23rd May 2024

 Volume Price Analysis (VPA) is a trading method that combines price action with trading volume to predict market trends and potential reversals. It is based on the idea that volume precedes price movements, meaning that changes in volume can indicate future price directions.

  1. Key Concepts in VPA:

    1. Volume: The number of shares or contracts traded in a security or market during a given period. High volume often indicates strong interest and potential for significant price movement.

    2. Price Action: The movement of a security's price over time, which helps identify trends, support and resistance levels, and potential reversals.

    3. Volume-Price Relationship: By analyzing how volume changes in relation to price movements, traders can infer the strength of a trend or the likelihood of a reversal. For example, rising prices on increasing volume suggest a strong uptrend, while rising prices on decreasing volume might indicate weakening momentum.

    4. Confirmation and Divergence: Volume can confirm price trends or signal divergences. A price rise confirmed by increasing volume suggests a sustainable uptrend, whereas a divergence (e.g., price rising but volume falling) may indicate a potential reversal.

This strategy differs from trend following. While observing the market dynamics, it can be more effective on a 5-minute timeframe. It's important to remember that this is my personal perspective, and successful stock traders employ various methods. This strategy, however, is well-suited for scalping and is known as Volume Price Analysis (VPA). As the name suggests, trades are executed based solely on volume and price analysis. 


For 23rd May 2024 trading session:-

  1. We observed a market rise, though it's unclear whether this was due to the election or not. However, we identified four clear signals where taking positions could have been profitable.


    Point 1: At this point, the market formed a tight base and a trend reversal candle. Initially, the market was trending slightly downward. After the reversal candle appeared, the trend shifted upwards, signaling a potential buying opportunity.


    Point 2: Here, we observed a classic reversal candle, indicating another strong buy signal. This candle often marks the beginning of a new upward trend.


    Point 3: At this point, the market formed a tight base again, providing another opportunity to take a position in anticipation of further upward movement.


    Point 4: The market formed a reversal pattern rather than a reversal candle. Typically, this pattern would suggest a significant downturn. However, given the market's high momentum at the time, it reacted differently, continuing its upward trend.


  2. By recognizing these signals and understanding their implications, traders can make informed decisions and profit from both market rises and downturns.








Anna Coulling provides a comprehensive explanation of this strategy in her book, "A Complete Guide to Volume Price Analysis."


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