THE BEGINNER'S GUIDE TO VOLUME & WHY IT'S THE BEST INDICATOR IN THE WORLD🔥🔥
This thread will teach you the basics of Volume & explain a few ways that Volume can help you make money
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Volume Definition
Volume is the number of shares traded over a period of time
For example, each daily candle contains the number of shares traded on that day
Wordy definition👇
When Bill sells 1 share of $TSLA to Sally that counts as 1 volume
Before we get too deep into the thread I want to remind you all about Volume Camp 2.0
If you enjoy the education in this thread, you'll love Volume Camp 2.0. It's a full week of volume classes for $20
It starts August 31👀
Each of these bars at the bottom of your screen represents the volume for one period of time
If I'm on a daily chart, one bar represents the volume from one day
If I'm on a 5 min chart, one bar represents the volume from one 5 min candle
Why Volume Is Important
Traders can determine the significance of price action based on volume. We can pair it with other indicators to determine strength, reversals, trend, etc
Volume is also real time, or very close, which is different than many other trading indicators
Many indicators lag, but volume can be seen as it's happening, which is huge for scalpers
The importance of knowing how many shares are being bought/sold is IMMENSE
Just think about it... we are getting to see the current strength dynamic between buyers & sellers (after we analyze price paired with volume)
How Traders Use Volume:
1) Volume Price Analysis
2) Volume Surges
2) Volume Trends
3) Confirmation
Volume Price Analysis (VPA) is the process of using both volume and price action to make inferences about the future price
(I have posted a ton of education about VPA)
Volume Price Analysis combines candle size & formation with volume
Large volume = significant candle
Large volume + large body = strong candle
Small volume + large body = weak candle
I am constantly using VPA to analyze price action & charts
Volume Surges occur when a candle has much higher volume than the previous candles
Volume surges indicate significant action. We can extract information about the trend/strength from the candles attached to these volume surges
Volume Trends are formed when the overall volume is declining or increasing
Volume Trends tell us information about the current price trend. We can also wait for a break of the Volume Trend
Confirmation is one of the best ways to use volume
If a move happens with high volume, that move is confirmed. If a strong move happens with low volume, that move is not confirmed
Volume can also be used to confirm losses when a setup fails
For example, If I enter on a low volume pullback & then we see a higher volume candle against me, that confirms the pullback is more likely to be a reversal
My Thoughts
Volume is the one indicator that EVERYONE should have
Join Volume Camp 2.0 if you're interested in more in depth Volume education
High Volume candles are the most important
Study lots of charts to see real examples of volume surges/VPA
THANK YOU FOR BEING THE BEST COMMUNITY ON X
Make sure you ❤️ the top post of this thread & share it with other traders
Much Love🤝
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