A thread on volume:
- Volume analysis.
- Understanding the market based on volume.
- Entering positions based on volume.
Like and retweets will be appreciated.
1/10
- Volume analysis.
- Understanding the market based on volume.
- Entering positions based on volume.
Like and retweets will be appreciated.
1/10
Volume is the total number of contracts, buy or sell, traded during a given period of time. It helps analysts analyze the part of the phase the market is in.
2/10
2/10
Volume is to price what car is to gasoline. For a strong trending market, it is important for the volume to increase. It doesn't matter what the trend is, up or down, it is considered strong if volume supports the trend.
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3/10
Therefore, volume should expand in the direction of the trend for you to take trend friendly trades which ensure a higher probability of winners, in a trending market, volume should be heavier on trend based moves and lighter on counter trend/corrective moves.
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4/10
When volume on a trend starts to diminish, while price continues in the move of the trend and corrections occur often and the market seems to stall, that is when you should change your sentiment and start getting cautious.
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5/10
The above mentioned statement applies to both uptrends and downtrends, on both LTF and HTF, however HTF should be the preferred choice to analyze.
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6/10
When volume doesn't match PA, a divergence occurs. A "simple divergence" is price going up/down while volume decreasing/increasing and a "hidden divergence" is price moving sideways after a rally up/down and volume /increasing/decreasing while price doesn't move much.
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7/10
In such cases, a good indicator of a coming correction is fake outs occuring more often than not and volume being higher on counter trend moves (even in sideways PA) than on trend friendly moves.
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8/10
This is when good traders will sit out or look for a counter trend position to take. They'll often look for certain patterns like wedges, HnS, CnH, etc and analyze them with volume.
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9/10
Analysts and traders shouldn't ignore volume when analyzing the market. A PA + Volume analysis will be extremely more accurate than PA only analysis. And the first thing you want in the market is better accuracy and precision. Good luck.
10/10
10/10
Fuck, what gasoline is to car****
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