The Secret Science of Price and Volume: Techniques for Spotting Market Trends, Hot Sectors, and the Best Stocks
Executive Summary
Timothy Ord's The Secret Science of Price and Volume presents a comprehensive top-down trading methodology that combines proprietary volume analysis techniques with market timing and trend-following strategies. Published in 2008, the book draws on Ord's 25+ years of experience as a technical analyst, market timer, and newsletter publisher (The Ord Oracle). His approach centers on aligning individual stock trades with the broader market direction using breadth, volume, and momentum analysis, while introducing his proprietary "Ord-Volume" indicator for generating buy and sell signals based on volume strength within price swings. The book is deeply influenced by the Wyckoff method and emphasizes that knowing the market's overall direction is the single most important factor in trading success.
Core Thesis
Successful trading depends first and foremost on correctly identifying the direction of the general market, and only then selecting the strongest sectors and individual stocks that align with that direction. Most traders fail because they focus on individual stock selection without understanding the broader market context. Ord's central innovation is the "Ord-Volume" indicator, which measures the volume strength within price swings to determine whether buying or selling pressure is dominant, providing objective buy and sell signals that work across multiple time frames.
Chapter-by-Chapter Summary
Chapter 1: My Path to Successful Trading
Ord recounts his journey from mathematics teacher to successful market timer, including his early career as a stockbroker, his disillusionment with fundamental analysis after seeing research reports that were consistently wrong about stock direction, his discovery of technical analysis through Joe Granville and Stan Weinstein, his development of tick-index trading methods published in Technical Analysis of Stocks & Commodities magazine, and his eventual realization that alignment with the broader market trend is the most critical success factor.
Chapter 2: Overview of My Method
Introduces the top-down framework: first determine the market's direction, then identify the strongest sectors, and finally select the best individual stocks within those sectors. Discusses the importance of time frames and trading alignment with the market's dominant trend.
Chapter 3: Physics of Price and Volume Analysis
Presents the Ord-Volume indicator in detail, explaining the mathematical underpinnings of measuring volume strength within price swings. Covers how to determine buy and sell signals using Ord-Volume, describes the bullish setup conditions, and provides the analytical framework for interpreting the indicator's readings across different market conditions.
Chapter 4: Price and Volume Relationships
Examines classical price-volume relationships at swing points, covering volume analysis at market swings and how to trade gaps using volume comparisons. This chapter builds on Wyckoff's foundational work while adding Ord's own observations about how volume behavior at key turning points can predict subsequent price direction.
Chapter 5: Combining Ord-Volume with Swing Price and Volume Relationships
Integrates the Ord-Volume indicator with classical swing analysis and volume relationships, explaining how to use multiple time frames for confirmation. Covers understanding volume pushing price across time frames and how to synthesize swing price, volume, and Ord-Volume signals for high-probability trade identification.
Chapter 6: The "Wind at Your Back" Method
Presents Ord's primary market-timing methodology for determining overall market direction. Combines breadth analysis, volume analysis, and momentum analysis to create a composite view of whether the market's "wind" is at your back (favorable) or in your face (unfavorable). This method is presented as the most critical component of the entire trading approach.
Chapter 7: Sector Analysis and Stock Analysis -- The Importance of Sentiment
Extends the analysis to sector selection and individual stock picking, incorporating investor sentiment as a contrarian indicator for identifying market turns. Discusses how to use the consensus of multiple indicators to confirm trading decisions.
Chapter 8: Gold Stocks -- The Big Picture
Provides a specialized analysis of gold stocks using the Price Relative to Gold Ratio, Elliott Wave analysis in the gold market, volume analysis techniques specific to precious metals, and breakout analysis. Demonstrates the author's methodology applied to a specific market sector.
Chapter 9: Putting It All Together
Synthesizes the entire methodology into a step-by-step process: reading market sentiment, evaluating breadth/volume/momentum, picking the strongest sectors, and selecting the strongest stocks within those sectors. Provides a complete workflow for implementing the approach.
Key Concepts
- Ord-Volume: A proprietary indicator that measures the cumulative volume strength within price swings to generate objective buy and sell signals.
- "Wind at Your Back" Method: A market-timing approach combining breadth, volume, and momentum to determine whether overall market conditions favor long or short trades.
- Top-Down Approach: Trading methodology that starts with market direction, narrows to sector selection, and finally identifies individual stocks, ensuring alignment at every level.
- Price and Volume at Swings: Analysis of volume behavior at price turning points to determine the likely direction of the next move.
- Alignment: The principle that individual trades should only be taken in the direction of the broader market trend.
Practical Applications
- Complete top-down market analysis framework from market direction to individual stock selection
- Proprietary Ord-Volume indicator for generating objective buy and sell signals
- Market timing methodology using breadth, volume, and momentum analysis
- Techniques for identifying the strongest sectors within a favorable market environment
- Volume analysis at swing points for entry and exit timing
- Specialized framework for analyzing gold stocks and precious metals markets
Critical Assessment
Ord delivers a practical, no-nonsense trading methodology grounded in decades of real market experience. His emphasis on market alignment as the primary success factor is a genuinely important insight that many trading books overlook. The Ord-Volume indicator represents an original contribution to the volume analysis literature. The book's main strengths are its clear, systematic approach and the integration of multiple analytical layers into a coherent framework. Weaknesses include the relatively brief treatment of risk management and position sizing, and the reliance on a proprietary indicator that readers cannot fully replicate without the author's software.
Key Quotes
- "I should have thought of that!" -- the reaction Ord aims for with his common-sense techniques
- "Fundamentally stocks appear the worst at their bottoms and best at their tops."
- "If a trader can master patience, then he or she will be more likely to have great success in the markets."
- "There are probably thousands of trading methods out there, and most will work just fine if they are aligned with the market."
Conclusion
The Secret Science of Price and Volume provides a well-structured, experience-tested trading methodology that correctly prioritizes market direction as the foundation of successful trading. Ord's integration of Wyckoff-influenced volume analysis with his own Ord-Volume indicator and a systematic top-down approach offers traders a comprehensive framework. The book is best suited for intermediate traders looking to incorporate volume analysis and market timing into a disciplined, systematic trading process.
