You will go through several iterations of what you are chatting about.
Right now, you have not considered the chart you want to look at as yet. When you do here are some of the next things that come up for any bar duration chart.
You will find that above a certain rate of volume the market moves. This is the mid range volume and it supports trends.
You will also see that the market goes laterally in another lower range of volumes.
The lowest range is what you will will want to detect because it is the volume that just precedes the best break outs for trends.
The last volume range is the one to use to make money the fastest. It is the highest volume range.
For every market there are a set of these values. Naturally the great value in knowing them is that you can tell when the they change from one subset to another, you have a market change telegraphed to you. you are exploring that now and have not yet discovered there are several different kind of volume signals.
Interestingly enough, when you monitor these, you see, usually, several minutes in advance, what is coming up. here in ET people are usually stuck on prediction. This is anticipation at it's best. Some people in ET do not know the difference and others do not thinthere is a difference. You have an advantage ovr all thse types who are stuck where they are stuck. It is a mellow place to be to have this advantage over so many others.
I always couple the volume stuff with the BBid and Basked as well. I do their ratio so I know which way the market is going. The minority rules as has been discussed elswhere. Also, I can easily estimate when the Bbid and Bask are going to change their respective values.
With these items working nicely, then I can spend my time monitoring the price to hone making money. This is the main event. There I use three simple sets of "monitoring search" alarms (Boolean constructs that are flawless in application). One set gives me a "perspective" of the market's climate. The important set gives me precise timing for changing which side of the market I am on. being on the right side of the market at all times assures a continuing stream of profits. And the last set simply, when necessary, trims the very short term perturbations that occur when some portion of the edge traders ae taking it in the shorts and are in reaction. Trimming means washing and reversing (one action) so that no drawdowns ever come up for me. I may do this trimmng up to 8 times a day.
I do the ES mini. If you want the sets of values for volume and the three sets of "monitoring search" instructions for price, let me know. They go with a log. I posted my unscaled results per contract in ES for Friday elsewhere (12.3/contract). They are very different when the scaling aspect is added in to the mix.
