Odds can be stacked against you, so if you want to change that, just follow the smart money. Conversely, if we break below a support level but we have positive readings on the CMF indicator that is a potential false signal. We can also use the CMF volume readings to spot false breakout signals.
What is average trading volume?
Average daily trading volume (ADTV) is the average number of shares traded within a day in a given stock. Average daily trading volume is an important metric because high or low trading volume attracts different types of traders and investors.
Our version also comes with the option of activating the Relative Volume calculation. Again, much appreciation for this excellent indicator! In 20 years of trading I’ve never been so attuned with an indicator immediately. Better Volume is really great … I got rid of other unnecessary and useless indicators … Thank you for Better Volume, the most valuable indicator to me. Remember, this method of identifying turning points using volume is even more powerful when combined with non-correlated indicators, such as the Hilbert Sine Wave. Market bottoms are characterized by Volume Climax Down bars, High Volume Churn and Low Volume Down bars .
It’s that trade with the wall behind you. That’s a harami pattern that just formed there. I have the order window open and I can’t see the volume indicator. I am about to close a position and this is more important for me.
We can read those marks by using the proper tools. Here is another strategy on how to apply technical analysis step by step. This brings us to the next important step.
What Is The Importance Of Buying Volume And Selling Volume
During a down trend, pullbacks are often characterized by Volume Climax Up bars. These show short covering or traders Stock catalyst calling a bottom too quickly. As soon as this Climax volume declines the down trend is likely to resume.
You may correct this behavior by applying the Better Volume indicator to “relative volume” instead of “absolute volume”. Accordingly, this version allows for Volume Spread analysis on both absolute volume and relative volume. Hence the bar’s high to low range is low.
Step #5: Take Profit When The Chaikin Volume Drops Below
A churn bar is a narrow range high volume bar for which the ratio “volume per range” is higher than for all preceding bars of the lookback period. The beginning of an up trend is almost always marked by a Volume Climax Up bar. This shows that the buyers are anxious to get on board and large volume enters the market better volume indicator and bids up prices quickly. A valid breakout should be followed by more buying but occasionally the low of the Volume Climax Up bar is tested. Is it possible to tweak the indicator so that the color of the previous volume bar reflects whether current price is higher or lower than the previous candle close?
A valid breakdown should be followed by more selling but occasionally the high of the Volume Climax Down bar is tested. When there are no volume signals the default histogram bar coloring is cyan. Usually, r1 or s1 is a weak-ish level to trade. Unless of course there is a volume behind it.
Sample Trading Strategy Using Better Volume Indicator
Here is a simple example of a trading strategy that uses the Better Volume function. Then we will see price action on support levels. At the moment, volume has dried up in the last two candles. I think buyers just came into the market. Is this better volume indicator reliable at all? In the meantime, I will see how this will fare during the week.
Posted by: Corinne Reichert