Interpret the model volume (where possible) is much heavier than the pricing model. The difficulty arises because of the hidden strategies of major market players. These players tend to move slowly and hide their movement within the wider market noise of daily movements.
While the price bars have much to tell themselves, the volume has a small or absent meaning without a corresponding price movement. But do not refuse to study the volume at all. It still adds a certain reliability of the prediction of future movements, if applied properly.
The importance of the volume depends on its location within the overall model. For example, a large volume at break trend line to start a new trend, while the same situation after a long rally or decline predicts turnaround. This seemingly contrary to common sense logic confuses traders and prevent them decrypt the volume at key turning points of market movements.
Below is a five-volume models, which demonstrate a significant predictive power when interpreted properly. Look for these models, whenever you look at their schedules. Then you'll see how the volume can communicate vital information before the price effect
begins to unfold.
Awakening
Some markets are often freezes for long periods after the abrupt vertical rally. Trader should be ready when they begin to waken. The price action "Petroleum Development" (PETD) increased by over 500% during the bovine rally, which then gave way to a long range side last March. Then, the volume begins to make pins with two-week - a four-week intervals after the price forms a dual basis in May.
Construction volume in the model after a noticeable accumulation of a minimum often signals the renewed interest of buyers, which precedes a breakthrough.
Please note, as a cycle shop "Petroleum Development", in the end, raises the price of the testing 52-week peak in nizah 30 th figure. Price makes a break above resistance for two weeks after the break and rocket in a new upward trend.
Shock spiral - down
Tony Plummer explores the spiral shock in his classic book "The Psychology of Technical Analysis." In his book he shows how unexpected events can cause rapid price movement, which has a quality spiral.
Descending thorn "Multimedia Games" (MGAM) last summer, of course, qualifies as an event of a spiral shock. Engineering work in such cases is to find models of ABC, in which the waves A and C are moving in the same direction as the shock motion, while wave B is moving against him. Additionally, waves A and C are often reached the same length, creating a scenario "otmerennoe movement (for details, see number 47).
Shock spiral - up
Spiral shock can occur in any direction. "MedImmune" (MEDI) has caused a huge spike in volume, when Chiron (CHIR) had to withdraw its competing product from the flu from the market. Notice how the price spike pushes above strong resistance. It was able to start ABC - Rally, with wave C, burst above the May peak, and sends the price to $ 30.
Is there any real difference between this model and the conventional model of a breakthrough? Absolutely. The huge increase in the involvement of participants in the break through the previous resistance level suggests that the price will not be traded under the minimum bar shipa over a long period of time. Conventional breakthroughs have much higher possibility of failure.
The culminating event
The culminating event is counter - intuitive, because it signals the end of the trend just when the crowd jumps in the market. Please note, as "Cree" (CREE) moved higher by two slower, but sustained rally.
Then the pace is accelerating, while the volume starts to increase. Finally, the price goes straight up for several sessions, with the volume reaching a new peak. But both the rally ended immediately, because the market has exhausted buyers. This allows you to operate a market of gravity and caused a substantial decrease. Do not miss the classic signs of the end of the trend, when you sell the rally in a vertical or at sale. Markets in the culmination can quickly transform your profits into losses.
The weighted volume
"XM Satellite Radio" (XMSR) shows all the signs of a breakthrough above $ 32, if not for one detail: the volume-weighted model, or OBV is very weak.
The current bear divergence gives a strong signal to stand aside and allow others to take risks on a false break. This also implies that you can present a good opportunity to trade in the short side, if and when the model starts to turn and break down. The weighted amount represents an excellent analytical tool, but it should be used wisely. The most effective it can be applied when the price is approaching an important test of old maxima or minima. It is better to ignore this indicator, when the market burst through the jungle of models of old clusters. Data distribution, accumulation is much harder to decrypt, when markets do not go.
While the price bars have much to tell themselves, the volume has a small or absent meaning without a corresponding price movement. But do not refuse to study the volume at all. It still adds a certain reliability of the prediction of future movements, if applied properly.
The importance of the volume depends on its location within the overall model. For example, a large volume at break trend line to start a new trend, while the same situation after a long rally or decline predicts turnaround. This seemingly contrary to common sense logic confuses traders and prevent them decrypt the volume at key turning points of market movements.
Below is a five-volume models, which demonstrate a significant predictive power when interpreted properly. Look for these models, whenever you look at their schedules. Then you'll see how the volume can communicate vital information before the price effect
begins to unfold.
Awakening
Some markets are often freezes for long periods after the abrupt vertical rally. Trader should be ready when they begin to waken. The price action "Petroleum Development" (PETD) increased by over 500% during the bovine rally, which then gave way to a long range side last March. Then, the volume begins to make pins with two-week - a four-week intervals after the price forms a dual basis in May.Construction volume in the model after a noticeable accumulation of a minimum often signals the renewed interest of buyers, which precedes a breakthrough.
Please note, as a cycle shop "Petroleum Development", in the end, raises the price of the testing 52-week peak in nizah 30 th figure. Price makes a break above resistance for two weeks after the break and rocket in a new upward trend.
Shock spiral - down
Tony Plummer explores the spiral shock in his classic book "The Psychology of Technical Analysis." In his book he shows how unexpected events can cause rapid price movement, which has a quality spiral.Descending thorn "Multimedia Games" (MGAM) last summer, of course, qualifies as an event of a spiral shock. Engineering work in such cases is to find models of ABC, in which the waves A and C are moving in the same direction as the shock motion, while wave B is moving against him. Additionally, waves A and C are often reached the same length, creating a scenario "otmerennoe movement (for details, see number 47).
Shock spiral - up
Spiral shock can occur in any direction. "MedImmune" (MEDI) has caused a huge spike in volume, when Chiron (CHIR) had to withdraw its competing product from the flu from the market. Notice how the price spike pushes above strong resistance. It was able to start ABC - Rally, with wave C, burst above the May peak, and sends the price to $ 30.Is there any real difference between this model and the conventional model of a breakthrough? Absolutely. The huge increase in the involvement of participants in the break through the previous resistance level suggests that the price will not be traded under the minimum bar shipa over a long period of time. Conventional breakthroughs have much higher possibility of failure.
The culminating event
The culminating event is counter - intuitive, because it signals the end of the trend just when the crowd jumps in the market. Please note, as "Cree" (CREE) moved higher by two slower, but sustained rally.Then the pace is accelerating, while the volume starts to increase. Finally, the price goes straight up for several sessions, with the volume reaching a new peak. But both the rally ended immediately, because the market has exhausted buyers. This allows you to operate a market of gravity and caused a substantial decrease. Do not miss the classic signs of the end of the trend, when you sell the rally in a vertical or at sale. Markets in the culmination can quickly transform your profits into losses.
The weighted volume
"XM Satellite Radio" (XMSR) shows all the signs of a breakthrough above $ 32, if not for one detail: the volume-weighted model, or OBV is very weak.The current bear divergence gives a strong signal to stand aside and allow others to take risks on a false break. This also implies that you can present a good opportunity to trade in the short side, if and when the model starts to turn and break down. The weighted amount represents an excellent analytical tool, but it should be used wisely. The most effective it can be applied when the price is approaching an important test of old maxima or minima. It is better to ignore this indicator, when the market burst through the jungle of models of old clusters. Data distribution, accumulation is much harder to decrypt, when markets do not go.
Forex Magazine
based on www.hardrightedge.com
based on www.hardrightedge.com
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