Does volume matter?

Discussion in 'Trading' started by trader1974, Oct 7, 2020.

  1. trader1974

    trader1974

    If what matters is the movement of the price to make money or lose money, why look at the volume?
    Do they find you any use in short-term operations?
     
  2. maxinger

    maxinger

    It is extremely important.

    That is why my chart is based on volume and not time-based.
    (eg a candlestick is formed after say the volume of 100, not after 15 minutes).
     
  3. Food for thought for OP... (hate to disagree with an old timer like you Max, but this is my official view...)

    1. Volume is not only NOT important... considering volume in trade decisions will cause you to miss good plays. Shouldn't cause you to make bad trades, however.

    2. Having the "X" axis be based upon volume instead of time is of no consequence. Another way to think of "volume bars" is "the time it takes for ____ contracts/shares to cross". And as much of the market's significant action is based upon "monkey see, monkey do"... traders need to be seeing what others are seeing... that is "time based charts" (though they won't be significantly different from volume based charts at the important points).

    (Years ago I had a couple of custom "volume tools".. which correlated well to market turns. Over time, they correlated less and less to the point that sometimes they'd become the opposite of price action. When I recognized this, I removed volume from all of my charts and considerations. The only legit use of volume I see now is the size of the bid/offer and the daily handle to see how much of a large-for-me play I might make.)

    :)
     
    Last edited: Oct 7, 2020
  4. SanMiguel

    SanMiguel

    If you're using the x axis volume, it can be useful to see below off tops or seller exhaustion but these are like once every few month or years type of trades
     
  5. I scrapped volume as a primary indicator long ago. It can be useful for finding exhaustion in the markets but I tend to agree with Scat. I missed way too many moves because of looking for volume confirmation.

     
    SimpleMeLike likes this.
  6. Exactly my point!

    :)
     
  7. maxinger

    maxinger


    That's why don't use time based candlesticks. It is time consuming.
    a lot of very precious time will be lost looking at price and volume bars.

    Use volume based candlesticks.
     
  8. vanzandt

    vanzandt

    hmmm.
    I never thought of that.
    I like that.
     
  9. maxinger

    maxinger

    The only problem is that only some charting software has that feature.
     
  10. traider

    traider

    yes, but not that useful if you use it on a stand alone basis.
     
    #10     Oct 7, 2020
    trader1974 and vanzandt like this.