Have you ever wondered why some traders consistently profit while others struggle despite using the same indicators? The answer often lies not in what they're looking at, but in how they interpret what they see.

Anna Coulling's Volume Price Analysis (VPA) remains the single most transformative methodology I've encountered in my trading journey. Drawing from legendary market wizards like Jesse Livermore, Charles Dow, and Richard Wyckoff, this approach cuts through market noise to reveal the footprints of institutional traders – those who truly move markets.

After nearly a decade trading professionally, I can confidently say that Coulling's VPA book is the only trading text I recommend without hesitation to both novices and veterans. These principles form the backbone of my daily analysis across indices and active stocks. Let's explore five game-changing lessons from Coulling's approach that could radically transform your trading results:

Volume Isn't Just Another Indicator – It's THE Indicator

Most traders glance at volume bars as an afterthought. Coulling flips this approach on its head – in her methodology, volume becomes the foundation upon which all price analysis is built.

🔍 Reality Check: The market requires effort to both rise AND fall. Any significant price movement without corresponding volume should immediately trigger your suspicion.

What makes VPA uniquely powerful is its focus on the relationship between price and volume, not just their individual readings. When price and volume align (rising prices with rising volume), this validates the move as genuine. But when they diverge (a wide-range up candle with suspiciously low volume), you're likely witnessing manipulation or a potential trap.

I've personally witnessed countless scenarios where prices appeared to break out convincingly, only to reverse sharply when volume analysis revealed the move was hollow. As Coulling eloquently puts it:

"Volume is the fuel that drives the market. Without volume, nothing moves, and if it does move and the volume is not in agreement, then there is something wrong, and an alarm bell rings!"

The beauty of this approach? It's entirely contextual. Volume is always judged relative to recent history – as low, average, high, or ultra-high within the specific market and timeframe you're analyzing. This relativity makes VPA applicable across all trading vehicles and timeframes, from 5-minute scalping to weekly position trading. One tool I personally use to make this easier is a Relative Volume Trading Indicator.

*Valid volume versus anomaly volume - Key concept for verifying a move*

Three "Premier Candles" That Reveal Market Psychology

From the forest of candlestick patterns, Coulling identifies three formations with unparalleled predictive power when paired with proper volume analysis:

The Shooting Star: Market Exhaustion Signal

This candle, with its long upper wick and small body, signals potential weakness – especially after an extended uptrend. When accompanied by abnormally high volume, it suggests intense selling pressure absorbed by market makers.

I still remember a trade from 2022 when the S&P 500 formed a perfect shooting star at resistance with the highest volume in three weeks. The next day brought a 2% decline, creating an excellent short opportunity for those who recognized the signal.

As Coulling explains, a shooting star with high volume often indicates that "professional money is now selling out" – a powerful warning to prepare for a downward move.

The Hammer: Absorption of Selling Pressure

The inverse of the shooting star, a hammer shows buyers stepping in after an initial decline. Its long lower wick tells a story of rejection – sellers attempted to push prices lower but were overwhelmed by buying interest.

When a hammer appears with high volume at the bottom of a downtrend, it often signals what Coulling calls "stopping volume" – institutional buyers stepping in to halt the decline and begin accumulation.

The Long-Legged Doji: Market Indecision Revealed

With its minimal body and extended wicks in both directions, this candle signals indecision. But volume adds crucial context – a long-legged doji with high volume shows genuine market uncertainty, while one with suspiciously low volume often indicates manipulation, particularly around news events.

Unlike most technical approaches that treat candlestick patterns as standalone signals, Coulling emphasizes that context is everything. The same pattern carries different implications depending on its location within broader market structure – trend, congestion, or transition phases.

The Open Secret: Markets Are Manipulated By Design

"Every market that we either trade or invest in is manipulated in one way or another."

This statement isn't conspiracy theory but market reality. Institutional players (what Coulling calls "smart money") have always influenced markets to their advantage. Understanding these dynamics gives retail traders a fighting chance.

The market operates in two primary phases that Coulling meticulously documents:

*Volume verifies the buying before breakout*

Accumulation: Institutions build inventory at wholesale prices after market declines, often using negative news to shake out retail traders. I've observed this countless times in individual stocks – prices stabilize despite terrible headlines, confusing most investors while institutions quietly accumulate positions.
Distribution: Once positions are built, institutions sell their inventory at premium prices to eager retail buyers who fear missing out on the uptrend. This typically occurs amid positive news and market optimism.

💡 Quick Insight: One fascinating concept Coulling introduces is "testing" – how institutions verify whether selling pressure has been exhausted before committing to higher prices. A classic test occurs when price briefly moves lower on notably low volume after a period of accumulation. If volume remains muted during this probe, it confirms that selling has been absorbed, and a move higher is imminent.

The climax of these phases appears in what Coulling describes as "buying climaxes" and "selling climaxes" – dramatic volume surges at market extremes signaling the final phases of accumulation or distribution. These events create what she colorfully calls "firework displays" before major trend changes.

By recognizing these patterns, you can avoid becoming the proverbial "dumb money" and instead align yourself with institutional flows rather than fighting against them.

The Hardest Lesson: Patience and Confirmation

Here's the truth most trading educators won't tell you: even with perfect analysis, timing remains challenging. As Coulling writes, "The market is like a super tanker. It does not just stop and turn on a dime or sixpence."

Even after clear VPA signals appear, markets typically continue their previous direction briefly before reversing. This is why patience and confirmation are non-negotiable.

"For the longest time, I'd identify perfect setups, enter immediately, and get stopped out just before the market moved in my anticipated direction," shares Martin Chavez, a member of our trading community. "Since joining the Opinicus team, I've learned to wait for confirmation. That single change doubled my win rate."

Coulling recommends using multiple timeframes to validate signals, creating what she calls a "three-dimensional view" of the market. By examining slower timeframes for context and faster timeframes for precise entry, you gain a comprehensive understanding of market dynamics.

Patience extends to appreciating congestion phases – periods where markets move sideways. Rather than becoming frustrated with these consolidations, Coulling teaches that they are "the breeding grounds for trends" and should be closely monitored for breakout opportunities validated by volume.

Risk Management is Paramount

While VPA provides powerful analytical insights, Coulling emphasizes that proper risk management remains essential. She distinguishes between two types of risk: the financial risk on the trade (managed through position sizing) and the risk on the trade itself (which VPA helps quantify).

"Kyle has changed my view on trading and made me not only the best trader I can be but also the best version of myself," explains Reece Davis, one of our mentored traders. "Learning to manage risk properly while using volume analysis has transformed my results."

Coulling recommends using natural market barriers as stop placement points rather than arbitrary percentages. For example, after a breakout from congestion, the former resistance becomes support – a logical place for a protective stop.

Look, I get it – risk management isn't the sexy part of trading. But here's the brutal truth: without it, your account will eventually blow up, no matter how good your analysis. I've personally witnessed brilliant analysts fail as traders because they couldn't manage risk effectively.

Another key risk principle involves recognizing when you're trading with or against the dominant trend. Positions taken against higher timeframe trends carry greater risk and should typically be held for shorter durations. Conversely, trades aligned with the dominant trend offer lower risk and greater profit potential.

The Path Forward: Integrating VPA Into Your Trading

Anna Coulling's Volume Price Analysis offers a comprehensive framework that goes far beyond basic technical analysis. By learning to read the relationship between volume and price, you gain insight into institutional behavior and market sentiment that simply isn't visible through price action alone.

"Unlike other groups focused on signals or watchlists, here you will learn to trade the market. To find your own identity as a trader. You'll have the tools you need to enter the trading day with confidence and a game plan," explains Martin Chavez, who has doubled his portfolio since joining our community.

While mastering VPA requires practice and patience, the rewards are substantial – the ability to anticipate market moves before they occur, avoid manipulation traps, and trade with genuine confidence based on sound analysis rather than hope or fear.

If you're serious about elevating your trading, I invite you to explore how we incorporate these powerful VPA principles into our daily analysis in the Trader's Thinktank. For traders ready to accelerate their development, our Trading Mentorship program provides personalized guidance in applying these concepts to your specific trading approach.

Remember: volume never lies, but it must be correctly interpreted. Master this skill, and you'll gain an edge few retail traders ever develop.

Want to learn how we apply these VPA principles in our Two Hour Trader framework? Discover how we've optimized these concepts for maximum efficiency in The Two Hour Trader.

Volume Price Analysis - 5 Lessons From Anna Coulling