In this video podcast I want to introduce the core principles of volume as we move on to begin the process of combining price with volume into the study we call volume price analysis.

So far in our studies of volume and price we have only considered the relationship between the two based on the X axis of the chart.

It is perhaps one of the great ironies of trading, that we often have to consider things from the inside out or from the upside down, and none more so when considering the whole approach to the business of making money.

And so to the trend aspect of markets, which as I explained earlier, is the one most new traders will focus on, and there is nothing wrong with this, but perhaps if we stay with the congestion phase for a moment longer, this is the phase of price action where trends are created and born.

Now in terms of yield there are three types, and these are: Nominal yield, current yield, and 
yield to maturity. And it is the second and third of these which are most useful to us as forex traders.

There is also a second major report on employment in the US, and this is the ADP.

However, this release has many detractors, and reasons include that the response rate is thought to be poor, with on average around only half of the survey responding within the required time.

China is forecast to overtake the US as the world’s largest economy, so as forex traders, we really do have to understand China, not least because the Chinese economy will slowly and surely begin to dictate world economic cycles, in much the same way as the US economy has done for much of the last century.

Just like bonds, commodities are generally ignored by the majority of forex traders, but for very different reasons. Bonds are ignored because they are considered to be complicated and confusing and of little value, an image I hope to shatter in this book.

Having looked at oil in detail I now want to consider another of the key commodities, and that’s copper, and its relationship, both to the broad markets, and more particularly to currencies.