VPA

Question 1

What does Dow Jones theory state about volume?

Answer 1

Volume confirms the trend that the market is moving.

If market moves on low volume then the market is moving for different reasons

If the market is moving on medium or high volume then the market is making a valid volume

Question 2

How does markets move during the up phase?

Answer 2

“Accumalation phase” - is the first stage in the uptrend

‘Public participation phase’ - Is the technical trend following stage

‘Distribution phase’ - is the third states is when the smart money takes profits and selling to the eager public

Question 3

What were Wyckoff three basic laws?

Answer 3

1. The law of supply and demand - When demand is greater than supply then prices rise. If supply is greater the demand then prices fall.
2. Law of cause and effect - For effect to occur then there should be a cause. The effect should be directionally proportional to cause. (i.e., small volume should equate to small price action).

• Action taken must be equal or opposite. The price action on the chart must reflect the volume at the bottom of the chaart.

Question 4

What does volume tell you about the insiders actions?

Answer 4

• Tells you about the insiders activity
• Volume reveals the truth behind the price action
• Volume validates price
• Gives truth behind the numbers weather manipulation be occurring
• Gives a picture of the supply and demand coupled with sentiment

Question 5

What does volume tell you in the futures market?

Answer 5

It reveals the buying interest that is rising and falling daily
- It tells you about pull backs and reversals on tick charts and time
- Volume tells you where major operators are moving in and out of the market
- It validates