Page 29 - A Complete Guide to Volume Price Analysis: Read the book then read the market

In the example in Fig 4.10 of a wide spread up candle with small wicks to top and bottom, the associated volume is well above average, so the
volume is validating the price action.

In this case we have a market which is bullish, and has risen strongly in the trading session closing just below the high of the session. If this is a
valid move then we would expect to see the effort required to push the market higher, reflected in the volume.

Remember, this is also Wyckoff's third law of effort vs. result. It takes effort for the market to rise and also takes effort for the market to fall, so if
there has been a large change in price in the session, then we expect to see this validated by a well above average volume bar. Which we have.
Therefore, in this case the volume validates the price. And from this we can assume two things. First, that the price move is genuine, and has not
been manipulated by the market makers, and second, that for the time being, the market is bullish, and until we see an anomaly signalled, then we
can continue to maintain any long position that we may have in the market.

Fig 4.11 Narrow Spread Candle, Low Volume

Fig 4.11 is an example of a narrow spread candle accompanied by low volume. In this case the price has risen, but only marginally higher, and the
spread of the candle is therefore very narrow. The wicks to the top and bottom are once again small. The associated volume is well below average,
and again the question that we have to ask ourselves is simple. Is the volume validating the price action, and the answer once again is yes. And the
reason is again because of effort and result. In this case the market has only risen in price by a small amount, and therefore we would expect to see
this reflected in the volume, which should also be low. After all, if effort and result validate one another, the effort required to move the market a few
points higher (the result), should only warrant a small amount of effort (the volume). So once again, we have a true picture with the volume validating
the price. Now let's look at these two examples again, but this time as anomalies.