It isn't so much a question of belief or disbelief but of appropriate application. Volume is trading activity. If there's very little volume, there's very little trading activity. Perhaps one's trading doesn't require a lot of participation on the part of others. If so, there's no reason to pay much or any attention to it. However, if one wants to see a lot of participation, such as many do with breakouts or reversals, then volume becomes more important. Compare, for example, trading at 0200 with trading at 1400 (NYT). Everyone makes his own choices, of course, and there's no particular reason for anyone to try to convince anybody of anything. However, it is important for those who debate these questions to understand just what volume is and what it represents. Otherwise, yes, it is useless.
I could write 5 pages here regarding volume. But my typing being what it is, it would take me 3 days. So I'll be brief. The current discussion in this thread seems to have switched to volume spikes. Yes, there usually is a big movement in price. But you must take into consideration the position within the trend where it occurs, as it can have opposite implications. Additionally, you can have large volume on no or little change in price. In stocks, that could be a cross trade, and can be ignored from a TA point of view as it does not effect supply and demand or alter the trend. In futures such could be a MM attempting to remain flat, and again having no effect on the trend. If there is a change in or reversal of the trend that is accompanied by large volume, it most certainly is of value, as it validates the indications of the price movement. Without such, the move would be questionable. That is not to say the the move may not work out, as increases in volume often occur on the 2nd move in the indicated direction. A point other than spikes which you would find useful is that even though volume is low, it may be several times higher than immediately preceding volume which can provide valuable information regarding the current price movement. Additionally, the lower the volume the better is of great technical value in many cases. Volume can very often clarify the price movement to where mistakes can be avoided or opportunities are not missed. I could go into detail about the above and also many other uses of volume. However, few are interested in such, so I won't. But as you are not now using volume, may I suggest that you spend a few months doing detailed research on the subject. I imagine you have studied such in the past. But maybe this time around you'll see it in a different light. In fact, I'll refund the money you paid to read the above if you do not find that adding volume to your analysis has not improved your performance significantly. And it will certainly not be detrimental to your K.I.S.S. strategy!
@Scataphagos I got that next to last sentence wrong. Should be: In fact, I'll refund the money you paid to read the above if you do not find that adding volume to your analysis has improved your performance significantly.
The only reason I watch volume is to see if the position I want to take can be taken in a short time and without moving the market too much. I mainly trade index futures. For the rest volume has NO VALUE AT ALL FOR ME. And I trade long enough, and with above average performance, to be sure that I don't need volume at all. There can be a rise in the price if volume rises, but there can also be a rise in volume when the prices rise. What was there first: the chicken or the egg?
Thanks for your offer, but I concluded years ago that volume consideration for trades was at best coincident and at worst harmful.... which is why I posted to OP, "don't waste your time on it." I know, it drives volume believers nuts when I say it's irrelevant/harmful. But I messed with it for quite a few years... and thought about it a lot since. At this point, and keeping with K.I.S.S. discipline, I can't even imagine how volume consideration might be beneficial to trading. IOW.... (1) volume is neither definitive no additive in value, and (2) by the time you get volume info, you should have already received it from the price charts. Therefore, "why bother"?
That's "volume", yes.... but just the size of the bid/ask on the DOM. Good to know if you're trying to trade size in a thinner market. However whatever the bid/ask volume on the DOM, it doesn't add to picking a winning trade or avoiding a losing one.
OK. Again I couldn't spark your interest in a valuable part of TA. . Maybe someday we'll agree on something! Oh well I got 4 likes after writing all that, so it wasn't a complete waste of time!
You must be trading institutional size to move the market in an index future. Like in the 100's of contracts at a time......