volume analysis in intraday futures trading

Discussion in 'Trading' started by ADX_trader, Oct 15, 2002.

  1. From my own experience, volume analysis is quite helpful in the stock market, especially for position trading. But in futures day trading, it seems to not so significant. So far I cannot find any pattern in it. Does the proverb "Volume precedes price" also applied to the futures?
  2. I would say that intraday technical patterns are higher probability when the average daily volume is good... on lower volume days not only are moves more pronounced and more choppy, but stops can be more painful than anticipated when, say, support is lost and you are long...
  3. Looking at a 1 minute chart of ES or NQ, you will many times see volume spikes at the point where the market changes direction, at least briefly.

    I've done some testing with TradeStation and have found that if you look for extreme volume spikes, and wait for a candlestick to confirm a new direction right after the spike, you can do a little better than 50% picking up a point or two.

    I haven't actually traded it, because it's counter-trend trading (I prefer trading with the trend) and the probabilities aren't high enough for me to be comfortable with it. But I believe there is some correlation between volume and price direction in at least these 2 index futures.