Trading Volume Indicator Used to Improve Odds For Day Trading and Swing Trading

Trading Volume Indicator

A trading volume indicator can dramatically improve your profitability, and the use of a volume indicator can make the analysis easier than reading the pure volume histogram at the bottom of the chart.

There are 3 things that are absolutes on a chart:

  1. Price
  2. Volume
  3. Time

Most of the other elements traders put on charts are calculations based on one or more of these absolute values and we call them “indicators.”

Trading volume, like price and time, is not an indicator.

However using a volume indicator can be helpful in trading in that it can help us “see” the meaning behind price and/or volume more easily.

In the video below, I present a couple basic principles of how to read pure price and volume, and then go on to show how using a volume indicator can enhance your insight into what trading volume is telling you about potential future movements in the market.

Enjoy!

WHAT DO YOU THINK OF THIS VIDEO?
PLEASE LEAVE YOUR COMMENTS AND RESPONSES BELOW!

To learn more about the Top Dog Trading techniques, including my
Top 7 Volume Patterns, go to:

http://www.topdogtrading.com/Products_SwingTrading.html

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This entry was posted on Wednesday, October 27th, 2010 at 9:26 pm and is filed under Day Trading, Daytrading, Emini Trading, Swing Trading, Volume. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

40 Responses to “Trading Volume Indicator Used to Improve Odds For Day Trading and Swing Trading”

  1. Ralph Says:

    October 28th, 2010 at 3:48 pm

    Your video on volume is good. However, your charcoal background and black print in you Blog make the Blog content almost impossible for an old man to read.

  2. Indiana Lar Says:

    October 28th, 2010 at 7:02 pm

    This is a very nice explanation on the volume issue as we day trade. Many times we see price movement with very little expansion of volume, supporting the move up or down. It’s a mystery. But very well explained in this short video.
    Many traders simply overvalue price movement, but there are valuable clues with volume, especially when you’re hesitant to pull the trigger. Believe it and you’ll see it.

  3. Craig Says:

    October 28th, 2010 at 9:11 pm

    I had given up on using volume until this post. As always your explanation is clear and concise. I now use OBV with a moving average signal line. What a great indicator. This is the missing link to an otherwise good strategy. Thank you very much.

  4. Annabelle C. Gacus Says:

    October 28th, 2010 at 10:05 pm

    Thanks. Nice Video. Hoping more videos you sending me in my e-mail. It helps a lot.

  5. Pietcheetah Says:

    October 28th, 2010 at 11:33 pm

    like everything else it is looking good and well explained but it is hindsight. Printing and background almost unreadable

  6. mary Says:

    October 29th, 2010 at 12:31 am

    good stuff, thanks

  7. Ed Says:

    October 29th, 2010 at 12:53 am

    Hi Barry, I enjoyed the video learning all the time from people like you. Just wish I could make a regular income trading. will keep trying though as I think I’m getting better at it.
    Cheers Ed.

  8. Earl Pfeiffer Says:

    October 29th, 2010 at 5:14 am

    Very good.

  9. Everett Says:

    October 29th, 2010 at 1:10 pm

    Nice video Barry !!! Very informative.

  10. Joe Says:

    October 29th, 2010 at 4:19 pm

    A good explanation but it raises the question. How can one look at the future based on volume although the accumulation is evident now but what about tomorrow? We cannot see tomorrow now! All technical trading is based on what has happened and it is very difficult to forecast based on the past. I agree trends are best followed but when a crash comes about it is usually not easy to see it coming in advance unless one looks at the news. BP is a good example. I always short disasterous news with much better results than from the graphs.

    Regards,

    Joe

  11. robert boiaky Says:

    October 29th, 2010 at 6:37 pm

    good lesson; however, i was not that familiar with the obv indicator. thx bb

  12. pligg.com Says:

    October 29th, 2010 at 9:50 pm

    volume indicators…

    A volume indicator can dramatically enhance your probability of profits in day trading and swing trading. A volume indicator can dramatically enhance your probability of profits in day trading and swing trading….

  13. bookmarkbuster.com Says:

    October 29th, 2010 at 9:52 pm

    volume indicators…

    An investing volume indicator can significantly improve your profitability in day trading and swing trading. An investing volume indicator can significantly improve your profitability in day trading and swing trading….

  14. pligg.com Says:

    October 29th, 2010 at 10:21 pm

    volume indicators…

    A volume indicator can dramatically enhance your probability of profits in day trading and swing trading….

  15. Jens Says:

    October 29th, 2010 at 11:37 pm

    As always your video and material is easy to understand, and also entertaining. Rising volume and rising prices in a start of a trend is significant. But to every buyer there is a seller, so if you say there is a lot of buyers, there is also a lot of sellers. What is your explaination for that?

  16. pligg.com Says:

    October 30th, 2010 at 1:09 am

    volume indicators…

    A trading volume indicator can significantly increase your success in day trading and swing trading. A trading volume indicator can significantly increase your success in day trading and swing trading. A trading volume indicator can significantly incre…

  17. biqboq.com Says:

    October 30th, 2010 at 1:27 am

    volume indicators…

    An investing volume indicator can significantly improve your profitability in day trading and swing trading.An investing volume indicator can significantly improve your profitability in day trading and swing trading….

  18. ukbusinesslistings.info Says:

    October 30th, 2010 at 1:56 am

    volume indicators…

    A trading volume indicator can significantly increase your success in day trading and swing trading. A trading volume indicator can significantly increase your success in day trading and swing trading. A trading volume indicator can significantly incre…

  19. pligg.com Says:

    October 30th, 2010 at 3:21 am

    volume indicators…

    A trading volume indicator can significantly increase your success in day trading and swing trading. A trading volume indicator can significantly increase your success in day trading and swing trading….

  20. oyyla.com Says:

    October 30th, 2010 at 4:11 am

    volume indicators…

    An investing volume indicator can significantly improve your profitability in day trading and swing trading….

  21. pligg.com Says:

    October 30th, 2010 at 4:28 am

    volume indicators…

    A trading volume indicator can significantly increase your success in day trading and swing trading.A trading volume indicator can significantly increase your success in day trading and swing trading. A trading volume indicator can significantly increa…

  22. James Smith Says:

    October 30th, 2010 at 8:07 pm

    Good video, never seen how to use the OBV before.
    Thanks.

  23. JULIE Says:

    November 1st, 2010 at 4:06 pm

    An excellent video and very simply explained. In the past I used OBV but could not understand why the charting software I was using would often show a negative OBV reading. I would really appreciate it if you could explain this to me.

    Warmest regards Julie

  24. TomHam Says:

    November 1st, 2010 at 4:34 pm

    Good job with introducing volume analysis to folks Barry. Many volume indicators (like OBV) can be evaluated like price, in that trend lines, support & resistance levels can be drawn.
    Many times (as barry pointed out) volume will lead price. I like to use volume as a confirming indcator to price; this improves my “batting average”.
    Another indicator to study is the Chalkin Money Flow (20 day). This indicates money flowing into & out of a stock over that period. great for tracking instutitional activity.
    Cheers & Good Trading. … Tom …

  25. Willy Says:

    November 2nd, 2010 at 7:42 am

    thanks Barry

    fine information and well explained, though I am looking for the Mathematical formula for drawing the Volumen indicator viewed below at the chart, and I’m interesting in knowing which of the “well known” indicators e.g. MACD as had integrated this Volumen indicator.
    kind regards
    Willy

  26. john Says:

    November 9th, 2010 at 8:00 pm

    Barry:

    You are the best trading teacher there is.

    Thanks

  27. Carax Says:

    February 4th, 2011 at 6:55 am

    Your presentation is clear and your graphics are easy to read. Just wish I was take your courses — it’s difficult paying in euros.

  28. Julie Missen Says:

    February 5th, 2011 at 1:37 am

    A good video on OBV. I have to agree with the comment Julie posted….see below. I have yet to find the answer to this question and would be interested in your reply.

    Julie M

    # JULIE Says:

    November 1st, 2010 at 4:06 pm

    An excellent video and very simply explained. In the past I used OBV but could not understand why the charting software I was using would often show a negative OBV reading. I would really appreciate it if you could explain this to me.

    Warmest regards Julie

  29. Barry Burns Says:

    February 10th, 2011 at 9:41 am

    It’s just a function of the formula. The absolute value of OBV is not usually considered significant, but rather the trend of it and it’s relation to the corresponding price action.

    However for the formula of OBV, and a chart showing exactly how a negative value is created, refer to this web page:
    http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:on_balance_volume

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  32. Matt Says:

    October 30th, 2011 at 2:47 pm

    Nice video Barry – I use volume quite a bit in my own trading. I like to look at the percentage of a stock’s average volume it’s doing at any particular moment of time to get a feel for when there may be some institutional activity going on.

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    I’m having a look ahead on your next post, I will try to get the hang of it!

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