As we come towards the end of this book on volume and price, I wanted to

pass on
some thoughts, observations, advice and comments based on my sixteen
years of
experience, using volume as my predominant indicator. As I have said
before, I was
lucky to start my trading education and journey with volume. It saved me a
huge
amount of wasted time and has made me substantial sums over the years from
both
trading and investing. Many aspiring traders spend years trying systems and
methods which never work, and result in them losing fandconfidence, to say
nothing
of their financial losses. Most then simply give up.
Eventually some of these traders and investors stumble upon volume. Some
buy into
the methodology instantly, just as I did. Others do not, and if you are in this
latter
group, I hope that I have at least made the case for VPA in this book.
However, if
you decide VPA is not for you, then you have lost nothing, other than the few
dollars
this book has cost you. If you do decide that VPA is logical and makes
perfect sense,
then I am delighted, as a lifetime of trading and investing success awaits.
Provided
you follow the principles I have explained here.
Now, let me introduce some further analytical techniques that I use in my
own
trading, which when combined with the basics of VPA, will help to develop
your
trading skills, with volume as the foundation.
The first technique I would like to explain is price pattern recognition, which
we
covered when we considered the importance of price congestion. However, I
want to
revisit it here, and look at some actual market examples. At the same time I
would
also like to include other key patterns that play an important role in breakouts
and
reversals, all of which ties into Volume Price Analysis.
The reason for revisiting price pattern recognition is that in the previous
chapter I
was very conscious of keeping the focus on the volume price relationship,
and less
so on the broader price behaviour on the chart. My rationale throughout the
book has
been to explain VPA in stages, and this is another layer that we can now add
to our
knowledge of VPA.