Hi Susannah, My experience is the following: Volume is a leading indicator of price. Volume provides context as to where price is within a cycle or trend (Dominant or Non-Dominant movement), where it is going, and when it has reached its destination. Volume can be seen prior to price movement and projects price volatility as well as price continuation and change.
I think what he's meaning -- correct me if I'm wrong -- is that if you start seeing increasing volume on a given direction, chances are that direction will continue until volume starts to fall -- and when volume starts to peter off, that gives you a few seconds' notice of either a pending reversal or pause before the next move in the same direction. At least that's how I'm using volume and with fairly decent results on my charts.
I agree. Big volume also kills moves. Climax blow-offs often lead to sideways action prior to continuation or reversal. Often a huge volume bar tends to signal current over sold/over bought - hence, a reversal.
ES and ER2, yes.....but I daresay this applies to pretty much anything you trade -- but I'll leave it to those wiser than I to confirm that statement.
Learning how to read volume adds immesureably to a traders' success in the markets. When markets are range-bound, volume tells you so. When markets are breaking up or breaking down volume confirms this. When markets are extremely bullish or extremely bearish volume always keeps you on the right side of the markets. Thanks for your post ehorn, good luck in your studies, susannah.