Volume Tutorial:
Why
Volume?
When you look at a chart for a major market index such as the S&P500, you
see only a history of the price paid for a basket of stocks. What you
don't see is the total volume for the entire SP 500 minute-by-minute or
even day-by-day. What you don't see can hurt you.
Why is volume a trader's best
friend.
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Volume offers
a complete picture of the market.
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Volume can
help determine the health of an existing trend.
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Specialty
volume for indexes and volume-based technical analysis are very good
indicators for predicting index shifts.
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Volume is the
indication of supply and demand. It's defined as the number of units
traded during a time period. This number is significant in that it
supports the prevailing price trend.
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The technical
analysis of volume is a basic yet very important element of market
timing strategy. Volume provides clues as to the intensity of a given
price movement.
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Minute-by-minute trading volume shows the reversal points of the market,
and therefore when to buy and sell!
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Currently when
a change in sentiment occurs in the market, most people don’t find out
until it is too late. This can be costly to an investor. Trading volume
offers investors an invaluable tool to know when and where a change in
sentiment is going to occur, and act accordingly.
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Intraday
volume helps you see where a stock is being repeatedly bought as it dips. Likewise, towards the end of a rally,
a wide volume surge often signals that the move is at an end, at least
short-term. If you weren't aware of it before, you should be starting to
see why volume is a trader's best friend.
Additionally, unlike many indicators, volume is
applicable to every timeframe. How can this be? Simple: volume is a
measure of sentiment. Fortunately for us, human nature is the one
ever-present constant of the stock market. Never forget that fact. Once
you have your own emotions under control as a trader, knowledge of this
profound fact will guide you ever after as reliably as the Northern Star
guides a lone sailor across a vast sea. Now you should really be starting
to see why volume is a trader's best friend.
For the first time anywhere, MarketVolume® offers a
complete picture of the market. Not only do we supply you with
up-to-the-minute index prices on a variety of major market indicators, we
also show you the minute-by-minute trading volume. It is this volume that
shows the reversal points of the market, and therefore when to buy and
sell!
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