The Better Volume Indicator Exposed
While the Emini-Watch Better Volume Indicator is a fantastic tool that can work to highlight any change in market trends, its excellence is only useful to people who know how best to use it. Here are a few simple tips and tricks for getting the most out of one of Emini's most powerful indicators.
On Volume Climax
The volume indicator can mark a bar as Volume Climax Up or Down by multiplying range with buying volume. A bar is marked as Up by the Volume Indicator when increasing demand leads to increased prices. This can occur at the end of an up trend, the beginning of an up trend, or during the pullbacks of a down trend. This information means that demand has either peaked locally, or traders thought an instrument was going to bottom out long before it actually did.
On the other hand, Volume Climax Down is all about the selling volume, and is an indicator of the opposite of an Up bar: Down bars appear when trends end or begin, or when people anticipate an instrument's peak before its time.
If Volume Climax bars indicate a pivot point, there's no need to jump right into action immediately. It's important to always watch the Low Volume bar; it will indicate when the market has the highest probability of turning due to a significant decrease of supply or demand.
On Volume Churn
The High Volume Churn bar tends to appear when an instrument demonstrates both little price movement and high volume at the same time. This event usually means that a new supply or demand has entered the market, or that formerly fluctuating prices are in the process of stabilization. High Volume Churn bars are excellent indicators when prices stop flowing in either direction and movement slows. This could indicate a pivot point in the market, a pause in an otherwise steady trend, or simply that day traders closing out caused a false positive through usual end of day activity.
On Low Volume
Low Volume bars single out the lowest volume out of the 20 most recent bars. Low Volume bars are excellent for indicating the proclivities of amateur traders; they can also be useful for indicating when a market is reaching and testing a floor or ceiling before the market pivots once more.
Volume is one of the most important indicators you can use, but it's not the only indicator: always check the information you receive from any indicator against other, non-correlated indicators for the best, highest-probability results.??????
On Volume Climax
The volume indicator can mark a bar as Volume Climax Up or Down by multiplying range with buying volume. A bar is marked as Up by the Volume Indicator when increasing demand leads to increased prices. This can occur at the end of an up trend, the beginning of an up trend, or during the pullbacks of a down trend. This information means that demand has either peaked locally, or traders thought an instrument was going to bottom out long before it actually did.
On the other hand, Volume Climax Down is all about the selling volume, and is an indicator of the opposite of an Up bar: Down bars appear when trends end or begin, or when people anticipate an instrument's peak before its time.
If Volume Climax bars indicate a pivot point, there's no need to jump right into action immediately. It's important to always watch the Low Volume bar; it will indicate when the market has the highest probability of turning due to a significant decrease of supply or demand.
On Volume Churn
The High Volume Churn bar tends to appear when an instrument demonstrates both little price movement and high volume at the same time. This event usually means that a new supply or demand has entered the market, or that formerly fluctuating prices are in the process of stabilization. High Volume Churn bars are excellent indicators when prices stop flowing in either direction and movement slows. This could indicate a pivot point in the market, a pause in an otherwise steady trend, or simply that day traders closing out caused a false positive through usual end of day activity.
On Low Volume
Low Volume bars single out the lowest volume out of the 20 most recent bars. Low Volume bars are excellent for indicating the proclivities of amateur traders; they can also be useful for indicating when a market is reaching and testing a floor or ceiling before the market pivots once more.
Volume is one of the most important indicators you can use, but it's not the only indicator: always check the information you receive from any indicator against other, non-correlated indicators for the best, highest-probability results.??????
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