Volume Leads Price by Trade Aptitude

Tuesday’s results: No trades suggested.

Today’s Best S&P Futures Turning Points: Buy 6023.75 stop 6018.00. Short 6134.25 stop 6138.50. 

The World Index: (+100/-100) remains at +29 with sentiment mixed but leaning Bullish on rising volatility. 

Catalysts: Jobless Claims @ 8:30. 

Quick Tip: Volume Leads Price

For as complex and chaotic as the markets can be, price chart traders only have 3 variables to analyze. Price, volume, and time. Most technical traders agree that volume leads price. 

Price moving up with volume increasing is very bullish. It’s hard evidence there is plenty of buying interest. Conversely, price moving up with decreasing volume is not as bullish. The buying interest is waning. 

Price moving down with volume increasing is very bearish. The selling interest is strong. Conversely, price moving down with decreasing volume is not as bearish. The sellers are weakening. 

How can you use this data? For tuning your entries and exits. 

If you’re a breakout trader and volume is surging at your entry that’s good news. If you’re a reversal trader and volume is decreasing where you’re ready to enter that’s good news. 

Similarly, if you’re in a position and volume is decreasing (either direction) then scaling out and banking profit makes sense. 

There are many ways to look at volume: pure volume, averages, accumulation, and more. Invest some time in finding what resonates with your strategies and  consider adding volume analysis to your entry and exit rules. 

Our trading teams focus on multiple strategies for day trading futures and high-probability candidates for swing trading options. You can try either or both risk-free. Join us.

Trade fearlessly,

Mike Siewruk

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