A Complete Guide To Volume Price Analysis Read the book .. ...then read the market By Anna Coulling www.annacoulling.com A Complete Guide To Volume Price Analysis © 2013 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 futures, stocks or forex. The information is for educational purposes only. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in this publication. Past performance of indicators or methodology are not necessarily indicative of future results. The advice and strategies contained 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, incidental, consequential, or other damages. Who this book is for If you are struggling to succeed and find your trading stressful and emotional, then this book is for you. By the end of it, you will have discovered how to banish these emotions FOREVER. You will become a confident and emotionless traders, as all your decisions will be based on simple logic and common sense. You will be able to forecast the market’s next move, quickly, easily and with confidence. From confidence comes success, and from success comes wealth. Trade without emotion and you will succeed whether as a speculator or investor, in ANY market. Yes, INCLUDING forex! It has been written by someone with over 16 years trading experience who uses this approach every day, so you will be learning from someone ‘who does’. There are only two leading indicators in trading. One is price, the other is volume. In isolation, they are weak and reveal little, but put them together, and just like gunpowder, they become an explosive combination. In discovering the power of Volume Price Analysis for yourself, you will be shocked and wonder why you never used this before. Suddenly you will be able to read the market, BEFORE it moves. When this happens for the first time, you will be shocked, surprised, even stunned. Then the truth will dawn on you. Using two simple indicators, you now have the power and knowledge to anticipate the market’s next move. In short, Volume Price Analysis reveals the DNA of the market, and places this awesome power in the palm of your hand. You will become a confident and assured trader. Emotional trading and stress will be banished forever. You will start to enjoy your trading, for one simple reason. You KNOW where the market is going next based on simple logic and the power of volume and price. What this book covers A Complete Guide To Volume Price Analysis explains everything you need to know to apply VPA in your own trading. Each chapter builds on the next, working from first principles on both price and volume before bringing them together, using simple and clear examples. Suddenly as you delve deeper in the book you will begin to understand the insights that Volume Price Analysis can deliver for you, in all markets and in all timeframes. Table of Contents Foreward An introduction to Volume Price Analysis and how it all began for me. I was one of the lucky traders who began my own journey in trading based on volume. It has been the cornerstone of my success and I want it to be yours as well. This is why I wrote the book. To help you, achieve your own personal ambitions through trading. Volume Price Analysis is the ONLY way to reveal the secrets of the market and in doing so, follow the ‘smart money’. Chapter One : There’s Nothing New In Trading If you thought that Volume Price Analysis was a new concept. Think again. This was the approach used by the iconic traders of the past, such as Charles Dow, Jesse Livermore, and Richard Wyckoff. These traders built huge fortunes using this technique, using nothing more than the ticker tape, pencil and paper. Here I explain how they achieved their success, and how little the concepts have changed in over a 100 years. Chapter Two : Why Volume Not an unreasonable question. In this chapter I explain why volume is the ONLY leading indicator, which when combined with price, truly reveals the future direction of the market. In addition, volume reveals something EQUALLY important. Whether the price action is valid or false. Chapter Three : The Right Price The second component which then creates the explosive combination, of VPA. Price on its own simply reveals the buying and the selling. What it never reveals is the extent of any future price move, and more importantly whether that price move is a fake move. Chapter Four : Volume Price Analysis - First Principles Here I introduce the basic building blocks of Volume Price Analysis. In simple terms we are really only looking for one of two things in our analysis. Either a confirmation that volume and price are in agreement, or an anomaly, where volume and price do NOT agree. This is then our first warning signal of a possible change. Chapter Five : Volume Price Analysis - Building The Picture In this chapter I explain the concepts of accumulation and distribution which underpin Volume Price Analysis. These occur in all time frames and in all markets and are rounded off with the firework display, which is the selling or buying climax. This marks the end of the campaign and the start of a new trend. All we have to do, is follow the insiders, and buy and sell, when they are buying and selling. In this chapter you will discover how to see this for yourself in any market. Chapter Six : Volume Price Analysis - The Next Level Here we start to build on the concepts from the previous chapter and begin to look at VPA in action using the three most powerful candles. In addition I explain stopping volume and topping out volume, as we start to build our VPA knowledge into a complete approach to market analysis. Chapter Seven : Support And Resistance Explained Support and resistance is one of the cornerstones of technical trading. Yet when combined with volume, this essential technique becomes even more powerful. Few traders ever discover how to identify when the markets are moving into a congestion phase, or equally important to validate when they are breaking out. In this chapter you will discover both! Chapter Eight : Dynamic Trends And Trend Lines Forget traditional trend and trend lines. By the time these are developed you are just getting in when the smart money is getting out! In this chapter you will learn how to create dynamic trend lines, which when coupled with VPA get you in at the start of the trend, and NOT at the end. If you have ever struggled with the concept of traditional trend theory, this is for you and will revolutionize your trading. Chapter Nine : Volume At Price (VAP) Volume Price Analysis or VPA is one thing. Volume at price of VAP is something entirely different, and which gives you a visual and instant picture of the density of volumes at price levels on the chart. This is so powerful, it’s amazing more traders don’t use this approach. After all, a breakout from one of these regions means one thing - a new trend! And when confirmed with VPA - money! Chapter Ten : Volume Price Analysis Examples Here we examine some ‘worked’ examples across various markets in detail. See VPA applied to stocks in the cash markets, currencies in the spot FX market, indices in the futures markets and commodities using tick charts. In fact virtually every market and type of chart from tick to time based charts, all detailed and annotated for you. If you still need to be convinced, I hope this chapter will do it for you! Chapter Eleven : Putting It All Together Now it’s time to pull all the elements together. In addition I explain some of the most powerful congestion patterns which have worked consistently over 16 years of trading, and when combined with volume, give us simple and clear trading opportunities - provided you can be patient! Chapter Twelve : Volume And Price - The Next Generation In the final chapter I introduce some of the latest developments in Volume Price Analysis, and where this methodology may go in the future. Charles Dow and the other iconic traders of the past would love these extensions of their original work. Acknowledgments & Trader Resources List of the chart providers used in this book along with details of free resources for traders. Testimonials Hi Anna, Made up my mind.. I want to learn “forex trading” – after many months searching online you’re the only authentic person I come across!! Can you help me?? Regards, Ali Hello Anna, Just found your site and am starting to dig in – seems like an endless source of knowledge – thank you for your effort to put it up. I am new to forex – still study the bits. My tendency is for buff trading-price action. Question is: how do you identify the psychology of the market? Hello Ms Anna....! I am very much impressed with your articles and your success story in the FX world. I am a beginner...You may also call me a newbie..as I only know the operation of the MT4 - platform...none of others...Since, it is my beginning...I will try all my best to learn, as much as I can, from anywhere in the world...Kind regards, - MBZ Hi Anna That was really a nice and wonderful update of the market. I really enjoy it and wish the best in your trading. But I still continue to ask to be shown how to get the USD index install in my system. And are you still trading the forex fixed odd. Which broker do you use for that. Thanks for your time. Kevin Hi Anna, Love your Covered Call website. Lucid and wise. I’m now a believer.................. Regards Gordon Hi Anna, Your site(s) are absolutely brilliant! Really informative and well written.......... Kind regards. Rich Hello Anna I am enjoying your many websites and wish that I had found you a long time ago. I appreciate your writing style and content. Please include me on the list for your book. How often do you publish your newsletter? Best wishes James Hi Anna you are a daisy amongst weeds !! thank you for your reply – I think I will stick to initial path for a while yet since travelled so far down this route......thanks again Anna Hi Anna, your site is excellent – I wish I had found you sooner!! thank you for sharing such valuable information – it really is priceless, well written and comprehensive – I too am interested in your book. Ann Hi Anna Very useful thoughts as usual, thank you – I presume the hammer candle is a “reversal” indicator – i.e. you could have the reverse situation after a period of increasing prices? Regards Alex How I use the CFTC cot data - I’ve been a follower of Anna Coulling for a while now. I suggest you check out this video. She’s worth bookmarking in my opinion. [...] One of my favourite analysts whom I frequently check for her across the Pond perspective is Anna Coulling and her thoughts today are worth reading: Gold Forming Strong Pennant on Daily Chart. Hi Anna, Great to meet you at the traders expo . I will keep an eye on your web site. Hi Anna, I have followed your website and Facebook page for a while now and I find your work really helpful – thanks! I see gold has now broken through the triple top resistance of $1,425 – so I’ve bought GLD LEAPS and Gold June 2011 futures today – but now I see your comment about buying on strength – have I jumped the gun and bought too early do you think? Regards Alex Foreward This is the best of times for those willing to study, learn quickly, work hard … learn from the past to succeed in the future. Robert Kiyosaki (1947-) This is a very personal book for me, and one I have been planning to write for many years. Finally I have found the time to write it! I hope, that once you have read it, the single analytical trading technique I am going to share with you, will have as profound an effect on your trading, as it has had on mine. I stumbled on this methodology many years ago, in an almost surreal way, when I first became interested in trading. And I am eternally grateful that I did, even though, as you will see, it cost me a great deal of money at the time. Learning this method, was a defining moment in my life and trading career. I hope that this book will be equally life changing for you too. So what is this trading technique and what makes it so special? Well, it's been around for over 100 years, and was used by all the iconic traders of the past. Despite this heritage, many traders today, ignore (or are unaware) of this immensely effective analytical method. Why this is, I have no idea. It has been the cornerstone of my own trading and investing for over 16 years, and remains so today. It is immensely powerful, and in many ways 'just makes sense'. My purpose in writing this book is to convince you to embrace this for yourself. All I ask is that you open your mind, and accept the simple logic and power of what I refer to as Volume Price Analysis, or VPA for short. Volume Price Analysis is my own terminology. You will not find this description anywhere else. The reason I use it, is that it precisely describes the methodology in three simple words. After all, as traders, there is only one question we want answered with some degree of certainty, every time we trade. The question is 'where is the price going next.’ Volume Price Analysis will answer this question for you. It can be applied to all markets in all time frames, and can be used to trade all instruments. Using volume to validate and forecast future price action, has been at the heart of my trading success, and I hope that in reading this book, it will change your approach to trading forever. As I said earlier, please just open your mind to the simple logic that is VPA, and once you have read this book, you will be able to interpret charts, and forecast price action, instantly. The first time this happens will be a life changing moment for you, as you suddenly realise that you have the most powerful trading technique at your finger tips. As a trader you will become confident and calm, as your trading decisions will be based on logic, and on your own analysis of the price volume relationship. However, as I said earlier, there is nothing new or mystical here. The methodology you will discover is grounded in the approach used by the iconic traders of the past. For them, there were no computers or the internet. Everything was done manually, with hand drawn charts, and price reading from a paper tape. We are lucky. All this is now done for us, on an electronic chart. All we have to do is interpret the price volume relationship, and to do that you need a good teacher. I hope to be that teacher, and deliver the lessons in this book. However, how did I stumble on volume, and its symbiotic and interdependent relationship price? Well, it is a rather odd story, and in relating it, I hope it will become apparent, that even though it was hugely expensive, in hindsight I know I have been lucky, because I started my trading journey with volume. Many traders spend years trying different trading approaches, becoming increasingly disillusioned as each one fails to live up to the expectations of the marketing hype, before arriving at the same conclusion. It is only in hindsight I can appreciate how extremely fortunate I have been, and now I want to share this knowledge with you. So, if you are reading this book as a novice trader, then you too are lucky. You have avoided the pain and expense of a long, fruitless journey. If you are a seasoned trader, welcome to this book and I hope that it fulfils your expectations, and that you have enough enthusiasm left for reading just one more book about trading! In telling my story here, I have not changed any of the names, and many of these people are still involved in the trading world. How It All Started In the late 1990’s I couldn’t understand why my pension and investments did not reflect what was happening in the stock market, which was extremely bullish. In these dark days before the internet I could only rely on newspapers, and it was in January 1998 that I read an article in the Sunday Times about a trader who had made significant sums from trading, and was now looking for recruits to train in his methods. That trader’s name was Albert Labos. Two weeks later, on an early Sunday morning, I joined hundreds of other hopefuls in a packed room, on the HMS President. The President is a famous anti-submarine Q-ship completed in 1918 moored on the River Thames close to Blackfriars Bridge. I arrived, cheque book in hand, ready to sign up to whatever was on offer. The event was shrouded in mystery from the start. First, Albert exhorted the 'spies' in the room to leave. He knew who they were and why they were there, and as he told us later, these were spies from the major banks, come to learn his secret trading techniques. These were trading techniques which could take on the cartel, currently enjoyed by these market makers. We were then introduced to a Tom Williams. We were told that Tom was partially sighted, and I can’t quite remember if he had a white cane. We were also told that Tom was an ex ‘syndicate trader’. However, to this day I am not entirely certain what a ‘syndicate trader’ is or does. But at the time it sounded very impressive. Various charts were presented during the pitch and all the while Albert explained he was searching for an elite group of traders. However, spaces were limited and only a select few would be taken and trained. Like many others there I wanted to join, and happily paid my £5,000 for a two week course, grateful to have been accepted for this ‘once in a lifetime opportunity’. If all the above sounds slightly bizarre, it was, but I felt confident because Albert had been endorsed by a very reputable newspaper, and I was anxious to learn. During the two week course we had to write an essay and we were encouraged to read Reminiscences of a Stock Operator by Edwin Lefevre, which is a thinly disguised biography of Jesse Livermore. A book all traders and investors should read. Throughout the two weeks, the over-riding message was that all financial markets are manipulated in one way or another. And the only way to know whether a price move was genuine or false was by using volume. Volume cannot be hidden. It is there for everyone to see. I was so convinced by the volume story that I also persuaded my husband, David to take Albert’s course. With hindsight the costs were outrageous as the course could have been condensed into a couple of days. However, David and I took the basic principles of price and volume and since then, have integrated them into our own trading and investing methodology. In the intervening years, we have successfully traded virtually every market, and for the past five years have shared our knowledge and experience across our network of 70 websites. This book now gives us the opportunity to pass on this knowledge in more detail to the next generation of traders and investors, of which I hope you will be one.