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You've been taught the WRONG way to use volume in trading
Here's how to use volume to trade like banks/institutions:🧵
(with examples)
Here's how to use volume to trade like banks/institutions:🧵
(with examples)
We all know the classic volume tips that we were told in the penny stock era...
Wait for a run up, then look for a pullback on LOW volume to get an entry
This isn't how you should be looking at volume...
Wait for a run up, then look for a pullback on LOW volume to get an entry
This isn't how you should be looking at volume...
First, let's start with what do I mean by volume
Volume Profile?
# of shares?
No.
I look at the volume BARS
Volume Profile?
# of shares?
No.
I look at the volume BARS
The key is to look at relative volume compared to the previous candle bars
Low volume bars don't matter
The secret is in the high volume bars
Low volume bars don't matter
The secret is in the high volume bars
Why?
Because high volume bars indicate REVERSALS (in most cases)
Take a look at $SPY
Notice the volume on each bottom?
Because high volume bars indicate REVERSALS (in most cases)
Take a look at $SPY
Notice the volume on each bottom?
Not every bottom or top will have high relative volume
However it's another element that can be used in your strategy for confirmation
However it's another element that can be used in your strategy for confirmation
Here's an example of $TSLA
Aside from the open (which will always have high volume)...
The highest volume bar on the 5min timeframe for the last hour was an intraday high!
Aside from the open (which will always have high volume)...
The highest volume bar on the 5min timeframe for the last hour was an intraday high!
Here's another example on $FB
Notice the high volume?
Was the low of the week...
Notice the high volume?
Was the low of the week...
But like I said, high volume doesn't mean a reversal is coming 100% of the time
Here's how you confirm👇
Here's how you confirm👇
The key to confirmation is simply waiting.
Wait and see what the following next few candles do
Does price immediately reverse?
Does it consolidate?
Continue pushing?
Wait and see what the following next few candles do
Does price immediately reverse?
Does it consolidate?
Continue pushing?
Look at the next few candles to confirm if a reversal is coming
Here's one key thing I noticed about volume as well👇
Here's one key thing I noticed about volume as well👇
If you see a huge volume candle and price keeps squeezing right through with no signs of a reversal...
It usually means price will continue squeezing
Why?
Shorts immediately got ran over and now have to cover, pushing price even higher
It usually means price will continue squeezing
Why?
Shorts immediately got ran over and now have to cover, pushing price even higher
It's important however that you only use volume in terms with your strategy
Don't use volume as a sole indicator to get in or out of a trade
Have a strategy and test to see if adding volume will help it or hurt it.
Don't use volume as a sole indicator to get in or out of a trade
Have a strategy and test to see if adding volume will help it or hurt it.
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Consider leaving a like + RT on the tweet below 👇🏻
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There's only ONE reason you're not a profitable trader...
And in this video I break it down for you 👇
freedomteamtrade.com/trade?sl=twitt…
And in this video I break it down for you 👇
freedomteamtrade.com/trade?sl=twitt…
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