Page 24 - A Complete Guide to Volume Price Analysis: Read the book then read the market

We could say that VPA is our big picture of theighcture o volume price relationship on the outside of the candle, whilst VAP gives us the detail of
the volume profile, 'inside' the candle. This helps to give us an additional perspective on our 'outside' view – two views of the same thing, but from
different perspectives, with one validating the other. A further triangulation of the volume and price relationship.

Now let's look at our other example, which was the upper wick example.

Upper Wick Example

Fig 3.13 Upper Wick Example

In this example the market opened with the buyers immediately taking control, forcing the price higher, and overcoming the sellers, who are
compelled to admit defeat under the buying pressure. However, as the session develops the price action reaches a point at which the buyers are
beginning to struggle, the market is becoming resistant to higher prices and gradually the sellers begin to regain control.

Finally, at the high of the session, the buyers run out of steam and as the sellers come into the market, the buyers close out their profits. This selling
pressure then forces prices lower, as waves of sellers hit the price action.

The candle closes back at the open price and the session closes. Once again, there are two key points with this price behaviour which are
fundamental.

First, we have a complete reversal in market sentiment, this time from bullish to bearish. Second, the sentiment at the close is bearish, as the open
and closing price are the same.

Again, this is a stylised view of the price behaviour. Nevertheless, this is what has happened over the session of the candle, and it makes no
difference as to what time frame we are considering.

This could be a candle on a tick chart, a 5 minute chart, a daily chart or a weekly chart, and this is where the concept of time comes into play. This
type of price action, accompanied with the correct volume profiles, is going to have a significantly greater effect when seen on a daily or weekly
chart, then when seen on a 1 minute or 5 minute chart.

This is something we will cover in more detail in the next few chapters.

But, what does this price action look like on a price chart in candle form?