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How To Use Volume to Improve Your Trading

TradingPub Admin | October 17, 2014

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At the Trading Pub, our main objective is to connect our members with the top trading professionals in the industry, and yesterday's webinar with Hubert Senters was an excellent example of how we continue to meet this commitment.

Hubert is one of the most active and diverse traders in the world, and shared his techniques for using volume analysis to spot high potential entries in the futures, stock, and options markets.  We were pleased to see that nearly 450 of  our members stopped by to hear Hubert's speak, and as promised, we have put together a brief recap of his presentation along with a link to the video recording.

Hubert began his presentation by reminding us that there are several important fundamentals every trader must consider before doing anything at all:

1) Never trade with more money than you can afford to lose, and always be aware of your risk is on any given trade.

2) Always question and investigate any claims and statements made by the media, market analysts, and trading professionals. Until you have tested and validated an idea for yourself, you will never be sure of its validity.

Hubert then went on to discuss that are 11 different types of volume patterns, but focusing on the 5 most common volume set-ups may have the greatest potential to help improve your trading consistency:

High Volume Up: This volume means more trading is happening at the ask and buyers are more aggressive. This helps identify turns, trend changes and continuations.

High Volume Down: On the low volume bar, if more trades are made at the bid, there are aggressive sellers in the market. In the futures market, you will have buyers match up with sellers. In the stock market, however, you can have more buyers than sellers.

Normal or Equal Volume: This means you have no advantage and no edge. There has been a lot of trading back and forth, but there is an equilibrium and no real aggression.

Low Volume: Low volume means the volume is lower than the average daily volume, and  the edge will go to the profressionals and the disadvantage will be with the retail public. This occurs because the retail public generally listens to the media and blindly follows the advice of pundits.

Confused Volume: This is the algorithm that helps to identify where the trades are being made - the ask, the bid, or the downside. Pay attention to Confused Volume because it's an indication that something out of the ordinary is going on. For example, a lot of trades are occurring at the ask, but traders are turning around and selling them immediately. The edge in this type of volume pattern is usually with professional traders.

It is important to be aware that volume leaves clues about what to do next. There are repeatable price and volume patterns that you can be exploited:

Red-Green Crazy Ivan: If you have a red volume move followed by green volume move, the market will probably go up. If it goes green, a high percentage of time, the market will go in the same direction.

Green-Red Crazy Ivan: This occurs when the volume goes from Green Up to Red Down and indicates the market will fall apart at the down side.

These patterns are extremely useful for turns and trend changes, continuations, and as confirmation of the move with the next price bar. Regular volume gives you information, but it is not the best information you can use when looking at volume. That is why Hubert and his team developed the Climactic Volume Indicator. In this system there are specific rules to help identify turns, trend changes, and continuations in the market.  Here are some examples of how Hubert's Climactic Volume Indicator may help you determine what's going on in the markets:

Purple Bar: Indicates confused volume. In other words, heads up and pay attention!

Gray Bar: Indicates normal or equal volume. We have no advantage.

Yellow Bar: Indicates low volume.

Green Bar: Indicates a bullish trend.

Red Bar : Indicates a bearish trend.

The Climactic Volume Indicator works on stocks, options, futures, and bonds. It does not work on Forex, because there is no volume in Forex. They also work on all time frames and tick charts,  and may help you spot changes in direction and help you stay in winning trades long.

The Climactic Volume Indicator works on a variety of platforms including Think or Swim, Ameritrade, Tradestation, eSignal, Ninja, and Sierra Charts. In addition, it can be installed on up to 3 computers at the same time, and across multiple, simultaneous charting platforms.

WATCH THE FULL CLASS WITH HUBERT HERE:

IF YOU WANT TO TAKE YOUR TRADING TO THE NEXT LEVEL, HERE IS YOUR OPPORTUNITY WITH THIS SPECIAL OFFER FOR THE CLIMACTIC VOLUME INDICATOR

Simply call Hubert's team 859-963-3445 or CLICK HERE to claim your copy!

Cheers,

The Trading Pub