How predictive is volume to index futures, since they are ultimately controlled by what the index is valued at, which is controlled by the individual stock prices? I know the futures don't move exactly with the index, they definitely reflect the sentiment of the recent past and hang up at all the psychological support/resistance. Just wondering what your experience is with using volume as an indicator.
Very predictive. I've been posting this guy's channel a lot today, but watch this guy! He teaches and uses volume very consistently and successfully as a major indicator. He teaches about the real relationship between price and volume and how to successfully trade using both! http://youtube.com/user/SnP500Trader Well worth the price of a subscription - Free!
I believe you can become quite proficient if you combine price with volume and are able to interpret the situation correctly. You should observe it for a while and see if the interpretations of this individual at YouTube make sense to you. If not, you may even neglect it. It can be a distraction, as well, if you interpret too much into it. Things like "volume is drying up" or "there is not enough steam in this move" come to your mind which is a complete distraction. I don't even watch volume and concentrate solely on price because ultimately price is the only thing that pays.
NoProblem, I'd seen you post about the guy on YouTube earlier. I was planning on watching those videos sometime soon. Good to know he covers watching the volume, too. Yeah, ultimately price is all that matters, and I prefer watching price action to just looking at the charts, but I only get about 2 hours a day to trade, so it's nice to be able to interpret what's already happened so far in the day in the best possible manner. Thanks everyone!
Price is all you need. You make money when price moves from 1 spot to another. As long as you get a fill the amount of volume makes no difference. In daytrading price is all you have time for to make fast decisions to pad the bottom line. Volume is a distraction. Like if you were at a dance and looked really good. Would you prefer i came over and asked you for a spin or would you prefer i ask your IQ first? Same thing in trading KEEP it simple. Bighog is a master as simplicity .
This is probably worth your time. http://www.elitetrader.com/vb/showthread.php?s=&threadid=29005&perpage=40&pagenumber=1
Here is a classic reason that using volume is a waste of time and just is a distraction. how many times have you heard this at the start of a pre-holiday session or pre-report days etc. Should be a low volume day today because many are out for the holiday so we might get no moves or the moves might be quite large. KEY WORDS = MOVES not the amount of volume. BIG players need BIG liquid volume to get in and out, small fish like me and you do not need volume,,,,,,,,,we just need to be filled. Price is what CAUSES volume to come in and join the fun.