Mastering Trading with Volume Analysis:Techniques and Tips

Hey there, folks! Today, I'm gonna talk about how you can use trading volume to make your trading strategy even better.

Previous article you can check by this link:
How can trading volume influence your trades?

The Momentum Rule: When there's a substantial volume during an upward trend, it will indicate that the next move could potentially continue in the same direction.


Stop Volume Levels

These are indicators of strong levels where the price is likely to bounce off. You can use them as an initial signal to enter a trade. Typically, a correction happens after the second price movement with lower volume, following the breakout from the volume level.



Now, let's talk about horizontal volume.

Horizontal volume represents traders' interest in a specific price level based on all the executed trades within a chosen period. Essentially, there are two patterns: false breakouts in various variations and rebounds from levels.

There are two scenarios: the price approaches a level and then reverses. In this case, take note of the range where it stalls and determine where to place your stop loss. Usually, it's set behind the bar that serves as a support level.

For better clarity, let's go through examples, starting with using the Fixed Range Volume Profile in TradingView.

Pattern P:


Very often, prices bounce off these profiles. Then, you examine the entry point from the false breakout of the profile.

A similar pattern that traded involves a false breakout of the profile followed by a subsequent retest


If you're interested in delving deeper into this strategy, I recommend conducting backtests and studying the movement of the assets you've chosen from the profiles. This will help you identify patterns based on your experience. There are countless patterns out there, and what will work for you is what you can break down and analyze effectively on your own.


How do you find this article? Share in the comments your experience with working with volume in trading! Always appreciate your subscriptions and likes. Have a great trading week!