volume as an indicator ...
- Thread starter paulus
- Start date
Hi paulus, there a lots of ways to use volume as an indicator.
I use it to give me a bias, rather than to trigger a trade. My trading methods are all price-based. Anyway, to the point: attached is the last 8 trading days of the ES on a 10-min chart. Notice how about 5 days ago, price started creeping up while the on-balance volume (OBV) kept creeping down. In other words a divergence between price and obv developed.
Sorry it's so dim, obv is the faint green line on the bottom.
After this morning's rally I aggressively took every short my methods had to offer. The first one broke even, but I smacked the second one down like a bad dawg.
Sometimes you will see obv break a trend line before price does. In that way it is sometimes a leading indicator. But again, price is king, I never let volume trigger a trade.
It makes sense as an indicator to me because it is a separate piece of information, unlike price based indicators which seem to serve as guides to point out particular price patterns.
I use it to give me a bias, rather than to trigger a trade. My trading methods are all price-based. Anyway, to the point: attached is the last 8 trading days of the ES on a 10-min chart. Notice how about 5 days ago, price started creeping up while the on-balance volume (OBV) kept creeping down. In other words a divergence between price and obv developed.
Sorry it's so dim, obv is the faint green line on the bottom.
After this morning's rally I aggressively took every short my methods had to offer. The first one broke even, but I smacked the second one down like a bad dawg.
Sometimes you will see obv break a trend line before price does. In that way it is sometimes a leading indicator. But again, price is king, I never let volume trigger a trade.
It makes sense as an indicator to me because it is a separate piece of information, unlike price based indicators which seem to serve as guides to point out particular price patterns.
Lovelitera
Guest
Volume indicates level of urgency. On a healthy bull move volume fluctuations correlate to price fluctuations. In a bear move the correlation is opposite.
I consider a move where thee volume does not fluctuate markedly to be drifting up or drifting down and I would not want to be part of it. I would also take profits on positions if volume actiomn does notconfirm price action.
I consider a move where thee volume does not fluctuate markedly to be drifting up or drifting down and I would not want to be part of it. I would also take profits on positions if volume actiomn does notconfirm price action.
appears there is another OBV divergence on the 10 min NQ chart.
This time price made a low equal to the last, but the obv made a higher low. This to me means the selloff this afternoon was light-handed.
Thus i'll be especially aggressive with longs tommorow. e.g. pullbacks on the 1 min chart, 3 bar pivots, etc.
This time price made a low equal to the last, but the obv made a higher low. This to me means the selloff this afternoon was light-handed.
Thus i'll be especially aggressive with longs tommorow. e.g. pullbacks on the 1 min chart, 3 bar pivots, etc.