(Summary & Review)

Several authors have attempted to publish books that provide stock market trading “tricks of the trade” or “trading for dummies” series that when applied, have the potential to improve the trader’s potential for success in the markets. A Complete Guide to Volume Price Analysis is a practical guide to for traders who desire to include volume price analysis in their trades. Coulling supported that the fundamental tenets of volume price analysis are relevant, relative, and unchanging and may applied to any market instruments for any period. This paper will present a summary and review of the book, with a focus upon Coulling’s perspectives of several aspects of trading, to include chart/volume anomalies; buying pressure versus selling pressure; and accumulation and distribution.

About the Author

            Anna Coulling is a commodities, currency and equities trader as well as an author of several investing publications around the world. Coulling also has developed several websites that serve as free introductions to trading and other financial issues for first time traders. Upcoming projects include publications in regard to vanilla and exotic options; stocks; futures and futures markets; and commodity trading. Coulling capitalizes on the rewards of a global Internet presence with several Facebook pages based upon the type of market and free training rooms. The author also Twitters each day in regard to trading opportunities; trades; and trading news. Coulling trained to become a futures market trader under Albert Labos; and now has a motivation to produce market trading teaching material that is driven by the motto “the more you learn, the more you earn”.


            A Complete Guide to Volume Price Analysis is written based upon the author’s personal experiences as a trader and how volume price analysis supported and even improved her personal strategies to forecasting the market direction. The author supports that volume trading must be based upon the wholesaler perspective. The book provides a brief historical narrative of the evolution of trading from the tape to electronic markets and the trading philosophies of stock market trading pioneers. Of all Coulling’s publications, the book that she urges readers to read first is A Complete Guide to Volume Price Analysis; as volume price analysis reveals “the market DNA”.

            Coulling began as a volume trader and it became a significant contribution to her overall success. The author asserts that volume cannot be hidden; and therefore, mastering volume price analysis methodology prepares the small investment trader to apply the concept across all markets and financial instruments. Volume trading should be the foundation of subsequent trading strategies; which are confirmed by the volume analysis. Couling described volume trading as an art and relies heavily upon candle patterns to demonstrate her methods.

Trading and Emotions

            The forward to the book admonishes the reader to eliminate the distraction and pressure that is generated by the emotions; which have the capacity to promote bad decision making in the ‘emotional trading’ process.  Coulling provides guidance for the individual investor in regard to harnessing personal emotions that hinder progressive, successful trading. The book stresses the importance of a focus upon trading and volume price analysis and trading without regard to emotions. The objective of the beginner trader should be to achieve confident and emotionless trading and to forecast the market based upon common sense and logic.

            Coulling describes the predominating emotional auras that emanated from the atmosphere on the trading floors as fear and greed. Here, the insider or specialist capitalizes upon predictions of trader behavior in response to movement designed to manipulate the market. Figure 1 supports the analogies made in the text in an illustration of a Bull trend:

Figure 1. Fear and Greed: Bull Trend

Greed is the predominant emotion at the top of the first wave; and fear  and relief are the predominating emotions at the onset of the second wave. The emotional, nervous trader continuously dreads missing out on golden opportunities to profit. When “extreme levels of psychological greed and fear” drive the decision making process, it fuels price actions within the price congestion phase of stock market behavior.

Important Terms

            A diversity of important financial trading terms are defined in the guide; the most significant of which include:

•       Anomaly – discrepancies or abnormal occurrences that disrupt the smooth market pattern

•       Buying climax – the market has declined sharply below the price waterfall and bearish trend; while volume is massive. Wholesalers are buying and retailers are selling.

•       Licensed insiders – speculators that observe the market supply and demand from both internal external perspectives.

•       Price action trading (PAT) – trading methods that are based upon market price analysis.

•       Tick volume – the measure of the trading activity that reflects the contract size.

•       Selling climax – at the peak of a bullish trend; high volumes are sustained. Wholesalers are selling and retailers are buying.

•       Volume at Price (VAP) – a representation of the buying and selling action inside of the candle.

Buying Pressure and Selling Pressure

            The guide instructs that the purest form of buying and selling occurs in the futures market, and provides indicators that the market is on the decline. The daily buying interests are reflected and whether price action is being validated. In turn, the price action encompasses all of the views, news and trading decisions of investors and traders all over the globe.

            The buy and sell grades are indicators of the trader’s position (Elder, 2015). Coulling’s perspectives of supply and demand, and buying and selling are based upon the investment ideologies of Richard Ney. The concept of buying selling was defined in the book based upon Ney’s 8 laws:

1.    The seller expects to sell stock purchased at wholesale at retail prices.

2.    The longer the seller does business, the more capital is accumulated to invest in more stock at wholesale.

3.    Communications media expansion will attract more traders to the market; and due to the law of supply and demand, the increase in traders will increase stock price volatility.

4.    The purchase of massive quantities of stocks requires innovative methods by the seller to enhance sales, such as the use of mass media.

5.    The employment of ever increasing resources requires an effect on the price declines in dimensions that are ever increasing in order to extract substantial amounts of stock.

6.    Advances must become more dramatic in regard to the upside in order to attract interest and to distribute ever increasing inventories that have been accumulated.

7.    The majority of active stocks require longer periods for distribution.

8.    The economy will experience inflation, higher interest rates, unemployment, and materials shortages due to subjection to breakdowns.

The buying and selling pressure is directly affected by the entry of the buyers and the subsequent forcing of the prices toward the ceiling. Figure 2 shows the triangulation of price and volume relative to buying pressure in the upper wick of the candle:

Figure 2. Buying and Selling Pressure

Under buying pressure, which is depicted on the blue side of the chart, the sellers must succumb to the higher prices. Over time, the price action maximizes and the market becomes resistant to the price hikes. The red side of the chart depicts the sellers entry into the market as the buyers close out profit. The selling pressure results in lower prices. From here, Coulling presents the basic principles of volume price analysis and extends to concepts of validation and anomalies using candle patterns.

Volume Price Analysis

            Volume analysis is the primary focus of the trading strategy, as the price analysis is limited to indicators for buying and selling. Coulling’s approach to volume trading is grounding in the perspective that volume reveals market activity; volume reveals the true drivers of price action; and volume validates the stock price.  The entire conceptualization of volume trading centers upon the assumption that identifying and replicating the institutional investor trading strategies and behaviors is a rational approach for speculators and individual traders. A basic illustration of an electronic ticker is presented that shows different displays of stock that include or omit the volume information. Coulling notes that in a series of price and volume changes for an asset, the time between the fluctuations; the average price and average volume must also be considered as key factors.

            The volume price analysis encompasses an analysis of price behaviors relative to volume through searches for anomalies and confirmations and comparisons of volume history and volume strength. The fundamental principles ofvolume price analysis are defined as:

1) Volume price analysis is an art rather than a science 

2) Patience is required 

3) Everything is relative

4) Practice breeds perfection

5) Volume price analysis is a form of technical analysis

6) The analysis searches for either price validation or anomalies

            Scenarios in which the market is bullish, volume is increasing and futures prices are increasing, the indication is that the price action is validated by volume that is associated with the asset. Further, a large number of investors are seeking buy-in positions. In this light, the book defines volume price trading, the impact of volume on the trade, and why volume analysis is a valid approach to interpretations of market trends.

            Coulling continually stresses the significance of understanding that volume also reveals whether the price action is true or false. The volume movements are differentiated as to low volume potentially being false; to the likelihood of high volume movements being valid and potentially the beginning of a trend. Scenarios in which the market prices are decreasing and volume is increasing; the volume is validating the market price.

            Differences in interpretations are noted for the forex market and the futures markets; as in the forex market the volume is not reported. The market is forex market is characterized by variations in tick volume and data quality is based upon the broker liquidity pool subscription and the use of feeds. Coulling supports that the tick volume is a valid proxy for assessments of volume and that the market activity for the forex is a valid representation of volume.

            Coulling’s concept of volume fully supports the tenets of Richard Wyckoff, who also highly valued volume as an indicator of market behavior. Three key points in regard to volume were presented in the guide as:

1.    All volume is may be considered as relative.

2.    Volume data without price data is not useful.

3.    Market pressure and time significantly impact volume

To deter the use of volume information, institutional traders will often avoid reports of large stock volume movements through delays in information in order to prevent traders from gaining perspectives of inside the market. Further, Coulling noted that any fraction of hesitation on the part of the trader is an indicator that the trader is approaching his or her limit in the bidding process.

Chart/Volume Anomalies

            The Guide addresses anomalies within the financial markets as defined by (George & Elton, 2001); (Tversky & Kahneman, 1986); and (Silver, 2011). The anomalies are also discussed relative Wyckoff’s Law of Effort and Result along with concepts from  Livermore and J.P. Morgan. The market anomaly is an abnormal or unusual occurrence that disrupts the smooth market pattern, which is similar in concept to the statistical outlier (Latif et al, 2011). Coulling presented that the anomaly must be researched to discover the source or origin. (Latif et al, 2011) described fundamental anomalies as value anomalies and the small cap effect; high dividend yield; low price to book; low price to sales and low price to earnings. The effect of calendar effects of anomalies is illustrated with respect to the differences in effect for anomaly:

•       Weekend Effect – Stock prices will fall on Mondays with closing pricing less than the prior Friday

•       January Effect – Small company stock generates a higher return than other assets

•       Turn-of-the-Month Effect – Stock prices tend to increase on the last day of trading in the following month and within the first three days of the following month.

•       Turn-of-the Year Effect – Stock price and trading volume increases in the last week of the month of December and the first 15 days of January.

The technical anomaly is classified based upon moving averages and the trading range break. Coulling advises that when an anomaly has been observed; it is necessary to determine if the trading has been a part of a trend; incorporate the appropriate analytical tools; and create triangulation. Based upon the Law of Effort versus Result, the determinations of validation or anomaly may occur on two levels in the candle trading pattern: within the candle volume-price relationship and the collective volume-price relationships from a group of candles.

Candle Trading Pattern

            The author’s preference for candle trend patterns over other chart options is justified in that the candle provides the highest degree of description and offers the most in-depth perspective. The candle trading pattern wick is ranked as a highly significant consideration in regard to volume price analysis. Coulling supports that the volume at price is an illustration of the volume-price relationship on the outside of the candle. The hammer candle and the shooting star are regarded as the most important candle patterns for traders.  The shooting star candle chart depicts the weakness in the price action; while hammer candles depict strength in price actions.

            The relationship between the candle pattern and volume price analysis can be assessed based upon revelations of the price action. A complete market sentiment reversal is required and at the close of the bar, the sentiment must be bullish. The seven primary components of the bullish candle trading pattern relative to price action are the open, close, high, low, upper wicks and the lower wicks. The price action that occurs within the candle irrespective of time frame is an approach to price action displays as sine waves and market oscillation. The candle bars reflect price action according to periods of time (Elder, 2015). Figure 3 shows the components of a candle with sine wave:

Figure 3. Bullish Candle Trading Pattern Sine Wave

The wide spread is an indicator of market sentiment, or market strength; as the distance between the open and close is an indicator of a strong market in the bullish or the bearish market, relative to the closing price. Conversely, a narrow spread at the closing price would indicate that the market is weak. The change in price is indicated by the wicks at the end of the candle. No wicks is an indicator of a deficiency in price action; in which case the candle would be solid. Further, the volume at price (VAP) is a representation of the buying and selling action inside of the candle.

Accumulation and Distribution

            The accumulation phase is discussed based upon Charles Dow’s ideologies in regard to trends. Market trends are analyzed based upon Dow’s three stages of accumulation; technical trend following stage; and distribution. The process encompasses the trader taking precaution to ensure sufficient amounts of inventory are available. The accumulation phase is characterized as the first stage of the bullish trend. The accumulation phase is followed by the public participation phase, in which the trend is being followed. From public participation, the third stage emerges, the distribution phase, in which

            The distribution phase is characterized by insider price hikes to draw buyers back into the market. The phase begins as the at the market break out from the accumulation phase; with increasing price and average volume.(Ney’s, 1970) specialist theory presented that “in order to comprehend the specialist, investors must view the specialist as a merchant who desires to sell stock inventory at retail prices. When the inventory has been sold; the specialist will invest their profits in the purchase of more inventory at wholesale prices”. The insiders test the market and use information to raise the market higher. If the demand remains low, the market closes with low volume as near the open:

Figure 4. High Volume Test Using Candle Pattern

As the insiders move out from distribution price, the trading activity in fig. 4 shows a rising market and a flux of buyers who anticipate that the market will continue to rise.  Testing will reveal whether trends will continue and the level of volume.  The testing occurs continuously after accumulation or distribution phases.

Market Trends

            The trends and trend lines section of the book addresses how to determine the starting point of the trend and how the trends are ideal for volume price analysis applications. The theory supports Dow’s classification of trends as primary, secondary and primary. Coulling proposes that the short term market trend is typically not identified until it has passed. In trends that are long term, the volume price analysis provides insight as to where the trade is in the trend based upon indicators such as buying and selling climaxes, as well as significant fluctuations in the level of volume.

            The high and low pivot points are used to define the boundaries of the market trend. Three points on the chart constitute sufficient information to draw trend lines, as the market has provided enough steps to establish a pattern. The dynamic trend is created within the period of price action that may or may not escalate higher or lower. Determinations of the trend strength and duration may be assessed through applications of support and resistance andvolume price analysis. Within the bullish trend, the trend is prepared by congestion and the volume price analysisprovides confirmation.

Applications of Trading Strategies and Theory

            Towards the end of the guide, Coulling begins to integrate the principles and basic chart pattern tutorial into one in order to present the stock market trading experience in its totality. The rise and fall of the market is driven by market entries and exits by the buyers and sellers, which can be assessed and tested relative to breakouts, gaps, and volume with the candle pattern. The daily candle pattern charts provide a moment by moment account of the trading activity (Elder, 2015). Figure 5 presents the daily charts for Duke Energy, along with the appropriate readings of market behavior in the context of volume:

Figure 5. Daily Candle Chart for Duke Energy

The stock begins at a low volume level, which may be interpreted as an indicator of impending weakness in the market. The stock enters a price waterfall with increasing volumes and decreasing prices. Coulling noted that the spreads are wide on both sides of the candles and selling is being absorbed. The chart also shows two small, low volume hammers and increases in stock toward a gap up. A congestion phase is followed by a gap up and a breakout; after which the stock price begins to drop. After days of complacency, the stock broke above resistance and increased in volume.


            The contemporary tone, simplistic writing style, and simple illustrations provide for tutorials that are a bit easier to comprehend; therefore, it is highly suitable for new traders that are just beginning to trade on the markets. Coulling’s writing style and tone are designed to assist first time traders in gaining an understanding of the stock market trading pattern theory and volume trading fundamentals. A Complete Guide to Volume Price Analysis is ideal for use with other trader books in regard to price action. The book also contains supporting historical information in regard to the evolution of trading along with words of wisdom extracted from pioneers of common market trading patterns.

            The focus of the tutorials is to emphasize the significance of volume price analysis in trading across all markets. The content also gives audience to the realities of specialists; insider trading; and market manipulation. Coulling contributed that the primary objective of the ‘insiders’ is to instigate emotional responses of fear and greed as a form of market manipulation and warns that premature buying by overconfident buyers and panic selling by fearful sellers create profits for market manipulators. (Latif et al, 1970) pointed to studies that supported the assumption that the trader overreactions and underreactions were outcomes of psychological profiles of the traders and overly valued security; and described Coulling’s “fear” as conservatism.  The book address issues of learning as well as individual issues that directly impact performance as a trader. Overall, the book explored a vast terrain of trading concepts, principles, patterns and strategies that are invaluable to the new trader as well as the seasoned.


Coulling, A. 2013. A Complete Guide to Volume Price Analysis. Retrieved from http://www.fx-arabia.com/vb/uploaded/3212_11399310873.pdf

Elder, A. 2015. Step by Step Trading. Stock Charts. Retrieved from https://stockcharts.com/step-by-step-trading.pdf

Latif, M. Arshad, S. Fatima, M. Farooq, S. Market Efficiency, Market Anomalies, Causes, Evidences, and Some Behavioral Aspects of Market Anomalies. Research Journal of Financing and Accounting, 2(9), 2011.

Ney, R. 1970. The Wall Street Jungle. Grove Press.