Volume is the only tool retail traders have to peek inside the market. While price alone doesn’t reveal the true strength of a move, volume helps assess whether a price increase or decrease is sustainable. By analyzing volume, traders can better understand market trends and spot when smart money is entering or leaving, providing a crucial edge in decision-making. Why Volume? The chapter opens with a quote from Warren Buffett: “The key is having more information than the other guy – then analyzing it right and using it rationally.” To illustrate how markets work, the author shares a fictional story: The Parable of Uncle Joe . Uncle Joe’s Story Uncle Joe runs a government-licensed company that is the only supplier of a product called widgets. Though the product has real value and doesn't degrade, business is boring—sales are slow, and profits are small. To boost sales, Uncle Joe spreads a subtle rumor through a gossiping neighbor: widgets might soon be in short supply. As expected...
In VPA (Volume Price Analysis), it says that by analyzing price and volume, you can accurately understand the market’s direction. If price goes up with an increase in volume, it’s a strong signal that buying pressure is high. On the other hand, if volume decreases while price rises, it could mean someone is trying to dump their positions at the top. The classic principles from Jesse Livermore and Wyckoff are still valid today, and the author, Anna Coulling , shows that markets are ultimately driven by human emotions. 🧠 1. There's Nothing New — Human Psychology Remains the Same “There is nothing new under the sun” — Ecclesiastes 1:9 The market seems to change, but the fundamentals stay the same . People’s emotions like greed, fear, hope, and regret have always created repeating patterns in the market. No matter how many new technologies, like AI or algorithms, come out, the driving force behind the market is human emotions . 📖 2. Reminiscences of a Stock Ope...