Page 90 - A Complete Guide to Volume Price Analysis: Read the book then read the market

looking for a pivot low to form initially, followed by a pivot high, as we can see in Fig 8.15.

Fig 8.15 Dynamic Trend Lines – Bearish Trend

In summary, and to put all of this into context. There is nothing wrong with drawing what I call 'static' trend lines on a price chart, and in many ways
this is what we have done here. The difference however, is that the trend lines in this chapter have been created by the dynamic price action of the
market. Obviously this is hard to present in a book, and is best seen live in action as the market unfolds. Nevertheless, what I have tried to describe
here is the process of analysis and price action which describes where we are in our trading journey, or perhaps more importantly where the
market is in its trading journey.

The pivots are formed dynamically, and as they are created, so the trend is built which we can then define using these points as our 'way points' on
the journey. Nothing is ever perfect, but at least using VPA, and your understanding of the importance of price congestion, should put you into a
strong position, allowing you to identify a trend BEFORE it starts, and not after. This is what I have tried to explain in the last two chapters, and I
hope that in reading them you will at least have a better understanding of how markets behave and the importance of price congestion.

As I have said before, many traders become frustrated when markets move into a congestion phase, which I find hard to understand. This is where
the market is preparing the next trend. These areas are the breeding grounds for trends, and in many ways far more important than any existing
trend, since this is a new trend, from which we can take advantage, early. It really is that simple. It may be a selling climax or a buying climax, it may
be a pause in a longer term trend. Whatever the reason, and whatever the timeframe, you can be sure of one thing. The market is preparing for a
move away from this region, it is just building up strength and preparing to breakout, one way or the other. All we have to do is be patient, wait, and
then apply VPA to the consequent price action, coupled with our pivots which highlight the journey.

Chapter Nine

Volume At Price (VAP)

In a bull market it is better to always work on the bull side; in a bear market, on the bear side.
Charles Dow (1851-1902)

At the start of this book I made the statement that there is nothing new in trading, and that volume has been around for over a century. It was the
iconic traders of the past with their tape reading skills who laid the foundations for today's VPA traders.