I believe volume is useless in determining direction of a trend. All the adages incorporating volume, high volume indicates continuation of trend etc. are just useless! This rally happened on low volume, yet it continued! Maybe there's a usefull component of volume in super high frequency scalping, but I don't know where. Volume at best is just a gauge for volatility. High volume is more activity is higher volatility. If you look at charts higher volume usually indicates higher downside volatility. But it can't be used for trend analysis! Another technical analysis myth busted!
The market cares not about your inaccurate 'belief' system. Without Volume, you have no trades - no market. As such, I'm guessing you erred slightly with your 'at best' determination. In a down trend your observation holds true, and an up trend, the market contradicts your analysis. I'm confident you intended to say, you haven't figured out a way to see through the fog, rather than, you can't do it, therefore, it cannot be done by anyone. Well, no. Not really. You did prove quite a bit to quite a few people, but I don't think it was what you intended. Thank-you very much for the laugh on this Saturday afternoon. Who knew running Virus / Malware Scans and General Computer Maintainance could be so entertaining. Thankfully, someone on ET is always at the ready. - Spydertrader
Volume means nothing unless you are trading huge volume... The average trader is not trading millions of shares/thousands of futures contracts -- so volume is useless unless you need that liquidity.
Even when you look at a chart, fed announcement, jobless claims. there is high volume and high volatility. High volume equals high volatility Volume is all useless elsewhere. Anybody that says I'm wrong, where is your proof?? Do you trade with volume?
Some things to think about. 1. When markets go up on low volume, they drop fast, ie. recent action. 2. Volume in ETF's has skewed volume reporting in the indexes themselves. 3. HFT, dark pools, and such have skewed volume reporting with their off market transactions. Don't bother you can't afford the data they have. I have seen Bloomberg inclusive data, it's thousands a month and it shows all transactions HFT, retail, everything. 4. Regarding points 2 and 3, if you look at relative volume reported you can still get and edge. I didn't say you I am referring to someone like me, and others, that have put in 1000's of hours and paid their dues. 5. Spend time at a place where ppl. know about volume, ie. traderslaboratory dot com. 6. Here is your last freebie. Stocks lead futures, yes I said that correct. Watch the market internals, the real time $TICK and your will see the tells.
Volume is no holy grail but is most definitely useful info. Its like anything else, you have to put it in proper context and know what to look for. It can let you know with better certainty whats going on and what the right side of the market is. For example, if you watched volume around 3ish on friday, it told you do not short or you may be in for a world of hurt. It takes a while though to know what to disregard and what may be of interest. But yeah, it certainly wont turn you into a superstar trader or anything.. So I disagree with the OP.
if you tracked the amount of shoppers that frequented a mall through the years and utilized that information in an effort to see what months there was an increase/ decrease in the volume of shoppers . . . you could not see trends develop ?