My approach to trading is based on the objective evaluation of the “Energies” in the markets.These energies are often measured by technical analysis indicators.
In my first 2 trading courses I share the first 5 energies which are:
- Trend
- Momentum
- Cycles
- Fractals
- Support/Resistance (blockage to the first 4 energies).
One of the most common questions I’m asked is why I didn’t include volume in the first 5 energies.
The answer is quite simple.
The first 5 energies are ones that I use in consideration of every trade I make. Therefore they are the most important. Volume is not used in every trade – for example, you can’t use volume to trade the spot Forex market since it doesn’t trade through a centralized exchange.
Many teachers say that volume is more important than any indicator because volume, like price, is a reality unto itself. In other words, volume IS what it is. It isn’t an “indicator.”
Most indicators are based on price and/or volume (and sometimes also “time”).
That distinction is important, but doesn’t mean that their “raw data” is easier to read for trading purposes than excellent indicators that can pull “meaning” from that raw data.
In my method, price, volume or any single indicator is essentially meaningless.
Where we find “meaning” (a probability scenario worthy of risking our money) is when many or all of these “Energies” align saying the same thing at the same TIME. This, like in a court of law, gives us a preponderance of the evidence that puts the odds on our side. It doesn’t mean that we’ll be right every time, but we will be more times than not.
Volume is a SIXTH ENERGY that I add to my charts. I use both the standard volume histogram (that plots the raw data of volume) and also a volume indicator that makes it easy to interpret that data at a glance.
Exactly how I use volume in my trading will be revealed later this month when I launch my Swing Trading Course, which is the first Intermediate Level Course I’m making available in electronic format for home study (previously only taught in my live seminars).
Please leave your comments or questions by clicking on the green “Comments” link at the very bottom of this entry.
Hi Barry,
Does that include Market Profile, or intra-day bid/offer analysis?
Thank you,
John
Hi John,
I don’t do anything with bid/ask analysis. Market Profile is cool and I studied it for a while. All I do with it now is mark the value areas high and low on the chart.
Thank you Dr. Barry. Your info always has a steadying influence on me and particularly in this case since I trade forex exclusively. I can scarcely believe the level of profitability your instruction and insights have led me to. All the best to you and your family.
Doc;
i found tremedous use in the information in the 5 day mini seminar; and i believe that if “you” want something, all the information you can get is never enough. Any way, i have a question, i like to play with options, but just recently, futures became my new fascination. my question is, do you have any particular website you go to research futures? and are the charts alone enough for futures trading? Thank you very much, and i can’t wait to get your courses.
Hi Andrew,
Thanks for asking. I don’t do much research. I trade the charts. But look at the last couple of videos on this blog for some sites I do look at before trading each day.
Hi Barry,
You’ve read my mind! I asked you this exact question and also requested you offer a course on volume. The only thing was, I just thought it, but didn’t get a chance to actually email you on it. I now see in addition to one of the best teachers on trading, you also read minds. I couldn’t be happier that you will be sharing this information! You are awesome.
Regards,
Joe Dolce
If the infomation is half as useful as that I’ve already picked up from your first two courses it will be worth every penny. Please put me down for a copy as soon as it’s ready. Al.
Dr. Burns,
I am also looking forward to your new Swing trading course. I think so many so called home study course want you to by the course, then leave you out to dry. You invariably ae disappointed because the course doesn’t teaches you enough to cover all aspect of doing a trade. You don’t have a grasp of all that is required to make a trade and mange it. Your material is thorough and reasonable one would want to contiue. In other words, it sell itself. Thank again.
Hi Dr. Burns,
Thank you,although I am new in this buisness ,your approach is very convincing,I will certainly follow
your course which I am looking forward to.
Best regards
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