Volume.
What operates the market? News, economic circumstances, moods of investors-is doubtless.
Trading strategies until recently in many aspects were built on the technical or fundamental analysis.
I won`t discuss strategies based on these kinds of the analysis, are they successful or not, but I will pay attention that the data about volumes and possibility to analyze them, was accessible to the limited amount of people.Today electronic trade is accessible to everyone, are accessible as well the data about the volumes, received directly from the stock exchange.That makes my trading stable.What is the volume?This is a quantity of actions or the contracts bought or sold for the certain period of time for a determined price.Why the volume is so important? Because it is the primary source, the market engine.Market movement defines its volume. Trade "blindly" remains in the past. After all large players don`t lose their money.Neither large investors, nor insiders lose their money.They definitely know where the market goes.Ability to correctly understand the saved up volumes and to see large positions, is a basis of successful trade as the person joins "the movement", instead of going against.How does volume formation happen? How the market reacts to the prices with great volumes? Schematically it can be represented so:




To a certain price the market "shows an interest". On it, the volume is formed.Volume much larger, than on the other prices.Strong movement of the market will begin from that price.

What is the difference between analysis of the usual bar chart and charts with volume?
We take the chart of the Japanese candles, for example with an interval of 5 minutes:



And cluster charts with volumes(5 min):




It displays accumulation, prices on which the maximum quantity of positions(buy-sell) for the period
(5 minutes) has been placed.

The rating of volumes in process of importance:
1. Contract volume (greatest possible from volumes)
2. Volume of the week (following and previous weeks)
3. Volume of day (following day and previous days)
4. Volume of an hour (a half an hour, 15 minutes, 5 minutes etc.)

All these parametres define the future and current behaviour of
the market in the price space. The price goes from volume to volume.
The most serious movements of the market happen after accumulation of certain big volume on one price.

The volume is is primary. There are three types of volume:
Tick volume-shows quantity of contracts or shares that entered the market for 1 tic.
Quantitative - shows quantity of made transactions for the certain period of time.
Pure volume - shows quantity of contracts or shares bought or sold for the certain period of time for a
determined price.
Pure volume is indicator for interest of the market in some prices, that allows to open position and close it.
An exchange still long since played a role volume. Indexes, beans, metals, currencys, shares-everything trades by
volumes got from stock exchange.For example: on one price a turn-over of money is bigger than on other prices- that
means this price is a level for us to open position from it.

We pay attention to volume accumulations during such period of time:
- the contract
- a month
- a week
- a day

and during the day( for intraday trading):
- an hour
- half an hour
and smaller periods: 15, 5, 1 minutes, etc.

The Principle of trading from volumes is based on movement of the market from one large accumulation to another:




Importance of the volume depends on quantity of made positions (lots or shares on some price) for the chosen time interval.

Some examples of volume accumulations:
The 30-minute period (the euro futures):



2000 lots.



40000 lots.

Main purpose of this thread-understanding the movement of the market with te help of volumes. The sense of all theory is very simple: the market forms volume, and than trades from the prices with max volumes.





Simple example. We take any day, for example 01.12 (the euro Futures): the Volume of day was made on the price 1,262:
Volumes you can take from programs working with feed.

Now we take a look how the next day trades from that volume.



Buy from max volume accumulation of the previous day.

It is important.All intraday movements lean on intraday volumes of day + last volumes. The FX market follows these quotations.Reaction of
the market to these injections (volumes) looks in shape of "rebound", as is shown in drawing above. Why so the market reacts to the volumes?
The price on which the large volume is accumulated, it is the price on which large players buy or sell, people, who knowe how the system works.
On such prices turn-overs are hundreds million dollars, these prices are key levels from which any market trades.
On an example 2.12 this situation can be described so:
On Monday large positions have come into the market under the same price. It is possible to consider it as the price behind which there are big money.

On Tuesday we see that during the period from 4:00 the market was above this level of a previous day, and has pressed through the market only to the price 1,262.Usual traders are not capable to resist injections of big money.We see reaction of the market to the prices with large volume in a kind of rebound from that prices.

Alex Hi! Where you take information about volumes?
or it is secret

There are a lot of programs working with feed.I won`t write their names here, I don`t want this thread be banned for abuses in advertising.In p/m.

Example of the same trading principle.Max volume of the day-2.12 was formed on the price 1, 27:



The same system of trading from the max volume of the previous day:



Pay attention that the market has reached volume of Monday 1, 262 - level from which traded Tuesday.