How to make money in the stock market. http://www.topdogtrading.net/stock-market-trading
Stock Market Volume Analysis along with price action is often taught as the holy grail of trading, and some people even claim that is all that is needed to trade profitably. This video challenges that philosophy head on. Warning: very controversial.
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The information contained on this video is for informational and educational purposes only. We are not registered as a securities broker-dealer or as investment advisers, either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Trading and investing involves substantial risk. Financial loss, even above the amount invested, is possible. Seek the services of a competent professional person before investing or trading with money.
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HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
I came here trying to find a way to filter out low volume trades that lack any movement. MACD and Stochastic still give me the green light to go on those trades sometimes.
Any particular method to filter out these bad trades? Maybe a link to one of your videos.
no need. I just realised from your other videos that tick charts already smooths out sharp volatility. Thanks. Only problem is trying to find a platform that can backtest 133 or any other tick chart. Im currently on ctrader.
Amazing! Really useful insight. You have saved me unecessary time where i would have tried to find a macd indicator that multiplies price and volume together. No need now, macd on price alone is good enough along with other tools ofcourse but not volume.
I agree with volume not being a leading but lagging indicator...
But how can you read the volume bars if these all show the same color?
There is no distinction in the color of your positive or negative volume bars! Your reading makes little sense.
Volume is a great indicator. Alone it is useless though I agree. Use Volume Price Analysis. Read Anna Coulings book on VPA it explains everything and makes total sense. You need to connect volume to price movements to help get a better understanding for where the market is heading. I definitely do agree though that looking at volume alone isn't very useful. If someone is just looking for huge volume spikes to predict price movements they won't have much success.
Also in addition to my previous comment, it is difficult to establish the veracity of whether volume is an indicator or not by just taking a few examples, instead of providing overall probability point So for example comma if there is a back test result on a few years at least of data on several stocks where we try to look at volume and then find that it is OK not much use then perhaps we can say that it is not a good indicator. There are potentially millions of pattern that you can find in stock charts and we have to look at which is the most probable setup.
Thanks for a useful video. You have just looked at one volume bar. Should we not look at the trend of the volume and then along with it also look at the price? And if that is true, is price volume indicator something that we should consider? As per dark pools, if they are not a part of the exchange then how does it matter anyway because the price should not be influenced
How can you look at volume in isolation and trade? This is totally wrong. In same charts if you look at volume and the corresponding bar action it will give you a very different picture. Volume is never looked at in isolation
I find that if you look at the smaller volumes, you can see interest increase or decrease before the spike. Your first example shows a 50%+ increase in volume before the volume spike. You should also use volume with candle formation and/or size, and use it as an additional signal with price action. I also use a moving average on my volume as an indicator for above or below interest.
upvolume vs. downvolume is good to know, for short term trades. the single total volume for a bar doesn't tell you if that volume is mostly buyers or sellers. dark pool (block trades ) usually happen around 4pm and do show up on the tape, filled at one price. What you see on level2 at a particular price level, may not be all the shares sitting at that level. tradestation allows you to (show only) a part of the shares you actually want to trade, so i'm sure the big players also have that capability as do the market makers.
You are completely Joker!
From what i've seen here very clear to me, the way you read the volume show me that you just like majority people who don't know how to read volume properly, you can't read volume like that to understand market.
Seems to me that you don't what you are talking about. it's not about the chart, it's about how you read the chart properly. It's not about the volume, it's about how to read volume properly!
dark pool volume is part of the consolidated tape that is provided to all, its all there.
most of the volume action is caused by stops and squeezes.
Top: I have often wondered regarding volume and the significant increase often, as you had indicated, leads to trouble, as this is *not* a leading indicator and can be deceptive. The dark pools are a very interesting concept along with its significant volume not being evident in the charts nor the tape. I appreciate this. I bid you well.
I've created 2 YouTube videos on trading Bollinger Bands which have to do with volatility. You can watch them here: https://www.youtube.com/watch?v=9hDfRMMh7nQ&t=36s and here: https://www.youtube.com/watch?v=zUvZ9OfT7qI&t=3s
Thank you! makes sense! :), Helps allot as im new to this, so still trying to figure out what the best indicators are. At one point I actually thought that monitoring Volumes makes sense, as that might indicate when the "pro's" are buying.
Can I just say I think your reading volume wrong, ive come across so many videos where they read the volume of the entire trend instead of reading a few bars like you are doing. I havnt fully mastered volume myself to say your definitely wrong to say that volume is misleading, but I am pretty convinced that learning how to trade volume gives you more of an edge when used with price action and other indicators, and im pretty sure its a little more complicated than checking a few bars like you are doing.
Thank you so much for your answer! Is Volume unreliable in day trade operations with S&P mini, for example? What about indicators that use volume in it's formula (life MFI or Elder's force index). Are they unreliable too?
They're not as exacting as most people assume. That doesn't mean they can't be used with some effectiveness when combined with other pieces of evidence. Nothing works in isolation to make money in the markets anyway. We're always using a number of non-correlated variables to establish a probability scenario for ourselves.
You're welcome Steven. People often claim that price and volume are the most important things to watch, and some say they're all that's necessary. I'm just trying to point out that even those things are not completely transparent.
Barry, thank you for your very interesting and informative point of view on volime. From what I have heard, Dark Pool activity is not reflected in intraday prices but they do affect long term price movement via fundamentals i.e. the institutions want to get in and out of stocks quickly and safely without moving short term price but they do want the stock to move up in the long term when they are getting into a position.
But if the dark pool trading does not affect volume charts, then the dark pool trading should also not affect publicly quoted prices. Isn't that so? If that is so, then we should not even care about the dark pool trading, because what we ultimately care about is price.
I see where the confusion is. In a normal, transparent auction place based on supply/demand, large orders by "smart money" would typically cause the price of the market to move, which is exactly what the institutions don't want to happen because then they aren't able to get the price they want on their entire order. They go to dark pools so as not to create that change in price. So they affect publicly quoted prices by keeping prices artificially the same, when they would normally be expected to move. Thus it makes it harder for traders who rely on price and volume signals to trade, to accurately read market signals because they're "disguised" at the time they occur. Hope that helps.
Thanks for the link. My understanding of dark pools is not very clear. However, the article that you linked contains a following passage: "On a stock exchange, when an order is sent in, the price of the stock is adjusted and everyone with a data feed sees it. Dark pools only report data after a trade has occurred. At that stage, information about the trade has little influence on the price." The passage seems to imply that dark pool trades don't affect price.
Great question. That's one of the biggest problems - it actually DOES affect public price quotes. In fact, that's one of the main reasons the institutions use dark pools. The complete explanation is too much to detail in a brief YouTube comment, but you can read more details on Reuters website here: http://www.reuters.com/article/us-markets-darkpools-analysis-idUSBREA3605M20140407
Once again......Dr. Burns cuts through another slice of "conventional market wisdom".......and cautions all traders, inexperienced as well as experienced.........to not "let your guard down" ........with respect to your evolution on the path towards professional trading. Your approach to your trading "as a business" must be accompanied by years of practice, sound understanding, market savvy, and basic wisdom. And if you do not have, as one of your "foundational tenets", the principle of "to live AND to learn", every day of your life.........well then, you will not achieve your full potential. Dr. Burns offers you innumerable keys and insights into those doors you must pass through and master.......in order to become the best in this business. Most will never achieve it. But you will not be able to say he did not try to help you.
Thanks Barry !! I heard that institutions still have to report volume after the close.. so it eventually has to show up on the chart, do you know if that's true ? Thanks again for another very clear and informative video !!
HELLO BARRY, it is interesting break schemes against financial storms, however you can configure in subtitles in Spanish, because more than 10,000 aggregates that I have on facebook, are mostly Spanish-speaking. a hug.
Dr. Barry - Thank you again! As someone who doesn't know how to trade, I need to be reminded that i may not figure this out.(ha-ha). But you are so right, as I know I don't know, there is so much info about volume prints and so on, they seem to work some and one can purchase special indicators but it seems to me that if you dont know how to trade, no indicator will work....keep up the great work!
Since they are using the volume numbers provided by the public exchange, they have the same problem. It doesn't mean it can't be used ... just understand that they don't represent all the trading and that when institutions make big orders they often attempt to do it through dark pools so as not to move the market price while they're entering. In other words, the publicly quoted volume can be used as one piece of evidence in making a trading decision, just understand it isn't as accurate as most traders assume and therefore other factors MUST be considered as well.
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