Page 70 - A Complete Guide to Volume Price Analysis: Read the book then read the market

Price action - weakness

The clue is in the name! Just as stopping volume was stopping the market from falling further, so topping out volume is the market topping out after
a bullish run higher.

Once again, the market does not simply stop and reverse, it has momentum, both in up trends and in down trends. The down trend pressure is
certainly more intense as the market is generally moving faster. Nevertheless, in an up trend we still have momentum generated by the insiders
driving demand. Traders and investors are jumping into the market, driven by greed and fear of missing out on easy profits. The volumes are high
and rising, and Cd rket to the insiders are now selling into this demand, driving the market higher into this selling pressure, which is building. This is
the price action we are seeing reflected in the deep upper wicks to each subsequent candle.

At this point it is becoming increasingly difficult for the insiders to keep the market momentum going, as they continue to sell at this level, with the
candles creating the ‘arcing pattern’ as the spreads narrow and the price rise slows. Volumes are well above average and probably high or ultra
high.

Fig 6.18 Topping Out Volume

In Fig 6.18 the last candle in this 'perfect' schematic is our old friend, the shooting star. We are now looking at the distribution phase which then
culminates in the selling climax, before moving off to the next phase of the market cycle.

These then are the candles, candle patterns and associated volume, you will be looking for in all markets, in all instruments and all time frames.
They are the MAJOR signals which are the wake up call to you as a VPA trader. They may be on a tick chart, they may be on a time chart. It makes
no difference. The analysis of volume and price makes no distinction. Once you have practised using the basic principles that we have covered in
the last few chapters, and further techniques you will learn in the following chapters, you will be ready to apply your new found knowledge and skills
to any market. VPA is simple, powerful and it works, and once learnt is never forgotten.

There are many other candles and candle patterns in candlestick analysis, but as I said earlier, this is not a book about Japanese candlesticks. The
ones I have illustrated here, are those that I look for all the time. They are the 'king pins' around which VPA revolves. Understand and recognise
these instantly, and you will be amazed how quickly you will become confident and assured in your trading decisions. More importantly, if you have
a position in the market you will have the confidence to stay in that position, and exit when your VPA analysis signals tell you to close out.

In the next few chapters we are going to build on our knowledge, and add further techniques, before finally putting it all together with annotated