Page 42 - A Complete Guide to Volume Price Analysis: Read the book then read the market

Fig 5.10 The Accumulation Phase

Whilst Fig 5.10 is a graphical representation of the price action, nevertheless I hope it gives a sense of what this looks like on a real chart. The
repeated buying by the insiders is highlighted in blue.

I have deliberately avoided using a scale on the chart, either in terms of price or time, as I believe it is the 'shape' of the price and associated
volume bars which is important. This is the price action which creates the classic price congestion which we see in all time frames, and which is
why this ‘shape’ is so powerful, when associated with volume. This is what gives price action, the three dimensional perspective using VPA.

Once the campaign has begun, the price action then follows this typical pattern, where the market is repeatedly moved higher and lower. This type
of price action is essential to 'shake' sellers out of the market. We can think of this as shaking fruit from a tree, or as we do in Italy, harvesting the
olives! The tree has to be shaken repeatedly in order for all the crop to fall. Some of the crop is more firmly attached and takes effort to release.
This is the same in the financial markets. Some holders will refuse to sell, despite this constant whipsaw action, but eventually they give up after
several 'false dawns', generally on the point when the campaign is almost over, with the insiders preparing to take the market higher with fully
stocked warehouses. So the campaign comes to an end. It is all over, until the next time!

This is repeated over and over again, in all time frames and in all markets. If we take the cause and effect rule of Wyckoff, the above price action
could be a 'secondary' phase in a much longer term cycle, which is something I cover in more detail once we start to look at multiple time frames.

Everything, as Einstein said, is relative.

If we took a 50 year chart of an instrument, there would be hundreds of accumulation phases within the 50 year trend. By contrast an accumulation
phase in a currency pair, might last a few hours, or perhaps only a few days.

And the reason for this difference is to do with the nature and structure of market. The equity market is a very different market to bonds and
commodities. In equities for example, this phase might last days, weeks or months, and I cover this in detail when we look at the characteristics of
each market and its internal and external influences, which create the nuances for us as VPA traders.

The key point is this. Just recognise the price action and associated volume for what it is. This is the insiders manipulating the market in
preparation for an extended price move higher. It may be a small move (cause and effect) based on a short time period, or a more significant move
based on a longer phase. And if you think that perhaps this is a fantasy, let me just quote from Richard Ney again, and this time from his second
book, The Wall Street Gang.

“On November 22, 1963, the day President Kennedy was assassinated, specialists used the alibi provided by the tragedy to clean out their