Great VPA lessons on the CAD/JPY

Great Volume Price Analysis Lessons On The CAD/JPY

Some classic price action on the CAD/JPY daily chart, and in particular, several volume price analysis lessons to take away. First, note the volume anomaly on the wide spread up candle. Volume is average, so the market makers are not participating, as the trap is set. Clearly, volume and price are not in agreement, and this is a sure signal of weakness ahead.

The price waterfall is developing as expected, and note the rising volume in a falling market, confirming the strength of the trend. Finally, in the last few days, we have had a two-bar reversal on good volume, with the currency pair looking weak. And remember, the Canadian dollar is closely associated with oil and with the recent fall in oil prices, this has also been reflected in the currency and one of the topics I cover in my free forex webclass.

Volume Price Analysis (VPA) 101: A Beginner’s Introduction

Volume Price Analysis (VPA) is one of the oldest and most reliable ways to read the real story behind market movements. Unlike many modern indicators that rely solely on price or complex formulas, VPA looks at only two things: price and volume. The core idea is straightforward:

Price tells you what happened. Volume tells you why it happened and who was behind it.

When price and volume are in agreement, the move is healthy and likely to continue. When they disagree (anomaly), the move is suspect and often signals a reversal or trap. VPA helps traders see institutional intent—accumulation, distribution, exhaustion, or conviction—before the crowd reacts.

This methodology was born from early tape reading (Jesse Livermore, Richard Wyckoff) and later refined by Anna Coulling into a modern, practical system used by traders across forex, stocks, futures, commodities, and even cryptocurrencies.

Rising Volume on a Price Waterfall – The Classic Exhaustion Signal

One of the most powerful and visually striking VPA signals is rising volume on a price waterfall (also called a “waterfall decline” or “selling climax”).

A price waterfall is a sharp, steep drop in price—often several candles in a row with large bodies and little overlap, looking like a near-vertical fall on the chart. When this drop is accompanied by increasing volume (volume bars getting taller as price falls faster), it is a very strong sign of exhaustion at the bottom.

Why this combination is so significant:

• The sharp fall represents panic or capitulation selling.
• Rising volume shows that more and more participants are throwing in the towel—retail traders are dumping positions, stop-losses are being hit, weak hands are exiting.
• At some point, the selling pressure becomes so intense that all the willing sellers have already sold.
• Once the last seller is out, there is no more supply left at that price level.
• The market then finds a natural floor—professional buyers (institutions) step in quietly because the price is now attractive.

This is classic stopping volume or selling climax. In Wyckoff terms, it’s the end of the distribution or markdown phase and the beginning of potential accumulation.

What traders should look for after the waterfall:

• A sudden halt or hammer/doji candle on very high volume (absorption).
• The next candle closing higher (confirmation of reversal).
• Volume drying up on any re-test of the low (no more sellers left).

When you see rising volume on a waterfall followed by these signs, it is one of the highest-probability reversal setups in VPA.

Real-world application examples:

• Forex: GBP/JPY or AUD/USD after a sharp news-driven sell-off.
• Stocks: Individual names or sector ETFs after earnings panic.
• Futures: E-mini S&P or crude oil after macro shock.
• Crypto: BTC or ETH after liquidations cascade.

VPA teaches you to wait for that high-volume capitulation rather than trying to catch the falling knife early. Patience at these extremes often separates winning trades from losses.

Want to master spotting these climactic moves? Quantum Trading Education programs teach VPA step-by-step with Anna Coulling—perfect for traders who want to see the truth behind the price action.

By Anna Coulling – creator of volume price analysis