When there is a big spike in volume, is there not a big movement in price? Expressed another way.... is there ever huge volume without big/significant price movement?
I could write 5 pages here regarding volume. But my typing being what it is, it would take me 3 days. So I'll be brief.
The current discussion in this thread seems to have switched to volume spikes. Yes, there usually is a big movement in price. But you must take into consideration the position within the trend where it occurs, as it can have opposite implications. Additionally, you can have large volume on no or little change in price. In stocks, that could be a cross trade, and can be ignored from a TA point of view as it does not effect supply and demand or alter the trend. In futures such could be a MM attempting to remain flat, and again having no effect on the trend.
If my premise is correct, then the volume spike which accompanies a turn in market direction is merely ancillary... saying the same thing as the price move. And as such, consideration of the volume is of no value.
If there is a change in or reversal of the trend that is accompanied by large volume, it most certainly
is of value, as it validates the indications of the price movement. Without such, the move would be questionable. That is not to say the the move may not work out, as increases in volume often occur on the 2nd move in the indicated direction.
A point other than spikes which you would find useful is that even though volume is low, it may be several times higher than immediately preceding volume which can provide valuable information regarding the current price movement. Additionally, the lower the volume the better is of great technical value in many cases. Volume can very often clarify the price movement to where mistakes can be avoided or opportunities are not missed.
I could go into detail about the above and also many other uses of volume. However, few are interested in such, so I won't. But as you are not now using volume, may I suggest that you spend a few months doing detailed research on the subject. I imagine you have studied such in the past. But maybe this time around you'll see it in a different light. In fact, I'll refund the money you paid to read the above if you do not find that adding volume to your analysis has not improved your performance significantly. And it will certainly not be detrimental to your K.I.S.S. strategy!
