How predictive is volume to index futures?

[ehorn]

Quote from Susannah:

...Just wondering what your experience is with using volume as an indicator.

Hi Susannah,

My experience is the following:

Volume is a leading indicator of price.

Volume provides context as to where price is within a cycle or trend (Dominant or Non-Dominant movement), where it is going, and when it has reached its destination.

Volume can be seen prior to price movement and projects price volatility as well as price continuation and change.

 

[fearless9]

Quote from ehorn:

Hi Susannah,

My experience is the following:

Volume is a leading indicator of price.

Volume provides context as to where price is within a cycle or trend (Dominant or Non-Dominant movement), where it is going, and when it has reached its destination.

Volume can be seen prior to price movement and projects price volatility as well as price continuation and change.

Hi ehorn,

Can you expand on "Volume is a leading indicator of price. "

regards
f9

 

[rickf]

Quote from fearless9:

Hi ehorn,

Can you expand on "Volume is a leading indicator of price. "

regards
f9

I think what he's meaning -- correct me if I'm wrong -- is that if you start seeing increasing volume on a given direction, chances are that direction will continue until volume starts to fall -- and when volume starts to peter off, that gives you a few seconds' notice of either a pending reversal or pause before the next move in the same direction.

At least that's how I'm using volume and with fairly decent results on my charts.

 

[fearless9]

Quote from rickf:

I think what he's meaning -- correct me if I'm wrong -- is that if you start seeing increasing volume on a given direction, chances are that direction will continue until volume starts to fall -- and when volume starts to peter off, that gives you a few seconds' notice of either a pending reversal or pause before the next move in the same direction.

At least that's how I'm using volume and with fairly decent results on my charts.

Are you trading ES.

regards
f9

 

[NoProblem]

Quote from rickf:

I think what he's meaning -- correct me if I'm wrong -- is that if you start seeing increasing volume on a given direction, chances are that direction will continue until volume starts to fall -- and when volume starts to peter off, that gives you a few seconds' notice of either a pending reversal or pause before the next move in the same direction.

At least that's how I'm using volume and with fairly decent results on my charts.

I agree.

Big volume also kills moves. Climax blow-offs often lead to sideways action prior to continuation or reversal.

Often a huge volume bar tends to signal current over sold/over bought - hence, a reversal.

 

[rickf]

Quote from fearless9:

Are you trading ES.

regards
f9

ES and ER2, yes.....but I daresay this applies to pretty much anything you trade -- but I'll leave it to those wiser than I to confirm that statement.

 

[fearless9]

Quote from rickf:

ES and ER2, yes.....but I daresay this applies to pretty much anything you trade -- but I'll leave it to those wiser than I to confirm that statement.

Great news that you are getting filled after you witness a volume move.

regards
f9

 

[Spydertrader]

Quote from rickf:

but I daresay this applies to pretty much anything you trade

Any market, any time frame - provided sufficient liquidity exists.

- Spydertrader

 

[MandelbrotSet]

Quote from ehorn:

My experience is the following:

Volume is a leading indicator of price.

Volume provides context as to where price is within a cycle or trend (Dominant or Non-Dominant movement), where it is going, and when it has reached its destination.

Volume can be seen prior to price movement and projects price volatility as well as price continuation and change.

Learning how to read volume adds immesureably to a traders' success in the markets.

• When markets are range-bound, volume tells you so.
• When markets are breaking up or breaking down volume confirms this.
• When markets are extremely bullish or extremely bearish volume always keeps you on the right side of the markets.

Thanks for your post ehorn, good luck in your studies, susannah.

 

[Pa(b)st Prime]

Quote from Batterup:

Here is a classic reason that using volume is a waste of time and just is a distraction. how many times have you heard this at the start of a pre-holiday session or pre-report days etc.

Should be a low volume day today because many are out for the holiday so we might get no moves or the moves might be quite large. KEY WORDS = MOVES not the amount of volume.

BIG players need BIG liquid volume to get in and out, small fish like me and you do not need volume,,,,,,,,,we just need to be filled.

Price is what CAUSES volume to come in and join the fun.

You couldn't be more correct. How can someone as smart as you Hog be such a flaming lib?