PRICE VOLUME ANALYSIS SUMMARY

BASICS:
1. Volume analysis is equally important as price
analysis as both complement each other to
complete the true market picture.
2. Any diversion of volume and price is |alarming|
3. Normal activity: High volume bars = Big Candles
Low volume bars = Small
candles
4. Abnormal activity: High volume bars = Small
Candles
Low volume bars = Big
Candles
5. If in a trend a low volume bar generates a big
candle, it is a fakeout. Price would likely fallout.
6. If in a trend a high volume bar generates a small
candle, it is first sign of weakness. Further
priceaction will confirm if its a retracement or
reversal.

Market Phases:
1. Accumulation: Insiders launching marketing
campaign (often through bad news and data) to

make a controlled panic to persuade holders to sell

their holdings. Insiders start buying at wholesale
prices. In Forex market, this phase remains in
action for a few hours or a few days only.

2. Distribution: The insiders now launch another

marketing campaign (often good news and data)
and slowly and gradually the buying starts.

In this process, the previous supply/demand

zones are tested on low volumes. If price

passes through them, the trend continues, if

price is halted and rejected then the
Distribution phase is reversed to Accumulation
again.
Identification signs of a successful test of
supply/demand or support/resistance zones:

Identification signs of a failed test of

supply/demand or support/resistance zones:

Complete Market Cycle

Price Volume Principles:

Important Candle Patterns:

1. Shooting Star (Potential weakness of the trend)

2. The Hammer (Potential Strength of the trend)

3. The Long Leg Doji (indecision of the trend)

4.

The Wide Spread (Strong Market Sentiment)

5.

The Narrow Spread (Weak Market Sentiment)

6.

The Hanging Man (Weakness after bullish trend)

7.

Stopping Volume (Ending phase of bearish trend)

8.

Topping Volume (Ending phase of bullish trend)