![]() ![]() When there’s no more buyer, the price has to come down, and vice versa. Why? Because the high volume bar signifies that there’s a huge amount of stocks changing hands during that period, meaning there’s no one left who hasn’t participated in the trend. However, when an abnormally high volume bar appears during a strong rally or selloff, it may signify an end to the current trend. ![]() Climatic Volume Barįor breakout and breakdown trades, you may need high volume bars signifying a change in trend. On the other hand, if the breakout bar shows no significant change in volume, you’d better sit on your hands. If the breakout bar is accompanied by a surge in volume, we know that there are a lot of traders who participate in this breakout trade and the price probably will continue. If you are a breakout trader, how do you know when to enter a trade and when to stay on the sideline? By looking at the volume. For example, for breakout trades, we all know from statistics that 80% of all breakouts fail. The more volume associated with price action, the surer the move. ![]() Trading volume is an integral part of it. To compensate for that, you need the ability to read chart patterns. When you trade from the comfort of your home, you lack the ability to see the market in live-action, compared to people trading on the floor. For those of us daytraders, intraday volume analysis is an important part of our job.
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