Volume & Market Profile
A Complete Guide To Volume Price Analysis
Coulling takes Wyckoff's effort versus result law and reduces it to one repeatable question you ask of every bar: does the volume underneath match the size of the candle above? When the two disagree, somebody large is doing the opposite of what the price suggests. Everything else in the book serves that one test.
The one idea
Big money cannot buy or sell in size quietly. Coulling borrows Richard Ney's warehouse picture: the professionals are wholesalers who fill a warehouse cheap (accumulation), mark the price up, empty it dear (distribution), then crash the price and do it again. They can hide their intentions, they can feed the media whatever story suits them, but every share and every contract they move has to cross the tape. So volume is the one footprint they leave. Price alone tells you where the market went. Volume tells you how hard it had to work to get there.
The test comes from Wyckoff's third law, effort versus result. Effort is the volume bar. Result is the size of the candle. A large move should cost a lot of volume. A small move should cost a little. When the two line up, Coulling calls it validation: the move is genuine, the professionals are in it, hold your position. When they do not line up, she calls it an anomaly, and there are only two kinds. A big move on small volume means nobody real is participating and the price is simply being marked (a trap). A small move on big volume means someone large is taking the other side and absorbing everything thrown at them, which is where trends die.
That is the whole book, and it is enough to change how a candle looks. A shooting star on below average volume is a shrug. The identical candle on ultra high volume, arriving after a long rally, is the warehouse being emptied. The candle shape gives you the story. The volume bar gives you the volume knob on that story. Coulling adds one more dimension, time: the longer the market spends coiled in a congestion range building the cause, the further the eventual move (the effect) will run. Volume, price, time. Nothing else.
What it actually teaches
Coulling reads a chart in one direction, from a single candle outward to the whole picture, and only then looks for a trade.
GRADE THE VOLUME BAR AGAINST ITS OWN HISTORY
There is no absolute number that counts as high volume. You decide low, average, high or ultra high purely by eye, comparing this bar to the last twenty or thirty bars on the same chart, same instrument, same feed. Coulling draws a dotted line across the volume pane at roughly the average and reads everything off that. Her rule for this is blunt: volume is relative, so as long as you never mix feeds, imperfect data compared with imperfect data still works.
TEST EFFORT AGAINST RESULT ON THE SINGLE BAR
This is the tradeable core. Wide spread candle closing near its high plus well above average volume equals validation, the move is real, stay long. Narrow spread candle plus below average volume equals validation too, small result from small effort, nothing to see. Wide spread candle plus below average volume is an anomaly: the price is being marked up with nobody joining in, which Coulling says you will see constantly in the first minutes after an equity open. Narrow spread candle plus high or ultra high volume is the other anomaly: heavy effort producing almost no price movement, meaning the sellers are absorbing every buyer, and it is the classic tell at the top of a bull run. Every one of these flips for down candles, because Coulling insists a falling market needs rising volume just as much as a rising one does.
RUN THE SAME TEST ACROSS THE GROUP OF BARS
There are two levels of validation, the candle and the trend. Rising prices should come with rising volume. Falling prices should also come with rising volume. Prices rising while volume falls away is an anomaly on the trend itself, and Coulling treats it as buying pressure draining out. She does add flexibility here: you cannot demand ten consecutive higher volume bars in a ten bar move, so you judge waves against waves, not bar against bar.
FLAG THE THREE PREMIER CANDLES
Only three candles get promoted. The shooting star (long upper wick, small body) means weakness. The hammer (long lower wick, small body) means strength. Coulling's specific claim is that these two can never be anomalies: the price action alone proves sellers or buyers overwhelmed the session, and volume only grades how serious it is, from a minor pause on low volume up to professionals unloading on ultra high volume. The third is the long legged doji (long wicks both sides, open and close together), and this one can be an anomaly. A long legged doji on low volume is not indecision or a reversal, it is a stop hunt: violent price movement with no real effort behind it. She says you will see exactly this on the first Friday of the month around Non Farm Payrolls.
LOOK FOR THE TEST
After the professionals have accumulated, they probe the level to check that the old selling is gone. On the chart that is a candle marked lower, then recovered to close near the open, with a narrow body and a deep lower wick, on low volume. Low volume means no sellers left and the market is safe to lift. If that same probe comes back on high volume, the test failed, supply is still there, and the market gets driven back into the range to shake it out before trying again. The mirror version applies at a top: after distribution, the market is marked higher on low volume to prove there is no demand left before the drop. Coulling says tests often come in twos and threes, each on lower volume than the last.
LOCATE THE BAR IN THE WAREHOUSE CYCLE
Zoom out and place what you just read inside the full cycle: accumulation, buying climax, test for supply, markup, distribution, selling climax, test for demand, markdown. Be careful with her naming, because she inverts the usual convention on purpose: a selling climax appears at the top of a bull trend (the insiders are the ones selling) and a buying climax appears at the bottom of a bear trend (the insiders are buying). Both show up as repeated candles with deep wicks and very high volume, closing back near the open, several sessions in a row. The same cycle runs on a one minute chart and a monthly chart, nested like Russian dolls.
TRADE THE BREAKOUT, TRIANGULATED
Define the congestion range with isolated pivots (three bar patterns where the middle candle posts the highest high or the lowest low), treating those lines as rubber bands, not steel. Wait for a clear close beyond the level with visible clear water, not a few ticks. The breakout bar and the bars after it must carry well above average and rising volume; a breakout on low volume is a fake out designed to trap you. Expect a pullback to retest the level, and it should come on low or falling volume. Put the stop on the far side of the congestion zone. Then read the same moment on three time frames at once (Coulling trades 5, 15 and 30 minute, taking the trade on the middle one), using the slow chart for the dominant bias and the fast one for detail.
What it looks like Monday morning
You put a volume pane under every chart you look at and stop reading candles in isolation. Before you take any breakout, you check the volume on the breakout bar against the range it just left. Below average, you skip it, on Coulling's logic that dragging a market out of a congestion zone full of trapped traders takes effort and if the effort is not there the move is manufactured. That single filter will remove a chunk of your worst entries by itself.
The second change is in position management, which is where the book earns its keep. When you are in a trade and the market pulls back against you, you no longer stare at the price. You look at whether the volume on the pullback is falling. If it is, that is a pause and you hold. If the pullback is arriving on rising volume, or if you saw a cluster of narrow spread bars on heavy volume before it, that is absorption and you are done. Same on entries: a shooting star that made you nervous means very little on low volume and means get out now on ultra high volume after a long run.
| Candle | Volume | Reading | What she says is happening |
|---|---|---|---|
| Wide spread up, closes near high | Well above average | Validation | Genuine move, professionals joining in, hold longs until an anomaly appears |
| Narrow spread up | Below average | Validation | Small result from small effort, nothing to act on |
| Wide spread up | Below average | Anomaly | Price marked up with nobody participating, a trap move, common in the first minutes after an equity open |
| Narrow spread up | High to ultra high | Anomaly | Effort with no result, sellers absorbing every buyer, classic weakness at the top of a bull trend |
| Wide spread down | Below average | Anomaly | Selling pressure draining away, the waterfall is running out of sellers |
| Narrow spread down | High to ultra high | Anomaly | Buyers absorbing the selling, market refusing to go lower, first sign of a floor |
| Long legged doji | Below average | Anomaly | Not indecision and not a reversal, a stop hunt with no real money behind it (typical on Non Farm Payroll Fridays) |
Every up candle reading flips for down candles, because Coulling insists a falling market needs rising volume exactly as much as a rising one does.
Volume is all relative, so it makes no difference as long as you are using the same feed all the time.Anna Coulling, A Complete Guide To Volume Price Analysis
Where it fails
- In spot forex, the volume bar is not volume. MT4 tick volume counts how many times your broker's quote changed inside the bar. It does not count currency, contracts or size. One quote refresh triggered by a 500 million dollar order and one triggered by a micro lot count exactly the same, and the total depends on how often that one broker's liquidity providers refresh prices. Coulling teaches forex heavily (GBP/USD, AUD/USD, EUR/CHF, all off MT4) and her entire method rests on separating professional size from retail noise, which is precisely the thing a tick count cannot see. Her answer, Principle 3, is that accuracy does not matter because you are comparing your imperfect data to your own imperfect data. That only holds if the distortion is proportional and stable, and it is not: quote frequency shifts across sessions, spikes when spreads widen, jumps around rollover, and changes outright when a broker changes its liquidity mix. She states that tick data is '90% representative' of real activity and cites no study anywhere in the book.
- The framework is built so that it can never be wrong. High volume on a narrow bar means the professionals are absorbing. Low volume on a wide bar means the professionals have withdrawn. Both readings land on the same conclusion, that somebody who knows more than you is on the other side, so there is no combination of candle and volume that can falsify the method. Coulling then shuts the last door: VPA is 'an art, not a science', software can never do it, and any signal that failed simply needed more patience because markets do not turn on a dime. That is not a small stylistic complaint. A rule you cannot state precisely enough to test is a rule whose hit rate you will never learn, and you will be free to attribute every loss to your own impatience.
- There is no trading system in here, only a reading skill. In roughly two hundred pages you get one glancing mention of position sizing (the 1% rule, named and dropped) and one stop rule (below the last pivot low). No entry trigger you could write on an index card, no target, no expected win rate, no worked example with a number attached to it. Every annotated chart in chapters ten and eleven is a chart where the signal worked, marked up after the fact with arrows. There is not one example of a shooting star on ultra high volume followed by continuation higher, which is a thing that happens constantly in strong trends.
- The mechanism is a 1970s NYSE specialist story. Coulling's insiders come almost entirely from Richard Ney's books, published 1970 to 1975, including a quoted 1975 phone call with an SEC official about specialists regulating themselves. The NYSE specialist was replaced by the Designated Market Maker in 2008, five years before this book was published. She also concedes, in a single paragraph, that large institutions use dark pools to hide block size and that 'there is little than can be done about it', then moves on. That paragraph quietly contradicts her central claim, which is that volume is the one thing that cannot be hidden. By 2013 a large and rising share of US equity size was printing off exchange and reported after the fact, and the retail order you see routed and the size you infer from the tape are not the same object.
- Grading a bar against the bars beside it ignores time of day. Volume in stocks and index futures is U shaped: heavy at the open, dead through midday, heavy into the close and the closing auction. Coulling's grading method is entirely 'is this bar taller or shorter than the recent ones', which means a 09:35 bar reads as high volume and a 12:30 bar reads as low, no matter who is actually trading. She describes exactly this pattern (market makers 'feeling out' the market on a one minute chart at the open) and treats it as a signal rather than as the structural artifact it mostly is. Nothing in the book normalizes volume for time of day, day of week, expiry, or holiday sessions, and an intraday trader applying her method literally will generate false anomalies at the same clock times every single day.
- The one question VPA cannot answer now has a direct answer. The method's core inference is a guess about who traded: 'there are no wicks on the candles, so it can only be buying volume.' Delta volume, which reads executions at the bid versus the ask and tells you the answer outright, is filed in chapter twelve under 'next generation' with Coulling admitting 'I have not used these myself, so cannot comment on their validity.' Since 2013, footprint and volume profile charts have gone from exotic to standard and largely free (TradingView, Sierra Chart, ATAS, Bookmap). They routinely show a wide up bar on heavy volume that was net selling, the exact opposite of what the wick shape inference concludes. Chapter twelve is the most dated part of the book, and it is the part pointing at what actually replaced the guesswork.
- It assumes six months of live screen time you may not have. Coulling says it took her about six months of watching charts every day to become fluent, and her working setup is three time frames monitored simultaneously in real time on a paid feed (NinjaTrader with Kinetick in the book). Almost everything she teaches is read as the candle forms: tests, stopping volume, trap opens, waiting for the next candle to confirm the last. If you have a job and look at charts after dinner, tests and trap moves are invisible to you, and the book never adapts the method for an end of day trader. It also assumes an instrument that reports real traded volume, which quietly excludes most retail CFD products and spot metals.
Who it is for
Buy it if
You already have a system that finds trades and you want a second filter for judging whether a move is real and when to get out of it. It lands hardest for intraday futures and US equity traders on exchange reported volume who are watching charts live. If you have tried to read Wyckoff directly and bounced off him, this is the plain English translation with better pictures.
Skip it if
Skip it if you trade spot forex through a retail broker and expect the volume pane to mean what Coulling says it means, because the book will not tell you honestly what you are looking at. Skip it if you are systematic or want rules you can test, since she states outright that VPA cannot be automated and treats that as a feature. Skip it if you are an end of day or swing trader with no live screen time, because most of the signals only exist while the candle is forming.
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