It’s very popular approach to trade from levels of support and resistance. But how to identify Usually when people trade or invest, they observe price action and based on some patterns they make decisions about opening and closing positions. But how often we can distinguish correct support and resistance levels from the market noise. There is no secret that about 70-90% of all trades on the S&P futures and other liquid markets made by bots. And most of them using intraday strategy with short period of holding position. So we will have waves on the markets, because they usually often have similar algo rulles for trading. They open and fix positions using some particular conditions. Using soft which is able to show horizontal accumulation, we can see such places, which might be levels of support and resistance, opening and/or fixing positions and you can use them in making decisions and trading.
Let’s check 1 min chart on ES. I marked situation with bigger volume accumulation, because it was pit session opening we can suggest that it was opening positions. The first fixing was on the price 3214, and we see much bigger volume there in comparison with the average volumes in the clusters. 2971 vs 1000. Price reversed.
The same situation with 1 hour time frame. There were accumulated big volumes on the price 3218. A lot of short terms traders/bots opened there positions expecting growing/failing. But when price grew there were no new buyers, they not defended their positions. Because the volumes less in 3 time on the price 3222 vs 3218.
If you trade daily time frame, it might be absolutely the same situation. This is the way how it works, and how you can develop your skills and increase your trading results using volume analysis. You don’t need to draw any lines, just by identification of volumes accumulations you can find good levels of support and resistance on S&P or any other instruments.
Let’s check 1 min chart on ES. I marked situation with bigger volume accumulation, because it was pit session opening we can suggest that it was opening positions. The first fixing was on the price 3214, and we see much bigger volume there in comparison with the average volumes in the clusters. 2971 vs 1000. Price reversed.
The same situation with 1 hour time frame. There were accumulated big volumes on the price 3218. A lot of short terms traders/bots opened there positions expecting growing/failing. But when price grew there were no new buyers, they not defended their positions. Because the volumes less in 3 time on the price 3222 vs 3218.
If you trade daily time frame, it might be absolutely the same situation. This is the way how it works, and how you can develop your skills and increase your trading results using volume analysis. You don’t need to draw any lines, just by identification of volumes accumulations you can find good levels of support and resistance on S&P or any other instruments.
