Charts courtesy of Ninjatrader.
Learn more about the volume price analysis methodology in Anna’s book, which is available here: Find it on Amazon here
Stock Analysis Using the Volume Point of Control & Accumulation & Distribution Indicators
Stock analysis becomes clearer with volume price analysis (VPA) tools. The Volume Point of Control (VPOC) and Accumulation & Distribution indicators reveal hidden intent. They show where professionals buy or sell. This helps spot trends, reversals, and key levels in stocks.
In this video, David & I cover using the Quantumtrading support & resistance indicators for stocks such as Fate Therapeutics, Apple & Tesla. The indicators in question are the volume point of control, which marks out key levels in terms of volume, and the price-based accumulation and distribution indicator. This indicator is unique in that once the indicator marks a level it will thicken each time that level is tested and holds.
What this does for the trader and investor is give a clear visual picture of the relative strength of any significant level. And when the accumulation & distribution combine with the volume point of control, we know the level is of supreme importance, as we can see on the monthly chart for FATE.
Volume Point of Control (VPOC) in Stock Trading
The VPOC marks the price with the highest traded volume in a session. It acts as “fair value”. Price often returns here. In stocks, VPOC shows institutional activity. High volume at VPOC signals strong support or resistance. Quantum VPOC indicator on NinjaTrader or TradingView highlights these levels visually.
Accumulation & Distribution Indicator Insights
The Accumulation & Distribution indicator tracks buying or selling pressure. Rising line with price = accumulation (buyers in control). Falling line = distribution (sellers dominating). Divergence warns of reversals—price highs on falling indicator show weakness.
Practical Stock Analysis Examples
- Trend Confirmation: AAPL rallies. Price above VPOC with rising Accumulation/Distribution—strong uptrend. High volume supports moves.
- Reversal Signal: TSLA new high. But Accumulation/Distribution falls—divergence. Price rejects VPOC on low volume. Short opportunity.
- Support Hold: NVDA pullback to VPOC. High volume bounce—accumulation. Long entry with tight stop.
Combining for Better Decisions
Use both together. VPOC for levels. Accumulation/Distribution for pressure. Volume price analysis (VPA) confirms—high volume at VPOC with positive indicator = bullish bias. Anna Coulling’s VPA methodology with Quantum tools turns stock analysis into disciplined trades.
These indicators reveal professional intent in stocks. Quantum on NinjaTrader makes them reliable. Apply VPOC and Accumulation/Distribution for clearer, confident analysis.
Trading Stocks in the Russell 2000 and Russell 3000
These indices are benchmarks for US stocks. The Russell 2000 tracks small-cap companies. The Russell 3000 covers the broad market—about 98% of investable US equities. Traders access them through individual stocks, ETFs, or futures. Volume price analysis (VPA) helps spot opportunities in these diverse groups.
Russell 2000: Small-Cap Volatility
The Russell 2000 focuses on smaller companies (market caps ~$300M-$2B). These are growth-oriented but sensitive to economic cycles. Volatility is higher than large-caps. This creates bigger swings—ideal for day or swing traders.
Advantages:
- High momentum in bull markets.
- Undiscovered gems with explosive potential.
- Micro E-mini futures (/M2K) offer leveraged access.
VPA shines here—high volume surges show conviction in small-cap rallies.
Russell 3000: Broad Market Exposure
The Russell 3000 combines large, mid, and small-caps. It’s a near-total US market view. Less volatile than Russell 2000 alone. But still captures growth phases.
Advantages:
- Diversification across sizes.
- ETFs like IWV track it easily.
- Balanced risk/reward.
Trading Approaches with VPA
Trade individual stocks for precision. Use ETFs (IWM for Russell 2000) for broader exposure. Futures (/M2K micros) for leverage. VPA confirms—high volume on moves validates strength. Low volume extremes signal reversals.
Quantum indicators on NinjaTrader enhance this. Trend Monitor aligns direction. Accumulation/Distribution spots phases in index components.
Why These Indices Matter
Russell 2000 often leads market turns—small-caps sensitive to rates/economy. Russell 3000 mirrors overall sentiment. VPA with Quantum tools turns index trading into disciplined opportunities.
Explore Russell 2000 for volatility. Use 3000 for balance. Quantum delivers the VPA edge.
Historical Volatility (HV) vs Implied Volatility (IV): What They Are and How They Relate
Volatility is central to trading—especially options. Two key types dominate discussions: Historical Volatility (HV) and Implied Volatility (IV). Understanding them helps time strategies. They relate closely but measure different things.
What Is Historical Volatility (HV)?
Historical Volatility measures past price swings. It’s calculated from actual data—standard deviation of returns over a period (e.g., 30 days). High HV means big past moves. Low HV shows calm.
HV is backward-looking. It tells what happened. Traders use it for context—compare current action to history.
What Is Implied Volatility (IV)?
Implied Volatility is forward-looking. It’s derived from current option prices. IV reflects market expectations for future swings. High IV = expensive options (traders pay premium for protection/movement). Low IV = cheap options.
IV incorporates news, events, and sentiment. It often rises before earnings or data.
How HV and IV Relate
IV usually exceeds HV—this “vol risk premium” compensates option sellers for uncertainty. Key relationships:
- IV >> HV: Options overpriced—favor selling (e.g., iron condors in ranges).
- IV << HV: Options cheap—favor buying (breakout potential).
- IV Crush: Post-event (earnings, news)—IV drops sharply. Hurts option buyers.
Volume price analysis (VPA) complements this. High volume with rising IV = conviction volatility. Quantum volatility indicator on NinjaTrader tracks these shifts.
Trading Insights
Use HV for baseline. IV for sentiment. Divergence signals opportunities. Anna Coulling’s VPA approach with Quantum tools turns volatility into disciplined trades.
HV looks back. IV looks forward. Their relationship reveals market pricing. Master both for better option and directional timing.
By Anna Coulling