selling pressure, but here it is absorbed in the hour.

The rally into session two looks a little weak with the three up
candles all topped off with wicks, and on volume that is falling
with the final candle at the top simply adding further weight to
the analysis.

This weakness is then confirmed with a second waterfall on ris-

ing volume, and a classic piece of volume price analysis action
with the price spreads widening on rising volume.

The remaining sessions are then punctuated with further buying

and selling within the consolidation phase with volumes gener-
ally declining slowly.

Finally in the last session we see the rally develop, but again
note the volume. Once again we have a classic anomaly with
the pair rising rapidly, but on falling volume, and one that is un-
likely to move far.

90
EUR/CAD - 60 minute chart
response on average
volume

pause point
strong signal

1 2 volume should be greater? 5

3 4

Back to the ‘p’ word here, where p is for patience. This is hard
to follow at times, but when a market is developing a well de-
fined area of congestion, patience is generally rewarded, and as
I have said many times before, time is the key here because the
longer a market is in congestion, then the stronger the trend is
likely to be once it starts.

This is enshrined in Wyckoff’s second law of cause and effect,

and the analogy I always use here is of a clockwork toy car.
Winding the spring takes time, and the longer it takes the more
energy is stored in the spring. When the toy is released, all the
energy is released. If the spring is fully wound then it will travel a

91
great deal further, but if only partially wound, it will travel less
far. This is the concept of time in the law of cause and effect.
The greater the cause ( in other words ‘time’ ) then the greater
will be the net result ( the effect ).

The ceiling of resistance on this chart is extremely well defined,

and session two confirms the campaign the market makers are
building here with the ultra high volume bar and associated
shooting star sending a strong signal of forthcoming weakness.
Further candles later in this session, and into session three, sim-
ply reinforces this view, before session four sees the price water-
fall develop on rising volume and widening spreads. A text book
example!

The pause point comes, but with no follow through and the wa-
terfall gains momentum. However, note the volume here, it is
now falling and so we have an anomaly of falling price and fal-
ling volume so we do not expect the pair to fall much further.
And in addition, note the spreads of the three down candles,
which are all wide, and we should expect to see higher volume
than is on the chart. Therefore, we can conclude this is not go-
ing much further.

92
The rally on session five is muted, and the contextual aspect of
the volume profiles help to frame this in terms of a major rever-
sal or simply profit taking.

The move lower resumes, and a break below the new floor of
support is likely to see further downside momentum.

Congestion phases also introduce the elements of support and

resistance, which are a key plank of all technical analysis and
also of volume price analysis. These are the areas where trends
are born. They are created during minor pauses in the secon-
dary trend, and more major areas during the selling and buying
climaxes which appear on all charts and in all timeframes.

And once one of the areas of resistance or support has been

breached, volume then helps to confirm whether the breakout is
genuine or false.

93
EUR/CHF - 60 minute chart

and again

more selling

selling
final phase of selling

1 2
3 4 5

In this example timing is key, and several great examples of vol-

ume price analysis in action.

The first session sees the pair rise, but note the weakness
which appears on high volume, a sign of some serious weak-
ness! However, the market makers are not quite ready just yet.

Session two sees some further bullish momentum, but note the
peak of the volume profile with the market makers selling into
weakness once again on ultra high volume. This is the highest
volume of the chart and note the spread of the candle, it is com-
pressed with a deep wick to the upper body and merely adds
further weight to our analysis the market makers are preparing

94
for a campaign lower, and selling here in preparation for such a
move.

The upwards trend continues into session three, but is now look-
ing increasingly weak, as the final phase of selling by the market
makers on high volume takes place on the high of the session
with the deep wick candle and narrow body.

The stage is set and the campaign begins with the price water-
fall developing into session four.

Finally in the last session of the week, we see the pair rally, but
note the associated volume. We have a rising market and falling
volume so this is not going too far, and at the top of the rally
this is confirmed with a very strong signal as the volume soars
and the candle closes as a shooting star with a deep wick to
the upper body. The outcome here is inevitable, and the pair re-
verses and the bearish primary trend is re-established once
more, and down we go again.

95
EUR/GBP - 60 minute chart

session two

good volume

market maker buying

2
1
3 4 5

The interesting phase of price action for the EUR/GBP chart oc-
curs in session two.

Session one sees the pair in congestion with some typical saw
tooth price action and associated volume, but note the candle
with the deep wick on very low volume. A test into an area of
previously high volume. Whilst this was between sessions and
probably in a period of thin liquidity, nevertheless, significant
due to the preceding area of high volume.

The pair then break higher in session two, but the rally looks
weak and is interspersed with high volume on candles with
wicks to the top of the body. Weakness then appears on the

96
high of this session with the narrow spread up candle and ultra
high volume with the pair selling off, However, note the associ-
ated volume in the move lower, it’s falling and suggesting a lack
of downside momentum. This is the classic anomaly of falling
price and falling volume.

The rally higher is on low volume, but then session three begins
with further buying by the market makers confirming their intent
to move the pair higher still. Note the deep wick to the lower
body of the candle on average volume, and repeated two can-
dles later with the pair then rising on generally rising volume,
and supporting the rally higher.

Session four sees the pair move into a congestion phase, be-
fore session five sees the pair break higher on good volume,
and on up to the next level as bullish sentiment continues to de-
velop the primary trend.

97
EUR/NOK - 60 minute chart

note high volume &

rising volume weak price action
in down trend

crossover
1 3 4 5
2

The euro Norwegian Krone cross is another pair where the price
of oil is likely to play an influential role, and even a cursory
glance at this chart reveals bearish sentiment purely based on
the number of down candles and up candles on the chart.

The crossover between session one and session two is light in

volume as expected, with session two then getting underway
and reinforcing the bearish picture with rising volume in the
down trend.

The late rally on falling volume at the end of this phase of price
action reinforces the weak picture, before session three picks
up the trend once more, with rising volume in the falling market.

98
Session four adds further to the bearish picture before session
five finally brings a pause point to the extended move lower.

However, note the high volume in session five on the three initial
up candles with the market makers slapping the market lower,
before a repeat performance late in the session, and given the
weak picture and heavy selling in session five, expect more to
come in the longer term.

99
EUR/SEK - 60 minute chart

market maker
buying starting
market
makers
solid
selling
volume two shooting stars
and hanging man
1
2 3 buying climax
4
5

The euro Swedish Krona is not a heavily traded pair, but once
again is a pair where volume price analysis can be perfectly ap-
plied in all timeframes. If we start in the first session once again,
here we see weakness building in the move higher, with the high-
est volume of this session then appearing on a narrow spread
up candle. The market makers are struggling here and selling
heavily into a weak market. At the top of this rally we see further
selling on high volume and a narrow spread candle once again.

The bearish engulfing candle then follows, and sends a further

confirming signal this pair is looking weak. The overnight ses-
sion is very quiet as the pair move into a very tight range, before

100
volume picks up in session two, and the bearish trend gathers
momentum and pace.

Session three then sees further weakness develop, and here we

can see two shooting star candles on high volume with a hang-
ing man candle sandwiched between. The hanging man candle
on high volume is sending a strong signal that selling is once
again hitting the market, but the market makers are not ready
just yet, and sell again. We then see a repeat of the hanging
man, this time smaller than the first and adding further confirma-
tion to the weakness now building which duly develops on the
next candle, and on into the price waterfall on rising volume.

Following a quiet period in the Far East and Asia, we see buying
starting to appear from the market makers in session four with
the wide spread down candle with a deep wick to the lower
body and very high volume. Here the market makers are now
stepping in to buy to stop the pair falling further as session five
sees the congestion build. The price action here is developing
into a potential buying climax. Note how each down candle fails
to make any progress lower before the pair rally on good vol-
ume, suggesting the market makers are now preparing to re-
verse the primary trend from bearish to bullish.

101
GBP/AUD - 60 minute chart
weak weak rally weakness appearing

rising volume
strong buying
1 2
3 4 5

Another chart with some classic price action for the GBP/AUD.
And if we begin at the very left of the chart in the first session,
here we have a classic example of the price waterfall, with the
market falling on rising volume and good spreads, and the point
to note here is the attempt to rally before the second phase of
selling begins.

Here we see the narrow spread up candle on high volume, and

a classic signal of further weakness to come. In any price water-
fall, these are the candle and volume combinations to look for
as an entry point if the initial entry was missed. They confirm
this market is weak, and the market makers are simply selling

102
into weakness here, as buyers step in believing the down move
is over, before the institutions take the market lower in their cam-
paign.

Session two begins with a weak rally on falling volume - this is

not going far, and a classic example of the secondary trend
within the primary trend. In other words, the primary trend is
likely to be re-established shortly.

As expected, the trend lower restarts with rising volume before

strong market maker buying arrives on the highest volume of
the session on a deep hammer candle. The rally follows on the
crossover and into session three, before we see a weak shoot-
ing star candle on average volume, and now patience is re-
quired.

The waterfall then continues on rising volume before the final

two sessions move the pair into an extended phase of conges-
tion on average volume.

However, with the tone now set, and no strong signals of mar-
ket maker buying, the bearish sentiment remains firmly in place
and provided the support platform is broken, further downside
price action should follow.

103
GBP/CAD - 60 minute chart

high session
one and weakness
again

1 2
3 4 5

A very similar chart to the previous one, which is typically what

we would expect in a commodity cross pair, but the GBP/CAD
is also influenced by oil by virtue of the Canadian dollar.

Not so dramatic perhaps, but some of the key candles here are
in the earlier sessions where volume is heavier.

Note the high of session one, with the narrow spread up candle
on high volume, which is clearly not a bullish sign. And we can
be assured the market makers are selling heavily here into an al-
ready weak market, so it is only a question of time before the
bearish momentum takes hold.

104
The same occurs in session two where once again the market
attempts to rally, on even higher volume this time, but the mar-
ket makers sell into the weakness on the highest volume of the
session, with the rally looking very weak on declining volume.
The classic rising price and falling volume of the secondary
trend is so powerful and reveals so much. This gives confidence
in holding any position to maximise profits from the developing
trend.

The downwards trend picks up momentum in sessions four and

five, and with no evidence of market maker support or serious
buying, this is a low probability trade on the follow through into
the next session.

This would also be reflected on the 4 hour and daily charts with
the various levels of support and resistance coming into play on
a multi timeframe approach.

105
GBP/CHF - 60 minute chart
the trap

weak rally
first
weakness
and more
weakness

1 2 more weakness
3 5
4

And here we have two further charts for the British pound and
whilst the general trend is the same, the timing lags behind the
two earlier examples.

As we can see the GBP/CHF pair managed to remain range-

bound in the first two sessions, but the weakness is there, and
it is only a question of time.

Weakness appears first in session one, with the up candle and

wick to the top on the highest volume of the session. The mar-
ket fails to follow through, or break above the resistance level.
Session two then delivers further weakness as the market mak-

106
ers sell into a another up candle on ultra high volume. The pair
should have moved more than this - it hasn’t.

Then session three begins with a wonderful trap move on low

volume - the up candle with the deep wick to the upper body.
This is a favourite trick of the market makers to trap traders into
thinking the market is moving higher, and fast. But it is doing nei-
ther, as they themselves are not participating. It is an illusion cre-
ated to trap traders into weak position. This type of price action
is often rapid, and designed to trigger the emotion of missing
out.

The rally of session four looks very weak with increasing volume
on the two up candles failing to deliver any upwards momen-
tum, and so it proves in session five with the deep wick candle
on high volume confirming further weakness to come as the
market makers continue selling into weakness.

The market makers are not buying yet, so expect more of the
same as this campaign has some way to run.

107
GBP/NZD - 60 minute

volatility
candle

shooting
star
buying
appears 3

1 2 note falling
volume 4 5

And the New Zealand dollar completes the set for the GBP com-
modity dollar cross pairs.

Again a similar picture here, and the weakness is confirmed in

session one, with high volume associated with a shooting star
candle as the market attempts to rally. Further weakness is con-
firmed in session two, but it is interesting to note the market
maker buying which then appears mid way through the session
and the market rallies higher. However, this rally is weak. Note
the narrowing spreads on the candles as they rise, and on their
own a simple sign of weakness in any price chart, but here they
are also associated with falling volume, so the anticipation is

108
that this move is not going too far. Once again it is a secondary
trend reversal against the primary bearish trend.

The only other highlight of this chart is the volatile candle of ses-
sion three. Note the volume, or lack of volume. The market mak-
ers are not participating here so patience is required, as well as
‘a wait and see’ approach.

The rally higher is very weak, as judged with previous session

volume, and the selling duly reappears in session five with good
spread down candles and rising volume. Once again the final
rally is very weak on falling volume and narrowing spreads.

109
GBP/USD - 60 minute

then the traps

trick repeated

first they
sell
1
3 4 5
2

Finally we come to the majors and cable, and here we have

some classic traps set for the unwary, or those traders who do
not use volume in their analysis.

The traps are laid as we come out of session two and into ses-
sion three.

First, the market makers need to sell and sell heavily which they
do on the two up candles. The first on the high of the session,
the second on reduced volume, and Cable then consolidates as
volume falls at the end of the session. The ground has been pre-
pared. Next come the traps.

110
First the volume in session three is generally below average,
and we see a rapid move higher with a deep wick to the top of
the candle. The volume is very low and clearly this is a trap as
we only have to compare this with that volume which has al-
ready been printed in sessions one and two.

The market makers continue with a second move higher. Selling

is absorbed and sold into the following five candles, all on aver-
age volume and with deep wicks to the upper bodies. And on
average volume, the price is simply being ‘marked up’ by the
market makers who are not participating.

Once set, the trap is sprung, and weak traders are left stranded
at the highs. The trick is repeated in session five on the wide
spread up candle. After all following such a dramatic move in
price, would we not expect to see some extreme volume here?
We have seen extreme volume earlier on the chart, and so
should expect something similar here. But we do not, so it’s no
surprise to see the pair reverse immediately within two candles
into a two bar reversal. And down we go with more bearish sen-
timent to follow.

111
NZD/CAD - 60 minute

a real shocker
from the
chamber of horrors

pre-emptive selling
note low volume

1 2 3 4 5

This is another chart straight from the chamber of trading hor-

rors - a real shocker, so if you are of a nervous disposition, look
away now.

There are anomalies, and then there are the anomalies we have
here, and although I have referenced this on other charts, this is
classic and worth repeating. It offers us a great lesson, and per-
haps is one of the strongest arguments I can put forward for
learning how to interpret and apply volume price analysis. And
this example should be sufficient evidence alone to convince
anyone who is skeptical of its validity.

112
The focus, of course, is the major volatility candle in the centre
of the chart, with virtually no volume to propel or justify such a
move. This is simply a classic trap move of epic proportions,
and I wonder how many traders eagerly jumped onto this move,
only to regret the decision, and then had to cover their positions
as the market reversed.

And as always, the market makers prepare such campaigns

with great care. Everything is planned in advance, and indeed
much of the pre-emptive selling took place in session two, with
the maximum volume associated with a weak candle.

Note also the candle immediately prior to the volatility candle,

as the pair sells off strongly, but on low volume. Again this is a
cynical ploy to draw traders into a short position too early, and
then take them out on the rapid move higher. Imagine how
many would have placed stops on their short positions, only to
see these triggered on the surge higher. Cynical, but an ex-
tremely profitable insider tactic.

It is interesting to note in sessions four and five how the subse-

quent selling volume falls away as the market has moved lower,
so patience is required as the next move develops.

And as always support areas will now come into play.

113
NZD/JPY - 60 minute

and another
from the
chamber of horrors

1 2 3 4 5

Much the same picture here so I won’t labor the point, and in-
deed this chart offers us another lesson, and one that applies to
many such moves in the forex world, and the point is this.

When trading one currency pair it always pays to watch related

pairs. There are many reasons for this, not least because of the
universality of flows in and out of a currency.

But there is also another reason, as the volume profiles associ-

ated with particular price action can also be very revealing, and
can appear across the pairs, and here we have a case in point.
A check on price action of the other Kiwi pairs would have con-

114
firmed this anomaly, and also confirmed ( just as importantly )
the extreme price reaction was not a glitch on the system.

Glitches do happen, and can be broker specific from time to

time, so it is always worth checking to make sure this is not the
case.

115
USD/CAD - 60 minute

very weak here - price action

and volume confirm

lesson
here
peak volume

and here
1 2 3 4 5

Some solid price action here for the USD/CAD, and if we start
with session one, and an interesting lesson here on the two con-
secutive up candles that follow one another in relatively quick
succession. Both are the same size, and both follow within a
short period, giving us an excellent comparative measure. The
first is on high volume, and second is on average volume. So
what is the lesson here?

And the lesson is the price action and volume suggests a lack
of participation and lack of interest. After all, the price action is
the same, in the same area, and yet on the second candle, the
volume is light. Clearly buying interest has waned here, and the

116
market makers would have taken note. The tactic is to ease the
market first higher on low volume through the Far East and Asia
session, before off we go on rising volume as the market moves
lower and into session two.

Note the peak of volume on the candle in session two with an

attempt to rally, but the candle closes with a deep wick to the
upper body. Once again we see a rally rising on falling volume,
which confirms this weakness, with session three then picking
up the baton of sentiment. Note also the price action in the rally
which always helps to confirm such weakness.

Here the spreads are narrow as the price action rises, and in ad-
dition the last two candles have wicks to the upper body, so are
both strong signs of further weakness to come. And once weak-
ness has been signaled by earlier candles, such a rally within
the ‘framework’ of weakness can be a huge confidence boost
as it is further confirmed with the volume.

Further selling then develops, as we move down into the con-

gestion phase of session five with no sign of any buying by the
market makers just yet.

117
USD/SEK - 60 minute

heavy selling
long legged
doji
selling arrives
early

1 2 3 4 5

Another bearish chart where session one laid the groundwork,

and the subsequent sessions simply followed the longer term
trend.

In this example the initial selling by the market makers arrived

early with the high volume of the session on the narrow spread
up candle, and later confirmed with a clear two bar reversal on
good volume.

The trend lower then begins with heavy selling pressure rising,
before a weak rally on falling volume tries to bring the move to a
halt. This fails as selling pressure builds once again in session

118
three, with the market makers moving in to buy before distribut-
ing again in the two bar reversal immediately after.

The long legged doji candle in session four is interesting, as it

does signal insider participation, but with no clear direction, and
whilst the initial move is to the downside, this is immediately re-
versed and takes the USD/SEK back into the congestion area.

This is repeated in session five, so further congestion awaits

with patience now required as we wait for the next move to de-
velop from this region. Note however in the final session how
the rally seems to lack conviction, with narrow spreads develop-
ing once again and on high to above average volume, so this
looks weak. In addition the price also ran into the resistance cre-
ated by the congestion, so adding further weight to this analy-
sis.

119
USD/TRY - 60 minute

doji candle on
high volume two bar & shooting
star !
sudden spike

1 2 3 4 5

And onto one of the exotic currency pairs with the Turkish Lira.
Not perhaps quite as free flowing as the majors and cross cur-
rency pairs, but nevertheless volume price analysis provides the
insight to trade these less liquid pairs with confidence.

Session two is perhaps the most interesting with the sudden

spike in volume on an extremely small spread candle suggest-
ing weakness ahead, that was duly delivered on the down can-
dle on the highest volume of the period. Note also the doji can-
dle preceding the two wide spread down candles.

We have high volume and wicks to top and bottom. And whilst
the direction cannot be guaranteed off this candle, the volume

120
spike earlier in the session gives us a clue the break is likely to
be to the downside and not to the upside. We can also be as-
sured the market makers are participating here, but have to wait
for confirmation of direction.

There is never a guarantee of direction when trading, which is a

reason why looking to the left of the chart all the time can help
to provide confirming signals of what you are perhaps seeing at
the live edge, and which may not be immediately clear. And a
doji candle such as this is one example.

121
USD/ZAR - 60 minute

weak rally market makers step in

weak
market
makers
selling

1 2 3 4 5

Finally in this section of pairs on the 60 minute timeframe we

come to the USD and South African Rand pair which is popular,
as it is one of the many currency pairs that offers higher yields,
but one which can also be very volatile. It is a pair which is also
sought out when risk on sentiment is prevalent. So it can and
does move very quickly, but is also likely to reverse just as fast.

Session one is weak, with the initial support from the market
makers then converted into selling on session high volume with
two repeated efforts to rise confirming one another. Session two
sees a weak rally, and is again one where the price alone gives
strong hints as to the fragile nature of the market. This is fol-

122
lowed by heavy selling on rising volume, which continues into
session three, but then subsides as the volume moves to aver-
age levels.

The subsequent rallies higher do look weak, but nevertheless

are sustained with the market makers moving in during the mid
point of session five. They buy following the selling pressure in
the down candle, and drive the market higher, but on falling vol-
ume once again.

The rallies look weak, and given the lack of market maker accu-
mulation or significant buying, a further move lower seems
likely, and of course much will also depend on the broader con-
text of the USD, and its tone for this pair.

123
 Section Three - 15 minute charts

In this section we move to the 15 minute timeframes and once

again all these examples are from the MT4 platform.

Here the comparative nature of volume across sessions be-

comes less of an issue, other than when we are at the crossover
itself. For example, when we move from the Far East and Asia
into the London session, we do have to be careful in making
any comparative judgements between the two.

There is a workaround here, which is to have enough of the

chart displayed so we can compare the volume at the start of
the London session with the start of the prior day’s London ses-
sion. This gives us our benchmark, and so we are comparing
volume in the same session. As the first few candles build we
can then look back and compare volume in the same session.
In addition, another way to deal with this issue is we can step
down to a faster timeframe, and use this as a quick reference
guide to how volume is building on our fifteen minute chart as
the session unfolds.

124
AUD/CAD - 15 minute

candle one

reaction arrives
on news

Having looked at a series of examples on the hourly chart, it’s

now time to drop down to a faster timeframe and look at vol-
ume price analysis in action on some 15 minute charts.

And as with all price action, this is simply an expanded view of

the hourly chart, as well as a compressed view from the other
end of the telescope, namely a fifteen minute chart.

For the first part of the chart, the AUD/CAD pair drifts lower with
volume rising and falling gently through the various phases.
Then the reaction arrives on high volume with two strong up can-

125
dles which looks very positive, but the following candle reflects
weakness as it is a hanging man.

In this case there is no precursor of weakness, so whilst it is

easy to make this judgement with hindsight, leading edge analy-
sis would have been more difficult, as at this point you could
not be certain on direction.

However, once the waterfall develops it is on high volume and

on breaking below the platform of support, then invites a lower
risk trade with a more certain outcome. The two candle reaction
higher was almost certainly on news, and at such times it pays
to wait and be patient and either trade the fade or wait for confir-
mation of the trend.

The trigger for joining the move here might have been the break
below support, and in addition we also have some strong sig-
nals lower down in the price waterfall, such as at candle one.
This is the classic ‘attempt to rally’ with the market makers sell-
ing heavily into the weakness, thereby creating the wick to the
upper body of the candle. Then off we go again. So always
keep an eye out for this type of candle, and when supported
with good volume, can provide a confident entry point, or even
the opportunity to scale in.

126
AUD/CHF - 15 minute

nice signal

market makers
moving in here in
volume

Here we have a similar price chart to the previous one, before

an injection of volume over a three candle arrangement comes
in, but for this pair, the weakness is much clearer.

The first candle is indecisive, and it is impossible to judge which

way the market is going to react to the volatility (probably from
news) given the violent oscillation, and deep wicks to both top
and bottom, so patience is required.

Then we see the second candle. Again we have very high vol-
ume, but on a narrow doji candle which looks more promising.
Then the third candle arrives, again on very high volume, but the
spread is narrow. After such an injection of volume we should

127
have expected to see the market jump higher, not least because
we have seen the same price spread achieved with less than
half this volume earlier in the session, therefore we can con-
clude the insiders are selling here, and also selling in the preced-
ing two candles. And the hanging man also confirms this view.

The waterfall then develops, before we move into a short con-

gestion phase, and it is at this point that any decision to enter
could be taken. As we have seen in several other examples, the
key candle is the weak attempt to rally on good volume. This is
where the market makers are selling into weakness. Remember
too, there are many traders who always buy on dips, so there is
always a plentiful supply of willing customers for the market
makers.

This is always a nice signal to see, and will give you the confi-
dence to join a move which is underway, and at a congestion
phase. The volume under this candle is high, and it is therefore
only a question of time before the move lower continues. Here it
is on the next candle. It may take longer, but these are great sig-
nals in the down trend, and great confidence builders.

128
AUD/JPY - 15 minute

once support is
broken - volume
rising

Patience, patience, patience...it always pays off in the end, but

is so hard to do! Here is a great example where patience is re-
warded, and the chart requires little in the way of an explana-
tion.

But, I would say is this. The key is to wait for the support or re-
sistance level to be breached, and then consider the volume. In
this case, once it has been broken, the volume starts to rise in
classic fashion with wide price spreads developing and confirm-
ing the bearish trend, and once this is underway, it is simply a
case of deciding where and when to take a position in the mar-
ket.

129
The rallies look very weak, and there is no diminution of volume
in the down trend. However just as important, there is no evi-
dence of any market maker buying either.

Volume will always give you the confidence to enter these posi-
tions, and all that is required is patience, which is the most diffi-
cult part.

130
AUD/USD - 15 minute

focus is here

weak rally

And so to the Aussie major, and whilst you may think the price
action here is the same as before, there is one important differ-
ence.

Here we have a news release, and two 15 minute candles, with

the volume on the second candle only marginally lower than on
the first candle. Is this important? And the answer is most defi-
nitely yes.

The first candle has seen the price move by a factor of five,
with this amount of volume. But the second candle has only
moved by a factor of two with an almost identical amount of vol-

131
ume. So is this a good sign or a bad sign? Clearly, something is
not right here. If the first candle is the yardstick for our volume,
then the second candle looks weak, and would suggest the mar-
ket makers are selling heavily.

Indeed the wick of the first candle hints at weakness and sell-
ing, but is more likely profit taking by those who took positions
ahead of the news. The second candle has a smaller wick, but it
is the volume which is the key point here and the spread of the
candle which is so much smaller than the first.

The third candle then arrives, and is a hanging man on high vol-
ume. The first sign of selling which the market makers then
move in to buy to ‘prop up’ the market.

Then the price waterfall develops with a typical weak rally on

high volume at the first stopping point in the move lower, once
again giving us a strong signal for any entry. In addition this also
gives the confidence to hold if the entry was taken higher in the
move, as well as the option to scale in. Either way, the applica-
tion of volume price analysis will either help you to stay in and
maximise any profit, or enter with confidence and then build a
position. Both are equally important.

132
CHF/JPY - 15 minute

further weakness

entry signal
initial upthrust

two bar reversal

A neat example of the break out trade, and again one where pa-
tience is required. Congestion breakout trading gets a bad
press, but if the move is corroborated with volume, this con-
firms whether the breakout is true or false.

The preceding price action gives us various clues and signals

along the way, but with the two bar reversal, wick topped can-
dles, and generally weak volume on the rallies higher, the ceiling
of resistance looks to be building.

And again we have a clear example of the upthrust in secondary

congestion which signals weakness, and the subsequent move

133
lower. But please don’t think for one moment these will always
appear - they do not, and not as helpfully as here with the mar-
ket breaking lower following the hanging man which comes im-
mediately after.

Nevertheless, they are extremely strong and valuable signals

and when confirmed with high volume, even more so.

And indeed as I was writing, I then noticed a further signal at

the next pause point below on even higher volume. And the rea-
son these appear is very simple. It is the market makers selling
into weakness, and preparing for the next leg down. So keep an
eye out for these signals in the price waterfall - they are invalu-
able and great confidence builders.

134
EUR/AUD - 15 minute

long legged doji

two up candles

further buying
note price spread

It’s nice to be looking at some price action going the other way
this time, but a tough chart to read. It is easy to read with hind-
sight, but not so easy at the live edge of the market, so let’s
take a look.

The first period of price action is more straightforward. The

move away from congestion on the left looks a little weak on fal-
ling volume, but is supported with average volume on the
pause, before moving higher with the up candles on average vol-
ume. A further long congestion phase then follows, with a two
bar reversal capping gains, before we see a further weak rally
up and into the major volume area. First comes a long legged

135
doji candle on extreme volume, which is followed by two down
candles on high volume. However, note the second candle and
spread which is much narrower than the first. If the first candle
and volume is our benchmark here, then the second candle, on
much the same volume, is suggesting buying here by the mar-
ket makers.

After all, if they were selling, then the spread of the candle
should be much the same as the first. It is not - in fact it is half
the size on similar volume and so gives us a strong signal the
market makers have stepped in to buy. There is no wick to men-
tion to the bottom of the candle, but this is not always the case
as we can see here.

This view is further confirmed by the following candle, which is

narrow in spread, but on very high volume. This certainly con-
firms the market makers are buying once again, and the follow-
ing candle adds further weight. This is a signal of buying and is
much the same as a gravestone candle at the bottom of a sig-
nificant fall. It is the same here, with buying now appearing, and
confirmed with further buying as we get underway in the trend
higher.

136
EUR/CAD - 15 minute

climactic
price action here

The focus of attention here is on the climactic volume towards

the right of the chart.

Once again the price action reveals a great deal, but it is volume
that gives us the complete picture.

The first candle forms on ultra high volume, but with a wick to
the top and bottom, so we certainly have strong buying, but
with some indecision and selling. But one thing we can be sure
of is the market makers are certainly participating in the price ac-
tion. The next candle then builds, and closes with a deep wick
to the top, with the close coming half way down the candle.

137
On such high volume this is a strong signal of weakness. As al-
ways try to imagine what this price action and volume profile
would look like on a faster chart. For example on fifteen one min-
ute candles or three five minute candles, which would reinforce
and expand the view of this single candle.

This candle is then engulfed, and the downside momentum be-

gins on high volume, and is confirmed in the two wide spread
down candles before we see the market makers step in at a
lower level where some buying arrives, and we move into the
classic congestion phase as the volume dies away.

And any strong move through the floor of support will then ex-
tend the bearish momentum further.

138
EUR/CHF - 15 minute

strong two indecision

candle
reversal

This example is similar to the previous one, but is one where the
candle arrangement is slightly different. The result is much the
same, although the bearish momentum fails to follow through to
quite the same extent.

Remember also here, the surge in volume will have scaled back
the preceding volume bars accordingly, so whilst it is below av-
erage on the chart, at the live edge, and ahead of the market
market selling, it would have been above average and even
high. This is always important to remember when viewing charts
in this way as extreme volume, as here, will always impact what
has gone before, and of course, what comes after, and is a case

139
of where we have to ‘recalibrate’ our view of volume as the fu-
ture bars unfold.

This issue is also very common at the crossover periods, from

the Far East and Asia into Europe and London, where we have
to wait a few bars, before we can judge what is high, medium or
low once more.

So in this case, the trend higher was a solid move, with only mi-
nor weakness towards the end as the volume trend gently de-
clined in the move higher. Remember too, the remit of the mar-
ket makers is to make money for themselves and not you, and
in doing so they know where they are heading next - in ad-
vance. You will often see this positioning ahead of any eco-
nomic data or release. If the market is moving strongly in one di-
rection prior to the data release, it is often the case it will re-
verse on the news. And we would do the same given the
chance.

On this chart we see another very strong two bar reversal with
wicks to the top on high volume, but no follow through. Indeci-
sion follows, and then down we go, and into the congestion
phase.

140
EUR/GBP - 15 minute

selling pressure
falling

the move begins

market makers
move in strongly

One of the facets we often forget as volume traders is the infor-

mation conveyed in the congestion phase, and here we have
some classic examples. Yes, these are flattened a little by the
surge later, but nevertheless are perfect examples of what I
mean.

Whilst it is often obvious when we are in a congestion phase,

the start of one may be less obvious, so what volume will con-
firm is the lack of participation by the market makers.

The section of price action to the centre of the chart describes

this very well.

141
The narrow spreads are confirmed with very low volume. The
two complement one another perfectly, and all that is required is
patience. The price action reveals congestion, but the low vol-
ume reinforces the message for us.

The pair then breaks higher with selling pressure falling in the re-
versal, but note the volume. Here we see a falling market and fal-
ling volume, before we see a huge injection of buying from the
market makers as they move in strongly. The market maker buy-
ing is self evident here on the highest volume of the session, on
the very deep wick to the lower body of the candle.

Drag the market lower first, then buy and drive it higher fast - all
on one candle. The drive higher is not straightforward as they
are hit with selling on the way up, but they continue to drive the
market higher and into the top on exhaustion volume.

142
EUR/JPY - 15 minute

and the campaign

lower begins

selling climax
weakness :-)

buying climax

This is a great example where we can see all the climactic price
action, and how it develops, and how it follows into the next
phase of price action.

First we see the effort required to reach the top of the hill, the
selling climax, and the exhaustion that follows as the market
rolls over, and falls all the way back down again. It’s what I refer
to as the soufflé effect. The market rises quickly, and then col-
lapses just as fast.

If we start at the left of the chart, the weakness in the rally be-
comes increasingly apparent the higher we go. Note the steps

143
as the pair move higher, with the down candles following each
rally higher, but duly supported by the market makers, before
they push the pair up to the next level. Effort to rise, and then
the fall as sellers take their profit with the market makers step-
ping in to buy in order to take the move on up to the next level.

You can see this clearly depicted here. As the rally stalls, so the
depth to the wick on the final candle signals buying from the
market makers. The campaign has not been completed yet, and
is reflected in the volume as they step in.

Then we move into the congestion phase, and the volume falls
away. This is classic, and is often something we forget as vol-
ume traders. Yes, we are always looking for the traps, the high
and low volume, but when the congestion phase starts, look for
confirmation in the volume. If the congestion is genuine then the
market makers will be sitting it out, and waiting to start the next
phase of the campaign.

Then we are off on rising volume as the primary bullish trend is

reversed into a primary bearish trend. Note also in the trend
lower how the small ‘upthrust’ candles confirm both the weak-
ness now in place, and also provide excellent opportunities to
join the trend as it develops. And down we go again with a re-

144
peat on the next rally. The primary bearish trend then starts to
come to an end as the market makers step in once more, this
time to buy as stopping volume appears and we move into the
buying climax at the bottom of the chart. This is the classic
price action and associated volume we expect to see in the buy-
ing climax. The deep wicks to the lower body of the candle sig-
nal market maker buying as momentum is removed from the
move lower. Further mopping up then follows before we are off
again into the next phase of price action, as the trend reverses
once again.

This is the cycle of price action we see described in all time-

frames, and is the classic Wyckoff cycle, from the selling cli-
max, to the buying climax and back again, and described here
in a very simple example on the 15 minute timeframe. But this
could be any timeframe you care to choose.

145
EUR/USD - 15 minute

market makers
move in

narrow spreads and low

volume in the congestion

A further example of the relationship we expect to see between

congestion and price action, not simply from a volume perspec-
tive but also from a price perspective which is just as important.

Throughout the congestion phase, the spreads remain narrow

and on any reaction lower or higher the volume is in agreement
here. This simply confirms the market makers are not participat-
ing, but then neither are they playing any tricks, and whilst we
tend to focus on the directional aspects of trading, trading a
range is equally valid. It all depends on your strategy and tactics
and what suits you.

146
in this example, we could be in a binary option, with a tunnel or
a one touch, no touch. We could have an option in play, and
waiting for an expiry. We could have taken a position on the an-
ticipation of volatility. All are valid.

Once this phase of price action comes to an end, it is signaled

with insider participation as the institutional market makers
move in strongly to drive the pair higher on very strong and ris-
ing volume, before topping out in classic style and reversing the
pair almost immediately leaving many traders trapped at the top
on the expectation of further upside momentum. It’s a cruel
trick, which is why you need volume price analysis to help and
guide you from the inside out, and this is such a clear illustra-
tion of the extremes of volume. From the very low, and a lack of
participation, to very high where the market makers are in full
control.

The shooting star candle on extreme volume is a clear and une-

quivocal sign of weakness, which appears over the following
phase of price action.

147
GBP/AUD - 15 minute

mini repeat

perfect heavy
selling
and now
market makers buying
step in

And here on the 15 minute chart for the GBP/AUD we have

some further excellent lessons.

If we start at the left of the chart, the initial congestion phase

builds before the market makers step in on the wide spread up
candles, and inject some momentum into the move higher. How-
ever, three signs of weakness appear relatively quickly.

First the spreads are narrowing. Second the candles have wicks
to the upper body, and third the volume is falling. We then see a
‘mini repeat’ of this price action with the three up candles again
on narrowing spreads, and on average volume that is relatively

148
flat. In addition, the second candle in this sequence has a deep
wick, with the third candle narrowing with wicks to both top and
bottom.

The pair then weaken, and note the efforts to rise on very low
volume in each minor rally as the move lower develops. Finally,
we see some buying appear with the rally, before the major sell-
ing commences with the very well defined shooting star candle
on the highest volume of the session. This signal is so clear it
would be hard to miss, even for those traders with only a pass-
ing understanding of volume price analysis.

The waterfall starts with stopping volume then appearing as we

reach the bottom, and the ‘mopping up’ phase commences, be-
fore we are off again to the upside. But note the volume under
the wide spread up candles - it is falling, and is only average, so
this move looks to be running out of steam, which proves to the
case.

149
GBP/CAD - 15 minute

hard to miss
note how the signals
ground is prepared

Another top which marks the end of an extended congestion

phase, and the signals here are clear and unequivocal, and truly
reveal the power of volume price analysis.

But what is also interesting here is the price action in the run up
to the climactic volume as the market makers step in. If you no-
tice in the congestion phase, the price action already looks
weak with wicks to the upper body of several candle as we ap-
proach the dramatic price action, which would have been asso-
ciated with a news release or statement. And it is naive to think
the insiders and market makers do not have prior information of
any news or data driven events, and you will often see this put

150
to good effect prior to any release. The campaign here is to
short the market, and the selling prior to the release is simply
the market makers preparing the ground.

Then as the news is released they move the pair rapidly higher
before selling into the weakness, and repeat this on the second
candle, again on extreme volume. Such signals are so clear, and
hard to miss, and confirmed immediately with the next candle,
which is a wide spread down candle on high volume.

Once confirmed it is simply a question of when to enter a short

position. After the initial down candle on high volume, which
confirms the insider selling, should we enter before it starts, or
after the price has broken through the support platform? And
here it is a personal decision based on individual risk appetite.

And with no stopping volume appearing at lower levels, it is also

valid to wait and enter the trend as it develops further. There is
no right or wrong answer, just the one that suits you, and your
attitude to risk.

151
GBP/CHF - 15 minute

first candle not clear

third confirms

nor the second

A similar example to the previous one, but not so clean and

clear, and indeed this raises a further important point and it is
this. Often within a currency complex one chart for a pair may
be less clear, whilst another may offer much clearer signals, or
clarify what we see on our first chart.

Naturally this is not always the case, and also assumes the senti-
ment for the currency under consideration is universal across
the complex. But again this is not always the case. Neverthe-
less, this is always something to consider, and is another reason
to use both multiple charts, and multiple pairs for validation and
cross checking.

152
In this case, the first candle is perhaps not clear. We have ex-
treme volume once more, but the candle has wicks to both top
and bottom giving us a signal of indecision and from which any
conclusions are hard to draw. So we wait. The next candle sug-
gests bearish sentiment may be in the ascendancy given the ex-
treme volume once more, but perhaps the wicks to top and bot-
tom are of concern here.

The probability is it is heavy selling, so we have to be patient

and wait. Candle three then really delivers the answer with no
debate, and off we go on another strong move lower.

And as always after a strong move, the market then moves into
a congestion phase.

153
GBP/JPY - 15 minute

market makers
buying ahead of the release

I’ve added this example as it was one I was trading at the time,
and is also a perfect example of two things.

First, the market maker positioning ahead of news, and second

the fact they have an insight into the release ahead of everyone
else. This should not be a surprise, and you will see this all the
time. The institutional market makers are like Japanese knot-
weed - their tendrils are everywhere, and it is difficult to imagine
they would not have access to the details somewhere!

The focus here is on the right hand side of the chart, and the
price action immediately preceding the rally. The news release

154
was on the wide spread up candle. However, note the three
down candles, and the strongly rising volume. This is insider
buying, and positioning ahead of the news. What does this tell
you? They are buying. That’s what it told me. So I bought too.
Then the rally started with the injection of momentum on the re-
lease itself, which was Retail Sales and Jobs on this occasion.
Surprisingly both were better then expected, and the pair
soared higher on GBP buying.

You will see this all the time ahead of a release. So do the insid-
ers and market makers have an insight on the data? What do
you think.

155
GBP/NZD - 15 minute

true direction revealed

no participation
then buying

Doji candles come in all shapes and sizes, and the long legged
form is just one type.

As I have said before, it is impossible to gauge market direction

from this candle, which generally appears as a result of volatility
on news, or from market maker manipulation or both. The only
conclusion we can draw is from the volume, but not make any
assumptions on direction.

If the market makers are participating, then all we can conclude

is simply that, and we must wait for them to reveal their hand
with any move away from the price region. If they are not in-

156
volved, then the prospect is it is a trap, and armed with this
knowledge we can then view the next phase of price action with
a healthy degree of skepticism.

On this occasion, it was more a question of the latter rather

than the former, with the GBP/NZD pair rising on falling volume,
and the move containing several two bar reversals.

The true direction is only revealed as the market makers move

in to sell heavily, before buying at the bottom to reverse the
trend into congestion, and a short term rally higher. But the rally
higher is associated with falling volume, so it is no surprise to
see this run out of steam as we approach the right hand side of
the chart.

157
GBP/USD - 15 minute

selling in the patience

wick

And here we have another example of the doji candle in action,

and one where a little patience is required.

The congestion phase has built before the surge in volume ar-
rives on the wide spread up candle which closes with a deep
wick to the top. The market makers are in town.

This is a good solid candle with the highest volume of the day,
but there is selling at the top with the wick. This could simply be
profit taking, so caution is required. Then comes our doji can-
dle. Is this buying or selling?

158
We cannot be sure so best to keep our powder dry for the time
being. Then candle three arrives, and really confirms with
strength that this is indeed selling, and the price waterfall then
develops nicely.

Doji candles appear in all timeframes, and come in all shapes

and sizes, and the larger they are the more difficult they are to
read. So don’t try to do so. Wait for the trades to come to you.
They will, and it’s that word patience again. And just to remind
you once again, a doji candle is not a signal of a reversal. In this
case it was, but this may or may not be the case when a candle
such as this is created. All it confirms is indecision, and we have
to wait for the direction to be confirmed in due course.

159
NZD/CAD - 15 minute

focus here

long legged
doji

More long legged doji candles here also, but the price action I
wanted to focus on is to the right of the chart as the market
makers move in with volume.

And it is a chart where once again patience is required. In this

case there is no reversal, and no particular change in trend, sim-
ply a continuation of the congestion phase, which has a mildly
bearish tone building thereafter.

But when we move to the right of the chart and the first major
up candle, this looks solid enough. We also have the highest vol-
ume of the session, and the wick to the top of the candle sug-

160
gests profit taking which is to be expected after such a strong
move. The second candle then builds with no wicks this time,
but the price action is substantially narrower than the previous
candle. And whilst this looks weak, we still cannot be sure.
What we can be sure of is that this is an anomaly, because such
effort should have seen the pair close with a much taller candle.
We have not, and so we can conclude this looks very weak.

The next candle then forms with the deep wick, but is this buy-
ing or selling here? Well the candle suggests a hanging man,
and the first sign of selling. What is happening here is selling
has arrived, but the insiders have bought the weakness in order
to push the price back higher.

Then comes the narrow spread up candle with a wick to the top
which is a more conventional sign of weakness given the sub-
stantial volume below. Then comes another hanging man - in-
creasing our belief this pair is preparing for a move lower. Then
the first down candle appears on high volume, with a further
much stronger signal confirming the previous candles, and clos-
ing with the deep wick candle alongside.

We are now primed, and ready for the move lower.

161
NZD/CHF - 15 minute

focus here

And I thought I would add this chart as a further example where

we have to wait for some clearer signals to develop.

The initial extreme volume drives the market higher, but we have
wicks to top and bottom, so the message here is not clear. The
following down candle hints at selling, but even here we have a
wick to the lower body of the candle, not large, but enough to
make us suspicious.

The market moves higher, but on relatively narrow spreads, be-

fore more selling appears, and at this point we would still not be
certain. Then the next up candle arrives with a narrow body and

162
a wick to the top on much higher volume, and really does de-
liver a much stronger confirmation of weakness. But perhaps
not enough. This is followed by another down candle on good
volume, a narrow spread candle on below average volume, a
hanging man, and finally an upthrust on above average volume.

The market finally breaks, and at this point really does confirm
the bearish picture. But this has taken almost three hours to
build, and not something we might wish to wait for as a scalp-
ing trader.

As always, if you are not sure, wait for a more demonstrable can-
dle with volume to appear. If it confirms - that’s great. But if not,
you have lost nothing.

163
NZD/JPY - 15 minute

eye drawn here

Once again it is the congestion phase where the trend is devel-

oped and launched, and once these areas begin to build, it is
only a question of when, and not if, the market will then trend.

The NZD/JPY is also one of the primary pairs for the carry
trade, and like other yen pairs will be subject to hot money
flows as speculators seek out higher returns. And despite the
‘race to the bottom’ the NZD still retains some differential, but in-
creasingly the exotics are being sought out to provide more at-
tractive returns.

164
The candle my eye is instantly drawn to here is in the secondary
congestion phase as the price waterfall begins. After the initial
two candle move lower, the pair rallies over three up candles.
We then have a down candle, and finally the upthrust candle on
very high volume, which is hugely significant given the preced-
ing candle.

It is the final signal of the market makers selling into weakness

before dropping the market once more. Hunt these candles out,
and if the volume is high, they will give you the confidence to
get in when you are ready, even if you missed the initial entry, or
had decided to wait for the trend to develop.

165
NZD/USD - 15 minute

focus here
again

And further examples here in slightly different areas of the price

waterfall.

The initial wide spread up candle is extreme, but the volume is

ultra high so this looks fine, despite the wick to the top of the
candle. However, the problem with all such extreme candles is
deciding on the volume, and whether this is in agreement.

In other words, we have no immediate benchmark and given the

preceding volumes, this looks a little ‘lightweight’?

166
And remember this is another favourite trick - to move price out-
side of its average true range, and then reverse it almost immedi-
ately.

This candle is followed by a long legged doji candle but we can-

not draw any conclusion, other than the market makers are par-
ticipating. There then follows a hanging man, highlighting weak-
ness followed by a weak up candle, and a second hanging man.
Now we have a strong sign of weakness. The first down candle
appears followed by a big upthrust candle on high volume. This
really confirms the weakness, and on the recovery rally in the
secondary phase, another upthrust candle appears on high vol-
ume.

The market falls fast, and ultimately into the congestion phase
as the volumes subside.

Remember too with such wide spread candles, that when this
type of action develops, with moves outside the average true
range, price action will often revert inside the spread of the can-
dle. And the reason is because it is often associated with mar-
ket maker participation, or a lack of participation, and will result
in a subsequent reversal.

167
USD/CHF - 15 minute

clear air turbulence

There is no warning here, either at the top or the bottom, so is a

move that can best be described as clear air turbulence.

This could have been news or data so was probably expected,

but nevertheless the reaction is instant, with the move ending in
two major candles. There is no reaction higher and no pause or
distribution areas, just an immediate drop in two candles.

Equally at the bottom there is little to suggest we are about to

witness a strong recovery back to the original open of the move
in a relatively short space of time. And perhaps one of the most
difficult things to do here is to trade in the rally higher. Because

168
your emotional conscious mind will be reminding you of the
speed of the fall.

And I included this example for just this reason.

Volume price analysis is not the panacea for every situation, and
moves such as this can and do occur. This was a tough one,
and would have caught many traders out on both sides of the
market. The only way to trade such moves is by using multiple
timeframes, which can help to provide an alternative perspec-
tive not only on the price action, but also the volume profiles,
which will then offer that all important ‘alternative view’.

I cannot stress this too strongly, as considering charts in more

than one timeframe then gives us a very different perspective
and will reveal so much more than a single chart.

169
USD/MXN - 15 minute

clearer signals of
buying here

And here we have an exotic pair where so much more is likely to

occur.

Once again it is the move lower which takes hold immediately.

The long legged doji candle at the pause point is not helpful,
other than to signal market maker participation.

And the move continues lower on another wide spread candle

on ultra high volume.

Finally, on this occasion we do receive a much clearer signal as

a deep hammer candle on very high volume signals the market
makers moving in to buy heavily, and after a short pause on an-

170
other doji candle, drive the market higher and quickly on very
high volumes. But following the two wide spread up candles
weakness then appears, but this is supported with further buy-
ing, and on up we go to the top of the rally and into old conges-
tion areas.

Not a simple example, and far from straightforward, but one

where the buying was clearly signaled with lower uncertainty on
the trade as a result.

171
USD/NOK - 15 minute

weakness reappears

note high volume

widening
upthrust
spreads and rising
volume

Back to calmer waters...and oil! And this is a super example of

many different aspects of volume price analysis in action.

First of all let’s start with the congestion phase on the left of the
chart. Here we see the classic relationship between price and
volume in this phase. The market is waiting, and the spreads
are narrow and moving in a very tight range, with the volume in
agreement throughout, as it is well below average. This is what
we expect to see.

The market makers are sitting on the sidelines here. They are
not playing tricks, but simply watching and waiting, and no
doubt preparing their next campaign.

172
Then we see a possible break to the up side with an increase in
volume, but this looks weak as the selling knocks it back with
no clear close above resistance. Note the high volume on the
upthrust as the market falls and tests this region.

There is a further attempt to rally on the wide spread up candle,

but the volume is relatively low, and indeed marginally lower
than the previous attempt to rise, so with no follow through the
pair rolls over again. And note the falling volume into each rally,
it is getting weaker and weaker. Then the pair begins to break
below the support region, and gather momentum on rising vol-
ume, all classic signals.

The market makers then move in to buy on the up candles, but

look at the effort to rise - enormous volume, wicks, and narrow
spreads. Weakness reappears as a result with the upthrust
atop on high volume.

The two candle reversal off the low does see the market re-
cover, but on falling volume into the end of the session.

173
USD/SEK - 15 minute

strange volume
and price action

clear buying again

by market makers

Another exotic currency pair, and an example of the candles

and price action that can appear on such a pair.

The first to note is the strange price action to the left of the
chart, and in particular the gapped down up candle on very low
volume. The subsequent candles are also unusual in that the vol-
ume is hardly visible, with volumes only returning to more ‘nor-
mal’ levels in the ensuing congestion phase.

The remainder of the price action is very similar to the previous

chart for the USD/NOK, so I won’t cover this in detail. Only to

174
say that once again the buying was clearer on the hammer can-
dle at the base of the price waterfall.

If you are trading these pairs, you will find such price action oc-
curring from time to time so don’t be surprised.

These are volatile and often illiquid pairs, with gaps both up and
down as the price action often does not flow immediately from
open to close. Volume still holds true with such pairs, but with
thinner liquidity can be more spiky and in some ways is similar
to the price action and volume associated with penny stocks or
pink sheet stocks, or the less heavily traded futures contracts.
Bitcoin futures would be one topical example where price action
can be spiky with gaps and sudden changes in volume.

175
USD/ZAR - 15 minute

rising on falling
volume
bearish
engulfing

market makers note

buying
candle 3
candle 4

Once again we have volatile price action, this time with the
South African Rand. This is another of the exotic currency pairs,
but a popular one nevertheless given its association with the
price of gold, and one that is increasingly available on the MT4
platform.

However, like many other currency pairs of this type, the pair is
subject to volatility, and hot money flows chasing yield, which is
great if you are on the right side, but not so good if you are
caught out on the wrong side of any position.

176
We have some excellent price action after the move lower at the
end of the congestion phase, as market maker buying appears
on good volume with the hammer and narrow spread candles
before the rally starts, and rises firmly, but on falling volume.

Note at the top of the rally we have a bearish engulfing candle

which, like the two bar reversal, is often associated with a rever-
sal in trend, as is the case here. But what is interesting here in
the move lower are the four down candles.

First we have the bearish engulfing candle, on above average

volume. Then we see three down candles where the volume is
almost identical on each. This sends us a very clear and une-
quivocal signal the market makers are buying here. Why? Be-
cause for the same effort we should expect to see the same re-
sult, according to Wyckoff’s third law.

But we are not seeing this on candles three and four. In both
cases the spreads have narrowed dramatically, and this can
only mean one thing. The market makers have moved in to buy
with stopping volume, and so it proves, with the pair rising
strongly on very supportive volume. However, note the up can-
dle in this sequence with the deep wick. Selling pressure is en-
tering the market and making life difficult for the insiders.

177
The bearish engulfing candle signals the end of the rally, follow-
ing a weak up candle.

178
 Section Four - 5 minute charts
In this section we move to the five minute timeframe, and here
the issue of the comparative nature of volume at the crossover
periods becomes less of an issue. Because once the first three
or four candle have been built, we then have a very good bench-
mark for our volume in the new session, so it’s more straightfor-
ward.

The five minute chart is also an excellent timeframe for learning

to apply volume price analysis at the live edge of the market. It
is the perfect timeframe - not too fast and not too slow, and is a
great way to learn. And whilst you can choose any pair to do
this, I would suggest some of the more even paced majors such
as the USD/CAD, the AUD/USD and the GBP/USD (once the
Brexit brouhaha has calmed!). These are excellent pairs, and
any demo account with MT4 or any other platform gives you
the tools you need - just volume and price.

179
AUD/CAD - 5 minute
more weakness
three up candles

weakness ?

looks weak

And so to an even faster timeframe, and here I have put to-

gether a collection from the 5 minute charts. The principles how-
ever are exactly the same, as I’m sure you appreciate.

We start at the left of the chart with a strong move away from
congestion with the market makers participating on very high
volume. The first two candles are in agreement with high vol-
ume and solid price action, and no wicks to the top of either
candle. But the next candle suggests some weakness. More vol-
ume arrives on the subsequent candle with further weakness on
the candle with the wick to the top. Finally at the top we have a

180
two bar reversal, which immediately reverses the pair to the
downside.

We then see some further weakness on high volume, but no ad-

vancement in price. There is a small move lower, and yet more
weakness on the three up candles, one after the other, and all
on high volume, very narrow spreads to the body, and with
wicks to the upper body. This is certainly not a sign of strength,
and a reverse is building here.

Then the bearish trend starts to pick up momentum on rising vol-

ume.

Congestion follows with two up candles on very high volume,

and for comparison we only need to look to the left of the chart
and the volume associated with the initial rally higher. Here we
had a wide spread in price, yet here with only slightly less vol-
ume we have a narrow spread of price. This signals more weak-
ness ahead. The market makers are selling into weakness in
preparation for the next phase lower, with the bearish engulfing
candle on the second of these signaling the re-establishment of
the primary trend lower once more.

181
AUD/CHF - 5 minute
note this up candle

and again

volatility

but looking very very weak

The sequence here starts with volatility to the left of the chart,
and as usual all we can gauge from this price action is we have
participation by the market makers given the associated vol-
ume.

The pair then moves higher, but this looks very, very weak.

First we have a series of shooting stars on ultra high volume fol-

lowed by further high volume, but which fails to take the market
higher. The market makers are driving volume into the market
here and selling with no response higher, and so we can as-
sume the market makers are distributing here in the selling cli-
max, and away we go.

182
Note the narrow spread up candle as the downtrend begins on
ultra high volume. This is a sure sign of weakness, and confirms
what we have already seen in the selling climax.

This is repeated once again on the two candle rally as the vol-
ume rises. However, we are now well below the ceiling of resis-
tance, so any move higher will need to see significant effort if
the pair is to advance further.

The waterfall then begins to develop, and as it does the spreads

begin to widen with the volumes rising, before the pair moves
into the congestion phase as the volume fades.

And as always it is important to remember the volume on the

second half of the chart is compressed, because of the volume
in the first half. Extreme volumes will always impact volume
both before and after, and it is important to remember this at all
times. In the price waterfall for example, it would be easy to con-
clude that volume is relatively low. And here the word relative is
all important, as it is relative to the extreme volume of earlier. So
in the context of volume it would be high, if the extreme volume
were not on the chart.

183
AUD/JPY - 5 minute

wide spread with volume

rally falters

confirms
weakness

This is another classic price chart where we have the waterfall

developing, then pausing into congestion, before developing
once again, and moving down into the next level. And of course
this pair is a barometer of market sentiment and risk given the
risk currency on one side, and the safe haven currency on the
other.

But if we start at the top left of the chart, the initial move lower
is stately, after which we see an injection of volume on a narrow
spread up candle, which signals more weakness to come as the
market makers begin selling here more strongly. This is followed
by another weak candle.

184
Then we receive the first wide spread down candle on high vol-
ume with the subsequent candle delivering a firm signal of weak-
ness, as it is a narrow spread up candle on even higher volume,
which is then repeated.

And down we go to the next level.

Now we have extended price action in the congestion phase. A

solid floor and ceiling are built here, which once breached con-
firms the ongoing weakness, and down we go on rising volume,
and into a further congestion phase, which is not so tightly de-
fined as the first. Note the two bar reversal on high volume, but
then the rally falters with falling volume and a rising market on
narrowing spreads, telling us there is weakness ahead.

And down we go to the final phase. This is classic ‘stepped’

price action. Not all waterfalls are dramatic. This is one of the
more stately ones, punctuated with both congestion periods
and trends.

185
AUD/NZD - 5 minute

rally looks weak

stopping volume

Another example of a stately move lower for the Aussie dollar,

this time against its near neighbor the New Zealand dollar.

As we begin from the left of the chart, the initial waterfall devel-
ops nicely, and remember the volume bars would have been
taller prior to the arrival of the market makers.

Then they step in on the down candle with volume, but one
which develops a deep wick to the lower body. This is the high-
est volume of the session, and is most definitely stopping vol-
ume here. The market makers have decided to buy here, to stop
the price falling further, with the deep wick to the lower body of
the candle and ultra high volume, confirming this fact.

186
The next candle is also down, but has no wicks and is on high
volume, but sits inside the spread of the previous candle so
bearish selling pressure appears to be waning, before further
buying appears on the narrow spread up candle, and up we go.

However, the rally looks weak.

The first candle in the sequence looks good. It is a nice wide

spread up candle with excellent volume, so no signals here. The
two candles that follow are very different, and signal weakness
ahead. Volume is high and yet the spreads are very narrow, and
confirmed by the third candle in this sequence. The spreads are
narrowing, and the volume is high but falling. Such volume
should be driving the market much higher and faster. It is not be-
cause the market makers are selling into weakness.

The volume action gradually subsides away as the price action

slides lower. Some currency cross pairs exhibit this gradual
price action, but generally moves to the downside are typically
much faster. And this was also towards the end of the session
and week so everyone was squaring positions, and closing
ahead of the weekend.

187
AUD/USD - 5 minute
cracks start to appear

rally looks weak

market makers
arrive
one last effort

This is a more typical price waterfall with the Aussie dollar.

The initial entrance of the market makers looks strong. Two

wide spread up candles on very high volume. There appears to
be little weakness at this point, other than on the first of these,
where we have some evidence of selling as we have a wick to
the top of the candle. However, it is not well developed, and at
this point more characteristic of early profit taking. And the sec-
ond candle rings no alarm bells.

The next candle is down, and is a narrow spread candle on high

volume, so there is some selling. This is often the case, and is

188
simply profit taking again after such a strong move. But then the
cracks start to appear.

First we have an upthrust candle on very high volume and the

selling by the market makers starts. There then follows a smaller
example, as the market makers continue to sell. Then comes a
two bar reversal. Further weakness signals follow, with the mar-
ket makers pushing the prices higher and selling into weakness.

There is one last effort on the upthrust candle, and the market
breaks lower on rising volume before it falls, after which the
price flattens into congestion, and we have a rally. The two up
candles in the rally look fine, before weakness appears once
again with the small candle at the top which is on average vol-
ume with selling volumes then building once again, and the pair
moves down into the long congestion phase at the bottom as
volume dies away.

189
CAD/JPY - 5 minute

first candle

ceiling of resistance

applying the brakes

This was almost certainly a move triggered by a news release or

item of economic data, or could even have been oil related. The
market moves rapidly here, and is exactly what the market mak-
ers enjoy. There are no major pause points here, and no stop-
ping to sell back into weakness. If you were not short before,
this is a tricky position to enter, as there are no ‘confidence
building’ candles here to offer that low risk entry. It is just a fact
of trading life that sometimes they simply do not appear.

The first candle has no wicks, but high volume. This is just pure
selling here, and a strong signal on its own. Because if there
were any wicks at all, this might suggest profit taking or market

190
maker buying. But there are none here, it is just a clean candle
from top to bottom.

The next is narrower as the market makers are selling into the
waterfall, and the same again in the next candle. Then on down
into another wide spread candle on high volume, before they
move in once again to begin the stopping process, and apply
the brakes with the two bar reversal on high volume.

From here we develop into the classic price action of the buying
climax as the pair is whipsawed around on both high and re-
duced volume. This is the classic price action of the climax, as
the market makers move the pair back and forth to shake out
further sellers. You can think of this as the ripples on the pond.

The explosive move is the large stone landing in the pond or

lake, and the waves created are instant and large, but gradually
die away as they move further from the landing point. It is the
same here. The initial shock waves are large, but as the mop-
ping up phases develops, both volume and the price action
calm.

191
EUR/AUD - 5 minute

rising volume in
buying climax the trend

final
phase

Once again on this chart we have a classic example of accumu-

lation in the buying climax on a five minute timeframe. Remem-
ber, these occur in all timeframes, and are not the sole province
of the slower timeframes. On a fast chart such as this, it is possi-
ble to see a complete cycle from the selling climax to the buying
climax and back again within a few hours. It is all relative to the
timeframe under consideration. All price action is self similar,
and repeats across the timeframes. It is wheels within wheels,
or the Russian doll analogy.

And again, this is very typical of the volume and related price ac-
tion you are likely to see. The whipsaw price action and volume

192
is driven in, with traders buying into a move, but then selling in
panic as more traders are encouraged to buy, and then selling
again, as the price action is pushed higher and lower.

There is a whole variety of buying and selling within the price ac-
tion. The final phase of the buying climax is confirmed by the
three down candles, before the trend higher begins on below av-
erage volume, but then builds slowly as the trend gathers mo-
mentum higher, before finally dwindling away as we move into
the congestion phase at the top of the chart. Note that in the up-
trend we have generally rising volume, and it is only when we
reach the congestion phase, do we start to see some anomalies
once more.

The climatic volume here is very typical, and something that will
appear across any timeframe. This could be a monthly chart for
a stock for example, or as here on a 5 minute currency pair. The
purpose is the same. The accumulation phase is underway, and
a campaign is being prepared.

Note too there was no test here prior to the rally higher. The in-
siders do not use tests all the time, but when they appear are
good signals to see.

193
EUR/CAD - 5 minute

classical top
more classic weakness

note weakness

Some even paced price action here with volume describing

each and every move.

If we begin to the immediate left of the chart, the initial move

lower is on average volume for the first few candles with suppor-
tive buying, before the trend develops on rising volume driving
the pair higher.

Once again, remember these volume bars would have been

taller and more descriptive prior to the market makers moving
in, and increasing the volume dramatically. The trend higher
then begins, and is given an injection of momentum and volume
as the market makers move in. We then reach the top with vol-

194
ume remaining at extreme levels, where the price action is
topped off with a doji candle followed by a classic upthrust or
shooting star. The doji candle is indecisive, but the shooting star
on very high volume tells its own story.

Selling by the market makers then begins in earnest. Note the

weakness of the attempt to rally following the first two wide
spread down candles, and once again the final up candle of
these three is another with a deep wick to the top on high vol-
ume, and a great entry point, or confidence builder in an exist-
ing short position.

A further congestion phase then builds before we see the clas-

sic down candle with the wick to the top of the body.

This is the deep wick candle on high volume, followed by the

next on higher volume still, before we move into another pause
and congestion phase with volume remaining high, and further
weakness evident with the wicks and price spreads telling their
own story.

Finally, we reach a bottom as selling pressure from the market

makers subsides, and we move into an extended congestion
phase as the next campaign is prepared.

195
EUR/CHF - 5 minute

more weakness

classic top
again spoof candle

Some more great price action here.

And if we start at the left of the chart, where congestion had

been building. Then the market makers inject volume on the
wide spread up candle, and which is also the highest volume of
the period. But look at the next candle, and one that should
make you tingle in anticipation. It has identical volume, but
there is no follow through.

The market makers are selling heavily. And twice more, with one
final heave upwards for luck before driving the pair lower on
high volume. When these sorts of candles appear on such vol-
ume, the outcome is almost guaranteed, and it is only a ques-

196
tion of time before the move lower commences. So it is not a
question of if, but when, and all that’s required is patience. In
this example we have three candles sending the same mes-
sage. The market makers are selling, and selling heavily here.
The price action alone tells us the market is weak. The volume
confirms it. And the fact that all three have failed to breach the
same price level, adds further weight, if indeed any further
weight were needed.

Then down we go into the congestion phase with a spoof can-

dle higher on average volume. Why is it a spoof? Well, the price
action is the same as the wide spread up candle on the break
higher. So identical price action, but the volume on the second
is half the volume of the first. A simple analysis, but so powerful.

More downside momentum follows, and note the attempt to

rally with the high volume bar and narrow spread candle. A clear
signal again of more weakness to come.

197
EUR/GBP - 5 minute

weakness building on rising

market and falling volume

This is almost a perfect example of the ‘longer term’ relationship

between volume and price. In other words, a rising market and
falling volume can only be weak, and this chart really frames
this concept over a broader horizon. Yes, we do see this on
groups of candles as we have seen over the examples in the
book, but this is a great example of ‘stepping back’ from the
close analysis of each candle and volume bar, and seeing the
bigger picture.

In fact in many ways, this is also a perfect mirror image with one
reflecting the other. All the components are here, of rallies, of
buying of support and of selling, but when played out in the con-

198
text of the chart, they also describe why the congestion phase
has arrived, with the volumes continuing to fall as we move into
this phase of price action. The final candle is not significant
here, and was simply reflecting the end of the session and rollo-
ver.

As volume traders we do focus a great deal on the detail, but re-

member to step back occasionally and cast your eye over the
entire chart in order to get a sense of the broad trend and the
volume profiles.

199
EUR/NZD - 5 minute

buying climax

Another great example of the buying climax, but also one which
demonstrates a further facet of volume price analysis, which is
simply to be patient and not jump in too early.

Starting at the left of the chart, the initial candle of interest is

clear, and is the deep wick down candle on ultra high volume.
At that point we might become very excited, and it would be
easy to jump in immediately, and buy on the signal.

But then the market moves lower, and into the typical whipsaw
price action of buying and selling, as the market makers push
and pull the price action, driving it this way and that in order to

200
accumulate further, and remove the selling pressure before start-
ing the campaign higher.

There are no hard and fast rules here. Sometimes the trend will
develop quickly, but most times it will not, so the congestion
phase follows. Here we have the ‘overrun’ aspect of the initial
signal, and perhaps the takeaway here is that the candle is ‘ex-
treme’ and unusual. Normally we would look for a more ‘consid-
ered’ hammer candle so perhaps this was a heads up warning
in itself?

When you see a candle such as this, just wait and treat it with
caution. So the question here is, at what point might we con-
sider entering such a move? And there are two answers here.

First when the price action and volume gives us the confidence
to enter. The second is once any areas of resistance have been
taken out, and so offer a strong platform of support. Which is
where we turn to classic price based support and resistance lev-
els for help, and which are also part of volume price analysis.
This is all explained in detail in my book A Complete Guide To
Volume Price Analysis.

201
EUR/USD - 5 minute

two candles deep wicks

selling again

buying

Some sumptuous price action here, and one where you would
be spoilt for choice in terms of getting in, which would only de-
pend on your risk appetite. In other words, get in at the top, the
next level down, or even on the third or fourth rally? The choice
is yours as the signals are all there.

After the initial surge, weakness is heralded by two candles with

deep wicks on high volume before the pair rolls over, and into
the next phase.

There is more weakness with a further fall before the market

makers step in to buy, selling into the weakness again before

202
moving on down to the next level. Note the wonderful shooting
star candle as the precursor to this move lower, and once again
a powerful signal, and perfect entry point if you missed out ear-
lier.

Finally we move down, and into the congestion phases with

some minor rallies and falls.

And remember the euro dollar is the most heavily traded pair in
the forex market with the tightest spreads, so getting in is easy,
with volume price analysis then helping you to stay in to maxi-
mise profits.

203
GBP/AUD - 5 minute
up candle and deep wick

buying
support
and more buying

I have included this example as it is one where we did indeed

have a ‘single candle signal’ to start the firing gun of the cam-
paign. As I said before, there are no hard and fast rules and we
have to use our judgement, and here the move was fast.

The entry of the market makers is denoted by the up candle and

deep wick to the upper body, which is a clear sign of weakness.
The market makers have moved in and sold heavily into weak-
ness, and the subsequent price waterfall then develops very
quickly.

Note the initial buying which appears on the down candle with
the deep wick two thirds of the way down, before continuing

204
lower, and reversing on the bullish engulfing candle, and up into
the rally, which is once again topped off by....... a shooting star
candle on extreme volume. So we know this rally is not going
far, and the market makers are selling heavily here.

And then down again into a further buying phase.

The campaign higher is then prepared, and moved firmly away

on good volume and into the congestion phase as volume dwin-
dles away. Please note the last candle on the chart is the end of
the week and session close, coupled with rollover.

205
GBP/CAD - 5 minute

shooting star
confirms

selling into
weakness

In this example we move back to consider the finer detail of the

charts with the market initially in congestion, before the volume
rises dramatically on the first wide spread up candle and moves
higher.

Then comes the second candle, which has a narrow spread on

identical volume as the first, and this can only mean one thing.
The market makers are selling out strongly here, which is duly
confirmed with the bearish engulfing candle on very high vol-
ume.

The minor rally comes to a halt, with the shooting star candle
validating the weakness at this level, and in addition creating

206
the ceiling of resistance. A further tiny candle then appears on
very high volume telling us the market is now fragile, and ready
to break, and away we go.

What is interesting on this chart are the intermediate congestion

phases, as there are no very clear signals prior to the next break
lower developing, so it is a little harder to jump into the trend on
this one.

But as we move lower and down to the next congestion phase,

they are most certainly there with narrow spreads and high vol-
ume, and very clear anomalies that are hard to miss.

The clearest signal however comes right at the top on the ultra
high volume, and would have been the place to enter, with a
wide stop loss to allow for any continued attempts to rally. Get-
ting into a trend early at a reversal point always carries more
risk, and this is reflected in the fact you will need to set any stop
loss that much wider as you cannot be sure how long the mar-
ket will remain at this level, before moving, and may even at-
tempt to rally several times. But, the payoff is you are in the
trend earlier.

Trading is all about risk and reward. In this set up you are taking
a little more risk, but are rewarded with more of the trend. Join

207
lower, and the stop loss is closer, but you have less of the trend
to take out. It is all about risk and reward, which in essence is
all the financial markets are about. Risk on reflects higher risk
for higher reward, whilst risk off, reflects the opposite.

208
GBP/CHF - 5 minute

top is not so
clear

And this is an example where the extreme top is not so clear.

The initial candle is tricky to analyze. It is similar to a doji can-

dle, and from the price action it is very hard to decide whether it
is a sign of strength or weakness. We have wicks to top and bot-
tom as well as a wide body. And at times like this I would sug-
gest two things.

First patience. If you are not sure, don’t guess. Wait for clearer
signals to appear.

Second, move to other timeframes as this may well help to ‘dis-

assemble’ the candle into five one minute candles, or give you a

209
longer term perspective say on the 15 minute chart for example.
This can often be a great help in clarifying such price action,
and of course will also give you an alternative perspective. Us-
ing a multi timeframe approach is a key part of any trading ap-
proach, and here it helps to provide an alternative view of the
price action, when the one you are considering is not clear

I cannot recommend this too strongly.

You will no doubt have multiple timeframes anyway, but when

one such candle arrives - move to another timeframe for further
clarification.

210
GBP/NZD - 5 minute

long legged doji weakness

confirmed

weakness
confirmed

Once again this is the same period of price action in a sterling

related pair, where the start of the trend is far from clear.

On this occasion we have a very distinctive long legged doji as-

sociated with ultra high volume, so all we can assume here is
the market makers are in the market buying and selling on the
volatility. We can make no conclusion here on the proposed di-
rection for the campaign, so have to be patient.

Do not assume such a candle is indicative of a change in trend

- it is not. Step one is to analyze the candle in a faster time-
frame.

211
The wide spread down candle that follows then confirms the
bearish sentiment, and is also on very high volume so clearly
there is selling here, but until the candle has cleared the lower
leg of the doji candle, it might be prudent to wait.

The pause point in the move lower is punctuated with further

doji candles, and it is not until the upthrust candle appears prior
to an exit into the next phase, and is on very high volume,do we
have a more straightforward entry.

And indeed at the next rally we see a repeat with another clear
signal of further weakness as the candle closes with a deep up-
per wick and high volume.

Then down we go to the buying as the market makers step

back in, and off we go to the upside, but on gently falling vol-
ume. So the rally looks weak and is unlikely to go far.

212
GBP/USD - 5 minute

two bar reversal and

shooting star candle

candle
one
candle two

I have included this chart for the Cable, as it gives us another

perspective on the start of the trend. As we have already seen
from earlier examples, sentiment for the British pound in this ti-
meframe was universally bearish, so giving us an excellent con-
firming signal when entering positions, with one chart validating
another. This is not always the case, but is a helpful aspect to
consider.

The first wide spread up candle appears on ultra high volume,

but has a deep wick to the upper body, so whilst the initial re-
sponse is bullish, the wick reveals the depth of selling in the can-
dle. Then we have a second candle with high volume, and no

213
wicks. And it would be very easy at this point to jump on the
trend as there is nothing to suggest the reversal that is about to
happen. So what is the answer here? And this is one where one
other technical tool will come to our aid which are part of vol-
ume price analysis, and that is support and resistance.

Always check for such levels once a move begins as they will
help to build confidence in entry and exit and also answer the
question, ‘why’?

The next candle makes the position very clear, but by then we
may have already entered on the second candle. So always
check other technical aspects of the charts before jumping in.
Once in train, the trend is easy to pick up and the clue here was
threefold.

First, selling in candle one with the deep wick to the candle. Sec-
ond, the marginal close above the high of candle one. In other
words the price is struggling to move outside the range of the
first candle. Third, the spread on candle two was less than half
that of candle one on the same volume, so clearly an anomaly
in terms of effort and result.

214
NZD/CAD - 5 minute

constant testing of
resistance

nice entry ?

And purely by coincidence we have a similar set up here. This

time though we have a more extended phase of price action be-
fore the trend breaks lower, and a wonderful example of the
building of resistance which holds throughout.

Again we have two wide spread up candles to start the move.

Traders are dragged in on the fear of missing out. The first has
the wick, and the second follows through, but unlike the previ-
ous example, the spreads of the two candles are more alike,
and so there is little or no anomaly here. Then weakness ap-
pears on the down candle following these two. The pair has at-
tempted to rise, but closed below the open, and so created the

215
wick to the upper body on good volume. This initial sign of
weakness is further confirmed two candles later with another -
this time it’s an up candle, and one with a narrow body and
deep wick to the upper body.

And here I would like to stress support and resistance once

again, and reinforce my comments from the previous example.
Here we have high volume with constant testing and retesting of
the price area above on ten separate occasions, but it is never
breached. This alone is enough to signal weakness. Equally the
floor of support is substantial. As this region is building we can-
not be certain which way the campaign will move. Patience is
therefore required when trading a break away opportunity.

And indeed as the floor of support is finally breached, note the

volume on the candle. This is a genuine move, not a fake move
or a trap. The ceiling of resistance is then retested. This is often
the case, before the move picks up momentum.

Once it breaks we can join the move lower, and note the two up
candles on the second rally on high volume and narrow
spreads. A nice entry point perhaps?

216
USD/CAD - 5 minute

buying

Another tricky one to read here with the USD/CAD, and this
time to the short side.

Here the market has been trending lower so we are perhaps ex-
pecting a strong move to the downside. The first candle is
formed as the market makers inject both momentum and volatil-
ity, but note the wick to the bottom of the candle. There is sus-
tained buying here.

The second candle then forms on the same volume and com-
pletes within the spread of the first candle, meaning the low of
the first candle has not been taken out. Then an up candle ap-
pears on high volume, followed by a deep wick up candle which

217
drives the market higher. There then follows some very choppy
price action, and the reason here was a series of news releases
with US, Canadian and then oil data all playing a part in the as-
sociated price action. So plenty of opportunity for the market
makers to move the market this way and that on a constant
stream of news.

And at times like this it is often best to stay out of such a pair
and look for other markets and opportunities, which will be
more straightforward than this one.

218
USD/JPY - 5 minute

pure selling
in the waterfall

A very rapid move here, and once again one that is preceded
with bearish sentiment, before the market makers move in with
ultra high volume on the initial candle. As there are no wicks
here the selling pressure is pure and clear. Once again, a very
strong signal of a continuation of the move.

The second candle then builds, but is perhaps a signal the

heavy selling of the first candle is now over extended. The sec-
ond candle has a relatively small spread, but on the same vol-
ume. Nevertheless the move lower continues with a repeat, and
on down again on high volume with a two bar reversal as it hits
the bottom.

219
The congestion phase then builds, and note the efforts to rally
with the high volume up candles, as they build a channel of re-
sistance and support accordingly.

This is finally breached, but there is no follow through and imme-

diately buying enters, and a gentle rally higher ensues.

The volume then starts to dwindle away as the congestion

phase extends to the end of the session.

220
USD/MXN - 5 minute

injects momentum

buying again

market makers note weakness

buying

And here we return to the exotic pairs, and as always with such
currency pairs, we need to be on our toes all the time. The
trends are there, but they do reverse quickly, so we can’t afford
to overstay our welcome!

A nice solid period of congestion builds initially to the left of the

chart, and then the move begins with the trend lower. The initial
candle here is one of my personal favorites. It has a wick to the
top, and the spread of the candle takes out the floor of support.
This sort of candle always seems to inject momentum. The ef-
fect I believe is from the initial move higher, and then the reversal
into the down body. This type of candle is like the ‘last hurrah’.

221
In other words, one last effort before the market gives up and
the move develops. The only analogy I can think of here, is of a
ballon filling with water, with the weight of water in the ballon
adding increasing weight, before it finally bursts and the move
begins.

Then we are off, down to the secondary level, and finally down
to the accumulation where buying arrives on high volume, with
the wick to the wide spread down candle signaling the start of
this phase, and followed by further buying.

Then the trend higher begins on rising volume, but note the
weakness that appears as we reach the pause point with the
deep wick to the candle on good volume. The pair moves lower,
but we see further buying from the market makers, first on the
narrow spread up candle on extreme volume, and repeated with
the hammer candle on high volume.

This is sufficient to take us up to the next level, and into the final
congestion phase of the session on good volume.

222
USD/NOK - 5 minute

alarm two bar reversal

bells

weakness appearing

hammer
note

Some excellent price action here with the USD/NOK, and some
very descriptive examples.

The initial move lower starts at the left of the chart with rising
volume as the pair breaks below the support platform before
pausing, and then breaking lower as the market makers drive
prices lower quickly. The first wide spread down candle looks
fine, but with a wick to the lower body suggests some buying.
The second candle then delivers the follow through, but on
slightly lower volume. Then the third down candle arrives, and
the narrow spread sets the alarm bells ringing. It is very narrow,

223
and yet the volume remains high. If ever there was an anomaly
this has to be it!

This is then followed by a hammer on high volume, and we see

a rare ‘V shaped rally’ develop, which do happen. Under nor-
mally circumstances we would expect to see congestion after
such a rapid move, but not on this occasion as the market mak-
ers move in strongly.

Note the market maker buying at the first pause point, and then
we are off to the next level with price rising on rising volume.
Then we see the first signs of weakness with the upthrust can-
dle on ultra high volume followed by another at a higher level,
before the trend tops out on a two bar reversal, and moves
back lower on rising volume.

Finally, we move back higher to complete the session. A great

example of how being light on your feet, and reading the clues
and signals delivered by volume price analysis would have of-
fered up some excellent trading opportunities.

224
USD/ZAR - 5 minute
gap down
high volume

moving in quickly

And finally to end this section with another exotic chart and ex-
amples of two very solid trends.

The first breaks lower on rising volume, and note the gapped
down candle on high volume confirming the heavy market
maker selling at this point. Volume then increases on the next
candle, before the first signs of buying appear with the small up
candle, with a wick to the lower body.

However, the next candle is wide and down, before narrow

spread candles appear on high volume as the market makers
absorb the selling pressure, and prepare to reverse the trend.

225
The move through the resistance area created is strong with a
wide spread up candle on high volume, and note the market
makers moving into quickly to buy the weakness on the first
pause with the down candle on ultra high volume.

From there the move develops strongly, with the final phases
moving upwards on relatively low volume - a warning sign the
move is coming to an end, which indeed it duly does, and tails
off on low volume as the session comes to an end.

226
 Section 5 - 4 hour charts
In this section we look at some examples from the four hour
chart for spot forex.

And you may think it odd I have added these at the end given
all the other timeframes are in chronological order, but there is a
reason. I wanted to include them at the end as they do require a
slightly different mindset when using volume price analysis.
Many traders say you cannot use this timeframe as the volume
profiles are always the same. In other words high in London and
the US and low in Asia. In a sense this is true, and as you saw
earlier, we also have similar issues when considering the hourly
charts, but I hope I have convinced you the methodology works
perfectly well on this timeframe.

When moving to the four hour chart we need to consider the

comparative aspects of volume in more detail, and in particular
compare one session to another, but of the same period.

The four hour chart is also an interesting one as we can break

the 24 hour trading day up into either four hour or eight hour
segments. So six sessions of four hours each. It’s not perfect,
but it does give a ‘framework’ to our analysis, and helps to di-
vide the chart into the various timezones and liquidity sessions.
And as I hope you will see, the four hour chart still has some-
thing to offer us as volume traders.

227
The key take away here is to remember there will generally be a
lag from one session over into the next. So what happens in the
London session on one bar, may follow through into the London
session the following day or two or more days later. It is almost
as though there is a delayed reaction. When you think about
this logically this is no great surprise as the focus constantly
shifts from one currency to another as the sessions move with
the 24 hour clock. So focus on the euro and the British pound
will be very high in London, less so in the US session, and of
very little interest in Asia and the Far East. So this ‘cyclical’ fo-
cus is really what the four hour chart is constantly describing,
which is why I left it until the end of the book. It really does
break the market up into the session phases of local price ac-
tion, which is why you will see the ‘delayed reaction’ effect com-
ing into play here.

I hope you will agree.

So here are several examples from the currency majors.

228
AUD/USD - 4 hour

interest
long legged
doji

note two
high volume bars

If we start with the Aussie dollar, and as I explained in the notes,

we expect to see the cyclical rise and fall of the 24 hour trading
day and which is as expected.

If we start on the left of the chart, the first visible signal is the
long legged doji candle on high volume. No doubt this was a
news release and volatility. High volume follows on narrow
spread lows, before the deep wick candle appears on very high
volume. The market makers are buying.

The next point of interest is the highest volume of the session

on the up candle with the wick to the upper body. Here the mar-

229
ket makers are selling into weakness as the candle is topped
with a wick. The pair failed to break any higher, and we see the
delayed reaction as the market sells off before further buying ar-
rives on the candle with the deep wick, with the pair rising over
two candles on good volume.

Moving to the centre of chart note the two high volume bars as
the market makers move in to buy, which delivered in the follow-
ing sessions as the market trends higher. And as we can see we
are currently in an extended congestion phase with gently de-
clining volume overall, and the pair is starting to look a little
weak. If the floor of support is breached on high session volume
we can expect to see the Aussie dollar move into a bearish
phase.

What this timeframe also provides is a more general view of vol-

ume over an extended period, which can often help to explain
the longer term trend which then develops.

Here for example we can see the volume to the left of the chart
is greater than that to the right. In other words, volume is declin-
ing over time, and if this were associated with a developed
trend higher, then this might be signaling an exhaustion of the
trend and possible reversal in the medium term. This is perhaps

230
more subtle, but these are the signals you need to consider for
longer term trading.

231
EUR/USD - 4 hour

market maker buying

break away

highest volume

A neat example here of the four hour chart confirming a session

break away, with the break away from congestion on session
three on a high volume wide spread up candle, and duly fol-
lowed with another.

Note the highest volume on the chart which appears under the
shooting star candle, and signaling weakness ahead. But the re-
action takes three or four sessions to materialize, and this is
what I meant by the delayed reaction. On a one minute chart
this would be seen in 15 or 20 minutes. On an hourly chart per-
haps a day.

232
But here we are considering the impact over sessions. The pair
does turn lower with the wide spread down candle accelerating
progress, before the market makers step in again on the ham-
mer candle and buy. Then we have congestion, and the delayed
effect once more, before the pair begin the trend higher.

Note here also this chart is deep into the summer months so vol-
umes are declining gently for seasonal reasons.

233
GBP/USD - 4 hour

note weak
rallies

initial bearish
selling

And this is another perfect example of the delayed reaction ef-

fect so typical of the four hour chart. Here we are with Cable,
and in this case it is almost metronomic progress.

The initial bearish sentiment begins with a wide spread down

candle on very high volume at the centre of the chart. The mar-
ket makers are selling heavily, and this is the highest volume on
the chart. This sentiment then carries forward to the following
session with a further wide spread down candle, before a weak
attempt to rally on high volume fails to follow through.

234
More weakness ensues as we continue lower, and note the
weak rallies particularly those on low volume. And what is also
interesting here is the general decline in the selling volumes on
the down candles. This is in part due to the seasonal aspect,
but also reflects a general lack of selling pressure as the British
pound continues to remain very oversold.

The gentle rally begins on above average volume, but with little
sign of any significant accumulation here, we can expect to see
a consolidation phase develop with the development of a buy-
ing climax perhaps into the later part of the year.

235
NZD/USD - 4 hour

initial buying example

confirmed
wide spread &
deep wick

And so to one of the commodity currencies, and if we start at

the left of the chart.

Note the initial buying which arrives on the deep hammer can-
dle on high volume on the left, and which is then confirmed in
the next session with further buying as denoted by the depth of
the wick to the lower body, and on very high volume once more.

This bullish sentiment is then carried forward into the next four
hour candle which closes with a wide body, with very small
wicks. Then we see high volume under a narrow spread candle
as the pair attempt to continue higher with the market makers

236
selling into weakness here, but the pair turns lower over the
next four candles, before an injection of buying once again
drives the pair higher in a series of steps, with ultra high volume
on the narrower spread candle of the two, hinting at weakness
ahead.

Throughout these phases of price action you can spot the

anomalous relationships with ease. The simplest place to start
is with the highest volume, as this is where our eyes are natu-
rally drawn. For example, I have highlighted one such on the
chart. This is virtually the highest volume of all, and yet look at
the price action on the candle. It is very compressed, and with
the other volume bars and price candles as benchmarks, we
would have to conclude very quickly that this was weakness,
with the market makers selling heavily here.

And indeed, even on the ‘mini rally’ before the bearish engulfing
candle, the price action looks weak given the rising volume.

And moving to a different example, note the wide spread up can-

dle with the deep wick, yet consider the volume, which is aver-
age at best. Is this a trap? One would certainly think so, and not
yet sprung either. So here we are trading in the range of this can-

237
dle for the remainder of the chart, and note how many attempts
have been made to breach the high of this candle.

Strong resistance is building here, and given the trap move that
has now been created, one wonders how much longer it will be
before we see the pair sell off strongly.

238
USD/JPY - 4 hour

weak rally

initial weakness

This is a further example of the ‘delayed reaction’ effect, here

with the USD/JPY.

The initial weakness appears to the left of the chart with the
high volume and shooting star candle. This is repeated, and con-
firms the weakness, so eight hours of selling effort here by the
market makers.

The market then moves into congestion over the next session,
and following on then delivers selling with ultra high volume and
a deep wick candle on volatility.

239
This sentiment then continues following the extended conges-
tion phase, taking the pair down to the floor of the trend.

More congestion follows, before an attempt to rally that is rela-

tively weak, and this is where the yardstick of volume over the
chart will help to contextualize the volume. It is more difficult
here given the seasonal aspect, but I’m sure you get the general
picture.

240
USD/CAD - 4 hour

buying
key candle and volume

Here we have some more interesting price action, and if we be-

gin with the first candle on the chart at the extreme left This is
our first signal of possible weakness with high volume on the
shooting star candle, as the market makers sell.

Congestion then follows, but note how we are seeing volume

driven in, with no reaction higher with both two bar reversals
and also doji candles. The pair is generally weak, and the bear-
ish tone is one of sliding lower, rather than moving with momen-
tum. Indeed on the highest volume of the period, the market
makers step in to buy this weakness with the deep wick to the

241
lower body of the candle, with the pair rallying, but once again
running out of steam and into exhaustion.

The sideways price action continues before we reach the most

significant candle and bar on the chart to the centre.

First we see a very wide up spread candle on high volume. No

doubt many traders jump in here expecting a follow through and
break through the ceiling of resistance. But the next candle then
delivers the real message. There is weakness to come. A huge
volume bar with very narrow spread price action. This signal
would be truly hard to miss, and perhaps the hardest part of
trading this timeframe is remaining patient, and waiting for this
to take effect, because the price action that follows is over two
days.

But as we can see from the ensuing price waterfall it was worth
the wait, and a very traditional price waterfall then extends over
several sessions. Much of the driver here was a rise in oil price
rather than weakness in the US dollar, but both were working in
unison to produce this move. Note also how the resistance level
held firm throughout, giving us another piece of the puzzle.

An excellent example, which describes the delayed response so

typical of the four hour chart.

242
EUR/CHF - 4 hour

market makers
move in

confirms buying support

weakness

A great example that once again highlights how you have to

read the four hour chart. And this one is particularly interesting.

If we start with the first few periods on the left of the chart, here
we see the pair rising, and picking up the bullish momentum
with some nice wide spread up candle on rising volume. The fi-
nal wide spread up candle following the brief congestion period
however is on lower volume, and when compared with the first
few candles hints at weakness to come.

Bearish sentiment then follows over three down candles, before

we see a reaction higher on three up candles, but on the third

243
candle in this sequence higher, a deep wick forms to the upper
body on high volume and confirms the weakness, with a wide
spread down candle then following which also injects momen-
tum and volume in the move lower.

The selling then begins in earnest, with rising volume over the
two sessions before clear stopping volume arrives on the ultra
high down candle with the deep wick to the lower body, having
been signaled initially on the preceding candle. The market mak-
ers are moving in and buying. Here we see classic stopping vol-
ume in action.

But note the rally does not start immediately, and this is the
same as other timeframes. The absorption takes time, and here
time is extended across the sessions.

The rally begins, and at the first consolidation phase buying sup-
port arrives to prepare for the second phase upwards to the
top. But volume is insufficient to breach the resistance level,
which caps the advance, as the pair rolls over on reduced sea-
sonal volumes.

244
AUD/NZD - 4 hour

strong signal

note
note the trap

And finally on the four hour timeframe, I have included the AUD/
NZD as this is an example of a cross pair where the focus is pri-
marily in the Asia and Far East session.

Once again the delayed aspect is clear with the strong signal of
weakness arriving early on the chart with the deep wick candle
on very high volume which duly delivers. Note the volume five
bars later as the move is brought to a halt before resuming in
subsequent sessions.

Selling pressure subsides before we move into the uptrend,

which is driven higher on good volume as the sessions unfold.

245
Then we reach an interesting phase of price action. Note the
volatile candle, but check out the volume - it is very, very low
here.

The market makers are not participating so any move away

from here is likely to be a trap. And so it proves! The rally higher
is short, before the downwards trend develops with the pair con-
tinuing to remain bearish longer term. And as you can see on
this chart I do have a live order in the market on this pair, and
likely to add further to the position if it develops by scaling in.

246
 Section Six - Currency futures
In this final section I want to consider several examples from the
world of currency futures, and in a variety of timeframes.

As you will see, volume price analysis applies equally well here,
and here the insiders are the big operators.

The only complication we have in the world of currency futures,

every currency is quoted against the US dollar. So the USD/
CAD becomes the CAD/USD and the USD/JPY becomes the
JPY/USD, and all the chart examples here are from NinjaTrader.

247
6A - (AUD/USD) 10 minute chart

entry
rising price and
candle
falling volume falling with falling
volume

note
volume

classic congestion

And we start with the 6A which is the futures contract for the
Aussie dollar on a fast timeframe, and this is a ten minute chart.
The period here is from the start of the US session as this gets
underway, and through to the close, so we are comparing ap-
ples with apples here in terms of volume.

As we get underway to the left of the chart, the pair remains

bearish, and is moving firmly lower on rising volume, and note
the nice entry candle on the first pause point, which is followed
two candles later by an injection of both momentum and vol-
ume. However, what is interesting in the next wide spread down

248
candle is the reduction in volume when compared to the one
earlier, and this sends us a signal that selling pressure is wan-
ing. Why? Because, we should expect to see the same volume
here. We do not, and it is also substantially lower than the previ-
ous candle, so the big operators are stepping back here. And
so it proves to be, as they move into the market strongly just af-
ter 15.00 on a news release.

However, whether this is buying or selling is less clear with the

pair rising over three candles, but this still looks weak for two
reasons. First, the volume is falling as the market rises, and sec-
ond the spreads are narrowing so suggesting further weakness
to come.

The pair then rolls over, and once again note the volume here, it
is falling with a falling market, so this confirms the selling pres-
sure is no longer dominant. And so we move into the classic
congestion phase of narrow spread candles in a narrow range,
and with volume falling away as the big operators withdraw, and
move on to another pair.

249
6A - (AUD/USD) 15 minute chart

entry candle

weakness entry candle

upthrust

I thought it would be interesting to consider the same price ac-

tion for the 6A on a slightly slower timeframe, and encompass-
ing both the London and US sessions. So this chart broadly cov-
ers the market from the London open to the close of the US ses-
sion, and in doing so also gives us a very different perspective
on the reaction to news at 15.00.

And once again here, we do have to remember, that until the

surge in volume at the centre of the chart, the preceding volume
bars would have been much more descriptive. So in consider-
ing this chart, please do not think the volume to the left cannot

250
be read. It can, and the volume spikes in the London session
would have been just as meaningful.

As I mentioned in the previous example, the pair had been sig-

naling weakness throughout the London session with constant
efforts to rise, all of which failed to hold above the strong ceiling
of resistance. Note the upthrust on high volume and the weak
rally on narrow spreads followed by the hanging man. All signs
of weakness with the US session then picking up the bearish
momentum, and into the price waterfall. As you can see we also
have some excellent ‘entry’ candles here too.

And so down to the highest volume of the day, and here too we
have indecision with the long legged doji candle, and just con-
firming what we have seen on the ten minute chart. The pair ral-
lies, but the immediate reversal suggests weakness on the two
bar reversal, and confirms what we have seen on the faster
chart with some further weakness here on the subsequent two
candles.

251
6B - (GBP/USD) 30 minute chart

note the spread

water filled and again

balloon !
mini repeat

This is an interesting example from the 30 minute chart for the

British pound, and once again demonstrates the importance of
comparing volume in the sessions. This period of price action
covers the market from the mid to late US session on the left,
then moves into the Far East and Asia session. Towards the cen-
tre of the chart we see London enter, and get underway before
we move across the chart into a second US session to the
close. This gives us a sense of the how the volumes vary from
one session to another.

252
The price waterfall here is classic, with rising volume as the pair
falls strongly, and note the weak attempt to rally on candle three
in the sequence. This is the balloon filling with water which then
bursts, and off we go again.

The dramatic volume at the bottom signals a big move by the

big operators, and suggests strong buying, but we have to wait
for the next candle for a clearer signal, which again, is perhaps
not so clear, because this could simply be a pause point. The
doji tells us there is indecision, but we cannot be sure on the di-
rection at this point so again patience is required.

The subsequent candle does then confirm with a clean wide

spread up candle on excellent volume, and up we go and into
the congestion phase. Note how we see the down candle on ex-
tremely high volume which fails to follow through. This is almost
a mini repeat of earlier, and given the volume we would have ex-
pected to see a much wider candle. Compare this to earlier
where we have wider spread candles on much higher volume.
This suggests the big operators are buying, and so the price is
contained. There is another even smaller repeat of this later in
this phase of price action before the pair finally break higher on
rising volume.

253
6B - (GBP/USD) monthly chart

entry
candle

4
1 3
Brexit
candle

5
2

And here we have moved to a much slower timeframe for the

6B, which I thought would be interesting as this also embraces
the shock vote by the UK to exit the EU which occurred in 2016.
The period here is almost five years, from April 2013 through to
December 2017.

The Brexit candle is the one to the right of the chart, and has
the heaviest volume, and given the lack of buying, as denoted
by the lack of any wick to the lower body, it was no surprise to
see this very bearish sentiment continue for the next four

254
months. And as you can see, once again we have a nice entry
candle with October delivering further bearish sentiment.

Then we move into the inevitable accumulation phase, and re-

member this was also reinforced with much market commen-
tary and analysis suggesting that perhaps the reaction was over-
done, and that the UK economy would survive and perhaps
even prosper after all! The world was not about to end.

Remember too, the reaction for the British pound was universal
across the complex with heavy and sustained selling in all the
pound pairs. In addition, this was also reflected in risk assets
with gold soaring, very strong Swiss franc and yen flows, and a
selling of equities worldwide.

This event really did rock the global boat. Since then the waters
have calmed, and we have seen the classic accumulation phase
developing, with the big operators taking advantage of each
and every piece of news, as the GBP lurches this way and that
on positive and negative Brexit news, that is constant and unre-
lenting. And note the four buying phases (accumulation), with a
fifth just built in November (1 - 5). In addition we are also break-
ing through resistance in the 1.3300 area which has now be-
come support.

255
6C - (CAD/USD) 15 minute chart

note and compare

volume

great
signal

This example is from the other end of the spectrum, and is the
6C contract on a fifteen minute timeframe. And remember, that
in the world of futures the quoting convention is for the USD al-
ways to be the counter currency. In other words, the second cur-
rency quoted, so this is reversed from the spot currency nota-
tion, and is the CAD/USD, not the other way round. The chart
covers the session from the London open to the US close.

And we have some more ‘water filled ballon candles’ here! If we

start with the highest volume of the session, this is a great sig-
nal and really the only question is whether you get in early, or

256
wait for the bearish trend to develop. Two wide spread down
candles follow with one confirming the other on similar volume,
before we move into the congestion phase which slides lower
before accelerating on high volume, followed by a further weak
up candle with a well developed wick and down to the next
phase.

However note the volume under the final wide spread down can-
dle in this move, it is modest compared to the others in this ses-
sion and signals the bearish selling pressure is perhaps waning,
and coming to an end. This certainly seems to be the case as
we move to the close with some bullish sentiment returning,
and a strong platform of support building, which may then pro-
vide the platform for a bounce higher.

257
6E - (EUR/USD) 5 minute chart

stopping
volume

and more
buying

big operator buying

test of
supply

The euro dollar is everyone’s favourite pair and here we have

the 6E on a 5 minute chart. The period here is from late morning
in the US session through to the close.

And if we start with the first candle on the chart, which is a long
legged doji candle giving us a signal of indecision, which is then
followed by the classic shooting star candle, but on average vol-
ume. Not a strong signal. Nor indeed is the next candle, a nar-
row spread down candle on even lower volume, so at this point,
there is very little to suggest a strong move in one direction or
another. Then we see the next candle which is wide spread and

258
down on very high volume. The big operators are selling, and
the following candle, although closing as an up candle, looks
very weak on very low volume, which is validated as the price
waterfall develops.

Then we start to see rising volume, but note the wicks develop-
ing to the lower body of the candles, signaling stopping volume
is building as the big operators begin to move in and buy, with
further buying in the hammer candle at the bottom. The pair
then moves into congestion before we see a test of supply and
off we go with some well developed momentum.

The congestion phase is also interesting with further big opera-

tor support and buying arriving here, so driving the pair up to
the next level, before volume drains away as we prepare for the
Far East and Asia session where focus shifts from European cur-
rencies and the US dollar, to the commodity currencies and the
Japanese yen.

259
6J - (JPY/USD) monthly chart
note
rising
volume
volume
strong entry

strong
signal

This is another pair where we have to reverse the notation, this

time for the JPY/USD, a notoriously tricky pair to trade, but one
where considering the slower timeframes will always help to
frame the current price action. Here I have chosen the monthly
chart, but a daily or weekly chart would be just as useful. Of
course, signals here require patience, and the first arrives imme-
diately on the first candle as the big operators sell very heavily
here.

The move lower begins, but note the rally higher and the volume
on the second candle. This looks weak as indeed do the subse-

260
quent candles. Then the selling starts in earnest as the price wa-
terfall develops on rising volume, before we reach the conges-
tion phase and accumulation with several gravestone doji can-
dles here.

The rally higher begins on high volume, but note the final wide
spread up candle in the rally, and more particularly the associ-
ated volume and wick to the upper body. The volume looks low,
and the wick suggests weakness, and coupled with the fact that
this price level is now testing resistance above it’s no surprise to
see this level hold firm, before bearish sentiment takes hold
once more.

The current phase of congestion is now also looking increas-

ingly fragile, with repeated efforts to rise all failing, and on in-
creasing volume on the most recent candle.

261
 My other books

A Complete Guide To Volume Price Analysis

In the UK we have a product
called Marmite. It is a deeply
divisive food, which you either
love or hate. Those who love
it, cannot understand how any-
one could live without it - and
of course, the opposite is true
for those who hate it! This sen-
timent could be applied to vol-
ume as a trading indicator. In
other words, you are likely to
fall into one of two camps.
You either believe it works, or
you don't. It really is that sim-
ple. There is no halfway house
here! I make no bones about
the fact that I believe I was lucky in starting my own trading jour-
ney using volume. To me it just made sense, and the logic of
what it revealed was inescapable. And for me, the most power-

262
ful reason is very simple. Volume is a rare commodity in trading
because it is a leading indicator. The second, and only other
leading indicator, is price.

As traders, investors or speculators, all we are trying to do is to

anticipate where the market is heading next. So is there any bet-
ter way than to use the only two leading indicators we have at
our disposal, namely volume and price? In isolation each tells
us very little. After all, volume is just that, no more no less. A
price is a price. However, combine these two forces together,
and the result is a powerful analytical approach to anticipating
market direction.

However, as I say at the start of the book, there is nothing new

in trading, as the analysis of volume has been around for over
100 years. After all, this is where the iconic traders started. Trad-
ers such as Charles Dow, Jesse Livermore, Richard Wyckoff,
and Richard Ney. All they had was the ticker tape, from which
they read the price, and the number of shares traded. In other
words, Volume Price Analysis (VPA), short and simple.

The book has been written for traders and investors who have
never come across this methodology, and also for those who
have some knowledge, and perhaps wish to learn a little more.

263
It is not revolutionary, or innovative, but just simple sound com-
mon sense, combined with logic. And here is a typical comment
from one of my readers:

“I loved your book on VPA. I have read many books on the mar-
kets but yours was the only one that generated an 'aha' moment
for me. I have deployed VPA in my trading strategies and I have
been delighted with the results.”

This is just one of the many hundreds of emails I have received

since writing the book, and you can read more on Amazon where
it is a number one best seller. 

More information at www.annacoulling.com

264
Forex For Beginners
There are of course many
books about forex trading.
What is different about this
book, is the focus on those as-
pects of trading which I be-
lieve are fundamental. After
all, there are only two ques-
tions we need to answer when
considering a position in the
market:-

What is the likely outcome on

this trade, and what is my con-
fidence in my analysis - high,
medium or low? 

And what is the financial risk

on this trade?

The first is the hardest question to answer, and the book will ex-
plain in detail the analysis and approach to use, in order to an-
swer this question with confidence. The second question is

265
more straightforward and is answered provided you have an un-
derstanding of risk, money management and position sizing in
relation to your trading capital. Again, this is covered in detail in
the book. As the tag line on the front cover says 'What you need
to know to get started, and everything in between' which really
sums up what you will learn.

The book explains everything, from the pure mechanics to the

trading methodology that I advocate, and which I have used in
all my own trading and investing for over 20 years. Forex For Be-
ginners is also dedicated to all those traders who have asked
me to write such an introduction, based on my knowledge and
my methodology.

More information at www.annacoulling.com

266
Binary Options Unmasked
Binary options - is it betting or
trading? A debate that has
been raging ever since binary
options exploded onto the
market, sweeping away con-
vention, tearing up the rule-
book, and dividing opinion. In-
deed, simply mention the
word binary and instantly a
heated debate will ensue.

But love them or loathe them,

binary options are here to
stay, and Binary Options Un-
masked has been written to
provide traders with a bal-
anced and considered view of these deceptively simple yet pow-
erful instruments. There are many traps for the unwary, but there
are also some solid gold nuggets, if you know where to look.

So are binary options for me? This is the question I hope will be
answered for you in this book. In writing it, I have tried to pro-

267
vide a complete introduction to the subject, with practical exam-
ples of how to approach these innovative instruments. Every as-
pect of this market is explained - both the good, and the bad.
Nothing is left unsaid. Binary options have much to offer, and
used with common sense and thought, are perfectly valid trad-
ing instruments. Applied unthinkingly, they become like any
other instrument - a quick way to lose money fast.

Binary Options Unmasked reveals the true characteristics of

this market. It covers the current market participants, along with
their product offering. Moreover, not only are binary options ex-
plained in detail, but their application as a trading instrument is
also illustrated. Trading strategies and approaches too are ex-
plored, along with an innovative and practical approach to inter-
preting volatility, a key component of any options trading. And
as one reader said....

“Thank you Anna - reading your book has truly opened my eyes
to the dangers ahead. I can now approach this market armed
with your invaluable knowledge. I feel I have my own personal
guide on this journey.”

268
I hope this book, will give you the confidence at least to con-
sider these instruments in more detail for yourself, with an open
mind and your eyes wide open.

More information at www.annacoulling.com

269
A Three Dimensional Approach To Forex Trad-
ing
If you aspire to becoming a
full time forex trader, then this
is the book for you. Even if
your dream is perhaps more
modest, and you simply want
to have a second income trad-
ing the forex markets, then
again, this book is for you.

And perhaps you have some

questions such as:- 

What will I learn?

How will it help me?

So let me answer those for

you.

The book has been written with one clear objective. To explain
how and why the currency markets move in the way they do -
the forces, the factors and the manipulators.

270
Many aspiring traders, simply do not realize that the forex mar-
ket sits at the heart of the financial world, which when you think
about it logically, is really common sense. After all, this is the
biggest money market in the world, and if the financial markets
are about one thing, they are about money. Making it, protecting
it, or increasing the return.

It’s no surprise therefore, the forex market connects all the oth-
ers. Put simply, the forex market is the ultimate barometer of
risk.

So how will this book help me to become a better forex trader?

Well, in several ways!

First, you will discover how changes in market sentiment in the

primary markets of commodities, stocks, bonds and equities,
are then reflected in the currency markets. This is something
which often surprises novice traders. After all, why look at a
stock index, or the price of gold, or a bond market? The answer
is very simple. It is in these markets that you will find all the
clues and signals, which then reveal money flow. After all, the fi-
nancial markets are all about risk. In other words, higher returns
for higher risk, or lower returns for lower risk.

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It really is that simple. And yet, how many forex traders ever con-
sider associated markets? And the answer is very few. After
reading the book, you will be one of those enlightened traders
who truly understands money flow and risk, and your confi-
dence as a trader will grow exponentially as a result.

The next thing you will learn is that trading in one dimension or
using one trading technique, is rather limiting. You have proba-
bly met people who trade, who then make a bold statement
such as: ‘I only trade using the fundamentals’ or perhaps that
‘technical analysis is a self fulfilling prophecy’. To trade success-
fully in the forex world requires a three dimensional approach
which embraces the fundamental, the relational and the techni-
cal and is what this book is all about.

More information at www.annacoulling.com

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Investing & Trading In Cryptocurrencies Us-
ing Volume Price Analysis
If you have not yet discovered
the world of cryptocurrencies,
in the next few years you al-
most certainly will, as they are
the latest phenomenon to take
the financial markets by
storm. And they follow in the
footsteps of binary options.

But like all new instruments

and markets, there are many
pitfalls and traps for the un-
wary, and even more so here.
And for many reasons.

First, we have an unregulated

market, and one which has no
central exchange with no transparency, and little in the way of in-
vestor protection. Second, we have a group of instruments that
are extremely volatile. Third, none of the major regulators have

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been able to agree on how to classify and regulate this instru-
ment, with some suggesting it is an asset, others a commodity,
and to some a currency.

Finally, and perhaps most worryingly of all, hundreds of new

cryptocurrencies are being launched weekly, adding to a market
that is already chaotic and largely driven by the fear of missing
out. Many have already suggested this is nothing more than a
replica of the dot com bubble or tulip mania, and one which will
all end in tears.

So, what are the facts? Should you even consider this market,
either as an investor, speculator or trader? And if so, how you
can make logical common sense investment or trading deci-
sions in such an uncertain market.

In this book, I aim to show you how, whether your purpose is to

invest for the longer term, or to trade the markets intraday. And
the only approach which can give you the insight to anticipate
future market direction with confidence for cryptocurrencies, is
by application of volume price analysis.

In the world of cryptocurrencies, volume represents the buyers

and sellers in the market, and so takes us directly to the heart of
supply and demand, as described in Wyckoff’s first law.

274
The application of volume price analysis can be traced back to
the iconic traders of the past. Trading greats such as Charles
Dow, Jesse Livermore, Richard Wyckoff and Richard Ney. All
used volume and price to build their fortunes.

Today, we have brought this methodology up to date, and

based it on the codified laws of Richard Wyckoff. Here you will
find over 100 worked examples in all timeframes and for a vari-
ety of the most popular cryptocurrencies, clearly annotated and
with detailed descriptions, to demonstrate how you can lever-
age the power of volume price analysis for trading this market.

And better still, it is an approach you can apply to your existing

trading style. There is no need to change or abandon your exist-
ing approach, something many of my readers have confirmed
with their public comments on my other books on Amazon.

So if you are considering entering the world of cryptocurrencies,

grab your copy now. Here you will find out what they are, and
perhaps what they are not. And just as important, where the op-
portunities are to be found, and how to take advantage.

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Stock Trading & Investing Using Volume
Price Analysis
In this book of over 200
worked examples for stock
traders and investors, you will
discover an approach that
was used by the iconic trad-
ers of the past to build their
vast fortunes.

Traders such as Jesse Liver-

more, Richard Wyckoff and
Richard Ney all succeeded be-
cause they understood the
power of the tape which deliv-
ered just two key pieces of in-
formation, namely volume and
price, and from which they
were able to anticipate where the market was going next.

This approach was also codified by Richard Wyckoff into three

principle laws, and forms the basis of volume price analysis. It is

276
a powerful methodology that can be applied to all markets, in-
struments and timeframes regardless of whether you are an in-
vestor, trader or speculator.

The examples presented in this book are drawn primarily from

US stock markets, but also includes examples taken from the fu-
tures markets, such as indices, commodities, currency futures
and bonds.

Each chart example is fully annotated to illustrate and highlight

key points in the associated text, and together provide a de-
tailed and comprehensive study of the volume price relation-
ship, and giving clear signals as to where the stock is going
next.

And regardless of whether you are selecting stocks for growth,

dividend yield, option strategies, or for speculative day trading,
volume price analysis will highlight which ones to buy or sell,
and when.

Armed with this knowledge, success awaits.

277
 Thank you & acknowledgements
Thank you for investing in this book and I hope you have found
the worked examples helpful in expanding your knowledge and
understanding of volume price analysis.

If you would like to discover more of my work, you can find me

on my personal site at http://www.annacoulling.com where I
write regular market analysis using volume price analysis across
all the markets. There you will find my Facebook pages and also
my Twitter feed which is http://twitter.com/annacoull and below
are details of my other books which are all available on Amazon
both in Kindle format and as paperbacks :

A Complete Guide To Volume Price Analysis

Forex For Beginners

A Three Dimensional Approach To Forex Trading

Binary Options Unmasked

I’m also the founder of Quantum Trading along with my hus-

band and trading partner David, and at Quantum Trading you
will find a range of tools and indicators developed by us for trad-
ers and investors. You will also find indicators such as the Vol-

278
ume Point Of Control which develops the idea of volume to em-
brace the volume/price/ time relationship on the Y axis of the
price chart, thereby creating a very different view of support and
resistance based on the principles of market profile and the
value area. And you can find all the details here. The indicators
are currently available for MT4, MT5 and NinjaTrader. However,
we are also working on other platforms such as Tradestation
and Multicharts.

http://www.quantumtrading.com

You may also be interested to know that David and I have devel-
oped a complete course of education for aspiring forex traders,
and this is called The Complete Forex Trading Program. The pro-
gram includes the full suite of tools and indicators from Quan-
tum Trading along with a comprehensive online learning re-
source of videos and video podcasts to help you understand all
you need to know to succeed in this uncompromising market.

All the details are here:

http://www.quantumtradingeducation.com

For stock investors and traders my personal site is regularly up-

dated with my analysis of the primary indices and individual

279
stocks based on volume price analysis. Here you will also be able
to join me in live market sessions where I am joined by my hus-
band and trading partner, where we analyse stock charts from vari-
ous markets around the world, and using volume price analysis
once again. You can find all the details here:

http://www.annacoulling.com

Finally I would like to thank NinjaTrader and MetaQuotes for allow-

ing me to use charts using their platform. Many of the chart exam-
ples in this book are from my NinjaTrader trading platform. The Nin-
jaTrader platform with the Kinetick data feed is one of the most
powerful combinations in the market, and is available on a free,
end of day basis.

You can find further details on the platform and feeds at

http://www.ninjatrader.com

The MT4 and MT5 platforms are the most popular trading plat-
forms in the world and are the perfect place to get started if you
are new to the trading world. You can find all the details at

https://www.metatrader4.com/

Finally it only remains for me to wish you every success and good
fortune in your own trading,

280
Kindest regards

Anna

I would kindly request you do not share, distribute, publish

or copy any of this material in any way, as you will then be
in breach of my copyright.

Thank you for protecting my work.

© Anna Coulling 2017

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