Volume Price Analysis: The Basics

VPA Setups for Trading

Volume is an important factor in trading, and Volume Price Analysis (VPA) combines volume and price to identify significant candles and gain insights into market trends. Here are three VPA setups that you can consider while trading:

1) High Volume Bounce

Look for candles where bulls create a significant bounce with high volume.

This indicates that bulls are attempting to take control of the price action.

Enter the trade on the candle following the high volume bounce.

Place a stop loss below the low of the bounce candle.

Mark the next resistance level as a potential target.

2) High Volume Rejection

Look for candles where bears create a high volume rejection.

This shows that bears are resisting the price from going higher and are attempting to take control.

Enter the trade as soon as the high volume candle closes.

Place a stop loss above the high of the rejection candle.

Mark the closest support level as a potential target.

3) Low Volume Breakout

Look for moves to new highs with low or declining volume.

Breakouts need high volume to be validated, so low or declining volume indicates a weaker breakout.

Enter the trade after the second or third green candle closes.

Place a stop loss at the new highs.

Mark the opening candle high and double bottom level as potential support areas.

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Volume Price Analysis: The Basics

Recommended Reading:

VPA Setups for Trading

1) High Volume Bounce

2) High Volume Rejection

3) Low Volume Breakout