I am the wrong person to explain it, because I don't believe it. Kind of like me summarizing the Gospels. But I'll try, in the hopes that it will be so laughably wrong that Jack or The Et Al. will step in. In the early stages of modestly rising MoMo (I am ignoring a real screamer here, which behaves somewhat differently), price attracts interest as evidenced by similarly rising volume. As the move gets mature, interest wanes because of fear of overextension and due to profit taking, and the volume falls. This is the first place the Faithful believe that volume leads price, presaging a retrace. A combination of waning interest and price overextension leads to a top and a retrace. Price falls first on modest volume, less than during the rise, and eventually interest in selling or shorting wanes, and the volume on falling price decreases. This is the second place the Faithful believe that volume leads price, presaging a trend resumption. All the weak hands being shaken out, and the shorts overexposed, the rise resumes fueled by short covering and with the same pattern repeated one to four times depending on the trend strength. Then you either get a going nowhere congestion or a major reversal with the same pattern repeating inverted on the way back down. In a trend reversal, what starts out looking like a retrace changes when volume starts increasing on falling price. This is the third place the Faithful see volume leading price, presaging not a retracs but a reversal. A screamer behaves differently with orgasmic volume blowoffs that are a bit more complicated to describe. There are other patterns, but this is the basic one. Don't believe a word of it! Cannot comment on any similarity of PV to price inflation, as I am an enginear, not an economyst.
nice summary on such weighty subject search 'trading volume analysis' you will get hit with tons of info which creates massive confusion. Found this you can google the rest Four Stock Trading Volume Indicators No discussion of technical analysis would be complete without a discussion of volume. By paying attention to trading volume, you can pick up clues about where a stock is headed. Here are four general rules to keep in mind when youâre buying or selling a stock: 1. When prices are rising and volume is increasing, the uptrend will likely continue. 2. When prices are rising and volume is decreasing, the uptrend will likely falter. 3. When prices are falling and volume is increasing, the downtrend will likely continue. 4. When prices are falling and volume is decreasing, the downtrend will likely falter.
I see. Thanks. Maybe Jack is right. We're just too lazy to do the work required to figure this out. I really don't want to have to wade through 341 pages of what is likely a bad idea. But, alas, one does need to put in the work to succeed.
Were I to correct your chart, I would have to take a few liberties. Your chart has two instruments on it; namely the RTH chart and the non-rth chart. Their is no overlap in the characterisitcs of these two instruments. If you have a copy of "the Pattern" you can begin to use that to learn how markets work in real time. Your chart has some mumbered statement that are not linked to one another. It may be true for you that the events in markets are not linked. "The Pattern" does show this linkage and one faster way to build you mind to understand this fact is to make a log of fives cycles of market activity using a log. Public Broadcasting of TV has guests who help them raise money. One of them is a neuroscientist who focuses on a mental system for achieving a goal. He advocates that the goal which is external to the mind can be achieved by using the mind. He suggests a journal. We could work together and perhaps you could come to understand what he is suggesting to you. Others have posted a few hypotheses regarding price and voulme and all four of them fit together to form a hypothesis set (HS). I glanced at you chart, and were it error free, it could be used to make a pragmatic point or two. Your chart begins with two events and they are in order in terms of events on "The Pattern". You didn't prove this fact, however. Others gave you the hypotheses to prove this fact, but you, at this point, do not have that mental capability to connect the mental dots. See if you can increase your capability. If you cannot, do not worry about it. Doing work beyond an observing beginner status is not going to be in the cards for you. Any number of people here could draw one line on your chart and you might be able to begin to reason. For sure you were not able to draw that line. Ask yourself why?
very cool. the one line I had thought of was the line that explained the his line 1 was in a short trend (during overlap of a short followed by a long trend) and his line 2 was in a long trend. What separates the two lines is called a BOO of a RTL. This person, apparently is considering learning how trading works or he is an "inventor" who is going to re-invent how trading works. Why would a person who is uninformed be chatting in the way this person chooses to express his beliefs? Thanks for fixing those other parts of his chart.