can anyone please explain how [B]volume [/B]can be useful [B]near[/B] support/resistance area ?
I find it confusing.
Can any one please explain.
comments please
See this helps. If he’s selling anything I’m not vouching for any of that, but I thought he did a good job on volume near or at S&R. Hope that helps
Gp
I did not get you. Can you please give me an example.
by the way ,
say, I see there is huge volumen near S&R zone …what this will mean ?
say, I see there is low volumen near S&R zone …what this will mean ?
I have gone through that link earlier also.
It says…
If the scrip is falling or rising in a trend and if S/R zone volume is big …then there might be reversal.
This does not work.
Hello Godzilla…
Out of curiosity, are you using some volume indicator, or ATR, in your trading, or is this just
to learn about volume analysis?
Sorry, just curious.
its been a really good study material on volumes, thanks for sharing.
trying to learn volume analysis and want to apply in my trading .
I have heard many people use volume for extra confirmation…me struggling to learn how it is useful.
by the way ,I do trade on weekly charts.
Thanks…I’ll give a feedback to this once I go through it
Anna Coulling is one of the best retail traders in London and does very well. Her use of volume or tape reading is unparalleled.
Volume is incredibly simple to use and in fact takes trading back to what it is meant to be rather than what it is with the tons of technical jargon flying everywhere.
It is this art that has meant that large institutions now hide their activity by slow accumulation or distribution of whatever asset. It is hard to know when they want to enter the market but you can sometimes tell if you are chart watching as price will move very quickly in their favored direction towards a support or resistance point on Low volume then… a massive volume spike sometimes a wide spread candle or a small spread (Doji). If this happens at a support level and the level holds, well it is anyones guess it is buying volume and depending on the volume you can estimate the strength of the move. The reverse will be true on a resistance point. However if the volume carries price through the level then it will likely keep rising. This mostly happens when a news event has triggered the move.
Note the market makers are the institutions and vice versa so they are all in league. So it is important to only follow them. That is what volume is all about. All the best traders in history have religiously traded on volume. Kovner, Soros and Livermore to name a few.
I do combine volume with capital flows in out of instruments to give me an overall picture for the longterm but volume on its own is simple and the only way to trade.
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Hello Godzilla…
thank you.
Do you use any volume indicators?
This article talks about one such indicator called the OBV:
MoneyShow.com: TRADING LESSONS - The Best Volume Indicator
Cheers
[QUOTE=“emeraldorc;626966”]Anna Coulling is one of the best retail traders in London and does very well. Her use of volume or tape reading is unparalleled.
Volume is incredibly simple to use and in fact takes trading back to what it is meant to be rather than what it is with the tons of technical jargon flying everywhere.
It is this art that has meant that large institutions now hide their activity by slow accumulation or distribution of whatever asset. It is hard to know when they want to enter the market but you can sometimes tell if you are chart watching as price will move very quickly in their favored direction towards a support or resistance point on Low volume then… a massive volume spike sometimes a wide spread candle or a small spread (Doji). If this happens at a support level and the level holds, well it is anyones guess it is buying volume and depending on the volume you can estimate the strength of the move. The reverse will be true on a resistance point. However if the volume carries price through the level then it will likely keep rising. This mostly happens when a news event has triggered the move.
Note the market makers are the institutions and vice versa so they are all in league. So it is important to only follow them. That is what volume is all about. All the best traders in history have religiously traded on volume. Kovner, Soros and Livermore to name a few.
I do combine volume with capital flows in out of instruments to give me an overall picture for the longterm but volume on its own is simple and the only way to trade.[/QUOTE]
Volume analysis definitely gives an advantage to retail traders. Big money moving around leaves foot prints, price action analysis and volume can reveal where the monster is headed.
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hmm… even with a surge in volume in the candle (see marked arrow in chart)…price fallen …that worries me…and so I don’t trust volume.
see this daily chart:
No. I dont use OBV. I dont like indicators.
However my charting platform has Volume data and so I would like to use the same data.
regarding the link you posted …I have gone through that …umm…I’m not haapy …I dont use indicators
if you have something on volume (not indicator), please post …I’ll have a look into that.
Thanks for the time.
After emeraldorc’s excellent post, I would also endorse Anna Coulling; watch this video:
Forex training - volume and price, with support a…: Forex training - volume and price, with support and resistance - YouTube
The key to understanding this like Lexi says is foot prints. A few stats you may find interesting are that 40% of the worlds retail FX traders live in Japan the rest are scattered across the globe it is this reason the JPY pairs have so much volume in and out and it is why the BoJ is always intervening in the currency. The point here is that retail traders have no power to move any pair. So any large volume spikes will be institutions in the market.
See the volume spikes on your chart… The spreads appear wide with very little tail (this chart may be stretched so I can’t really tell how many pips the spread is) so for arguments sake let’s say this is buying volume on that candle. There is break above the spike candle confirming this is buying (note this may be a 15 min chart), we do however have to check higher time frames because this may simply be a small up move in an overall down trend or the beginning of a larger accumulation phase.
Note how there is support in and around the spike candle (another clue), to see this clearly just draw to parallel lines to mark the high and low of the spike candle (price has stayed above the 50% level of the spike candle). The reason is simple, large players have taken a vested interest in that price area nor market maker or specialist or central bank would want this level to break. These guys only make money not loose. Secondly this is a small buy in a series of buys yet to come to build their full line (this is hiding activity) so as not to alert competitors or everyone will buy and the price will move against them too quickly and they can’t get a good deal anymore hence consolidation points occur (accumulation).
See the second volume spike now making a new high on lower lows. Again this may be buying or selling volume as the spread of the candle seems smaller than the last spike with more volume. Richard Wyckoff will call this a violation of the 6 laws (won’t get into them). Again any break above the spike candle would confirm additional buying volume (a good entry point) any break below will confirm selling volume and justify my claim of Wyckoff’s anomaly and will lead to a catastrophic fall in price confirming most of the volume was selling despite a green body.
Again you must see what is happening on other time frames attaching priority to higher time frames.
Make no mistake the market makers and institutions are aware of the likes of Anna Coulling and Wyckoff, they will try harder than ever to conceal their activity in a zero sum market like FX and they have the advantage of the market makers insight but despite their best efforts the amount of money these guys move it is almost impossible for them to hide in any time frame so buy working with the market makers price manipulation they can confuse you. e.g. a red candle does not mean a bearish session rather the session could have been dominated buy buyers and the market maker deliberately kept prices low to lock in sellers so buyers orders can be filled (no points for guessing who those buyers are) such behavior over several sessions could be misleading to any sellers and may keep some buyers out of the market meaning the institutions have the bull side all to themselves.
IMO not using volume is financial suicide. It is like taking knife to a gun fight.
Thank you, Emeraldorc… Your explanation is on a wholly different league to what I have experienced in my twenty-one-month stint as a part-time retail trader, and just this morning I have made a decision to look more closely into volume analysis… so I bought the following book while having breakfast:
I think that it will take me another bit of time (who knows how long) to get to thinking in volume terms, but I do want to at least start looking beyond what has been my bread and butter since the beginning, namely the lines on the chart… If anything, it will make me understand what volume does and how I can read it to confirm my trading analysis of a pair’s movement…
I will post back after I have read the book…
Thank you for the posts…
Godzilla, I hope that you have printed off emeraldorc’s posts… They are well worth it!
Very wise choice. It is a book that is by far one of the best out there the fact it is written by an ex-teacher turned finance guru is astonishing to say the least.