Several volume price analysis lessons here for cable

Several volume price analysis lessons here for cable

The 5-minute chart of cable offers several lessons in volume price analysis. First, we have to wait for signals to be confirmed, which is the case in the uptrend. The weakness is signalled clearly on high volume. This is followed by further signals of weakness as the move runs out of steam, before the reversal duly begins. Then, in the downtrend, as the reversal gets underway, we see the clear re-entry signals and opportunities to jump on the trend if we missed the initial signals.

Applying Volume Price Analysis to Forex: Using Tick Volume as a Proxy

Forex is the world’s largest and most liquid market, but unlike stocks or futures, it is decentralized with no central exchange reporting true volume. This lack of centralized data means traditional volume figures are unavailable. Traders use tick volume as a proxy—the number of price changes (ticks) in a period. Tick volume correlates closely with actual trading activity, reflecting participation and conviction. High tick volume on moves signals institutional interest; low volume at extremes warns of potential reversals. Volume Price Analysis (VPA) adapts perfectly to this environment, interpreting tick volume alongside price action to reveal professional intent in spot forex and currency futures.

Roots of Volume Price Analysis: Wyckoff and Early Pioneers

Volume Price Analysis traces its origins to early 20th-century tape reading, where traders like Jesse Livermore interpreted real-time price and volume from ticker tapes. Richard Wyckoff formalized this with his three laws: Supply and Demand (volume drives price), Cause and Effect (accumulation/distribution precedes trends), and Effort vs Result (volume should match price movement). Wyckoff studied “composite operators” (institutions), teaching retail traders to spot manipulation. Later, Richard Ney exposed volume-based patterns in stock markets. These foundations emphasized volume as the market’s heartbeat—price alone deceives.

Modern VPA: Anna Coulling’s Development for Digital Markets

Anna Coulling modernized these principles for digital charts, creating Volume Price Analysis as a comprehensive methodology. Her best-selling book A Complete Guide to Volume Price Analysis adapts Wyckoff for today’s high-speed markets, incorporating candle anatomy, multi-timeframe analysis, and relational tools. In forex, where true volume is absent, VPA uses tick volume effectively—high ticks on rallies confirm strength, low ticks at extremes signal exhaustion. Quantum indicators visualize these signals: Currency Strength for relational edge, Tick Volumes for participation surges, VPOC for fair value zones.

Why VPA Works Beautifully in Spot Forex and Currency Futures

Spot forex and currency futures benefit immensely from VPA. Markets move on relational strength—strong currencies vs weak ones create trends. VPA with tick volume reveals conviction: sustained moves with rising ticks indicate institutional flows. Quantum tools enhance this—Currency Matrix visualizes pair sentiment, Trend Monitor aligns direction. In futures (e.g., 6E Euro FX), true volume adds precision, but VPA principles remain universal. Traders avoid traps (false breakouts on low volume) and time entries/exits with confidence across timeframes.

Master VPA for forex and futures at Quantum Trading Education. Anna Coulling’s programs teach from foundations to advanced strategies—enrol today for a professional edge.

By Anna Coulling – creator of volume price analysis