Big volume is exactly what he wants. Volume is a direct result of activity. No translation needed. And professional money wants the activity so that it can sell what it accumulated in the base. Without activity, i.e., volume, there's nobody to sell to and price drops back into the base. Not enough interest. Yet. Liquidity has to do with price movement, i.e., the less liquidity, the more dramatic price moves can be, even gapping (which you can see if you have a tick chart or are watching the prints in real time). In other words, price movement tells you whether or not there is demand. Volume tells you how much. As to ranging below a previous high, there can be all sorts of reasons for that, but I'd rather not go into it if there's no interest.
Wyckoff doesn't draw lines as such unless he's trying to call attention to a trend or trend channel. A line takes the place of the many, many words it would take to describe in text what it is that one is looking at. Unfortunately, many of those who look at these explanatory charts think that the lines are defining trend rather than the opposite and that there is some cosmic meaning in them. But they're just lines. And they're unnecessary to the trader who's doing the trading, certainly so in the case of swing highs and swing lows. Everybody sees those. Everybody (or at least everybody who's looking at that particular interval). Which is why they can ignite so much activity. Because the swing high, for example, is the point beyond which there were no buyers. This is important, because if buyers don't show up if and when that point is tested, why should price remain at that level? The logical thing for it to do is fall. And when it begins to fall, one can easily be blessed with a cascade. As for ranges, yes, there will be a variety of prices at the upper and lower limits, all within a close approximation of each other. Buying reversals off the bottoms of these ranges is tricky and requires a perception and skill that I don't have. Fortunately for me, I should have been in at the reversal of trend so that by the time price ranges, I'm just waiting for whatever resolution there might be. If I didn't get in at the reversal, I'll wait for the retracement after the breakout. If the breakout fails, I can't say I've wasted my time because I didn't lose any money, but it is disappointing. But that's trading.
Wyckoff doesn't draw lines as such unless he's trying to call attention to a trend or trend channel. A line takes the place of the many, many words it would take to describe in text what it is that one is looking at. Unfortunately, many of those who look at these explanatory charts think that the lines are defining trend rather than the opposite and that there is some cosmic meaning in them. But they're just lines. And they're unnecessary to the trader who's doing the trading, certainly so in the case of swing highs and swing lows. Everybody sees those. Everybody (or at least everybody who's looking at that particular interval). Which is why they can ignite so much activity. Because the swing high, for example, is the point beyond which there were no buyers. This is important, because if buyers don't show up if and when that point is tested, why should price remain at that level? The logical thing for it to do is fall. And when it begins to fall, one can easily be blessed with a cascade. As for ranges, yes, there will be a variety of prices at the upper and lower limits, all within a close approximation of each other. Buying reversals off the bottoms of these ranges is tricky and requires a perception and skill that I don't have. Fortunately for me, I should have been in at the reversal of trend so that by the time price ranges, I'm just waiting for whatever resolution there might be. If I didn't get in at the reversal, I'll wait for the retracement after the breakout. If the breakout fails, I can't say I've wasted my time because I didn't lose any money, but it is disappointing. But that's trading.
