Remember, here we are looking at a period of around 18 months, so long

term trends
with big profits to be made if you are patient, and believe in the power of
VPA of
course!
As we can see from the chart the AUD/USD pair has been bullish, before
moving
into a cong cg ieight="estion phase on average volume. Then we see our first
anomaly. A narrow spread up candle with very high volume. The pair are
struggling
at this price point and the market is not responding. The next weekly candle
arrives
with ultra high volume, and if this pair were going to sell off sharply, then we
would
expect this to be a wide spread down candle – it isn't. It's a narrow spread.
The
buyers must be supporting the market at this level. The next candle arrives, a
hammer with a deep wick, and this confirms the previous candle. This is
buying, and
now we wait for any further signals, which arrive on the next candle, a low
volume
test on a smaller hammer candle. The high volume selling that we were
seeing in the
previous candle, which was absorbed by the buyers, has now dissipated and
the forex
market makers are ready to take this pair higher. And off it goes at a nice
steady
pace, marching higher on nice steady volume.
The move higher extends over several months, but the point to note here, is
the slow
steady fall in volume over this period. It's not dramatic, just a steady fall, and
then
as we enter the yellow box on the chart – what do we see? Two wide bars,
one after
the other, but look at the volume. It has fallen away to almost nothing. This is
a
HUGE warning signal that this pair is becoming exhausted, and either
running out of
steam, or there is some alternative explanation. What is clear, is that the
market
makers are moving prices higher with NO volume, and have withdrawn from
the
market.
Traders who have missed this long trend higher, are now jumping in on fear
and
greed. They fear missing out on a golden opportunity. After all, they have
watched
this market go up and up, and have finally caved in and bought, just when the
market
makers are leaving by the side door.
Then the selling climax begins. The market makers are selling in huge
volumes at
this level, before finally after several weeks the pair break lower, and
attempts to
rally giving us signs of further weakness, before breaking lower again.
Note the attempt to rally at the right hand edge of the chart. Here we see
narrow
spread up candles on very high volume, and falling, another very strong
signal of
further weakness to come, which duly arrives.
One point I do want to cover here in a little more detail is the whole issue of
rising