Traders could have been on the fence about whether price would bounce or break this level, but traders paying attention to the volume traded during this up-move would have had a sell bias. This is because volume was decreasing during the move.
The decrease in volume has continued early this week as price has stalled, increasing the likelihood that price could return lower. We can choose to enter a sell trade with a tight stop above the previous high price, or we can wait for a large red bar with a larger than normal amount of volume similar to what we looked for when we are confirming a breakout using volume. Volume can help us identify potential reversals and give us more conviction on our trades.
As long as we see decreasing volume during a situation where a reversal could occur, we can justify a reversal trade.
If you would like to test how real volume can improve your reversal trades, download a Free Forex Demo account today with free charts and real-time pricing data. Topics include:. This course is completely free, so sign up or watch on-demand today.
Volume Based Portfolio Strategies
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Economic Calendar Economic Calendar Events 0. Duration: min. P: R:. The amount of volume traded.. Which I think is about right. I might be a little bit off but it might be five, it might be two or whatever. I guess it could.
Like if somebody wants to go somewhere, who has an easier job? The elephant herder has got to do a lot of work to get these elephants all headed in the right direction. They typically will probably do this during low volume periods around Christmas or Thanksgiving or interbank market. They can do it of course. Usually what they do is they just kind of write the orders. That used to be a tactic that banks would use. That is one thing that I would point out.
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I think we have advantages as forex traders. That is another thing, some of the market is scalable. In Japan, they blame the housewives who were trading the Yen. They actually blame the housewives and I think that is ridiculous. It was not housewives at home trading the Yen so that was ridiculous. Walter: No. Do you know the name of the book. I will put it on the show notes. Do you know the name of the book, I think it was written by a woman who talked about using volume in forex?
Trading Strategies Based on Volume, Part 3: Identifying Reversals
Do you know who it was? I feel like sometimes traders just have to, you kind of have to pick your tools. To choose these weapons off the wall. Conditions Open position Side Buy or Sell. Amount For i-th trade equals.
Example. Selling an oil futures.
Close position Strategy does not close its opened positions. Termination Strategy opens positions every time the delay value is reached. A complete guide to Algorithmic Trading.