what is volume in stock market what I'm going to share with you today we're going to be using
tradingview here for the volume indicator and I want you to understand volume and trading
and this is so powerful and I'm going to explain with you with an example of a couple different
ways to treat this and the volume is one of those things that really should be at the heart of your
trading and because here's how to think of it when we talk about volume a lot of people they
don't really totally get the idea so here's our volume plotted down here on Trading View
and what what does this represent not even what does it represent
what is it graphically plotting literally graphically plotting it is plotting money
so I encourage you to help you in your trading to substitute the word volume for money dollars
Dinario Yuan, Yen, Euro whatever it is it's money moving through the market so when you call it
money instead of volume not that volume is wrong but it helps you to keep in your in the front of
your mind your conscious mind wait a minute what's happening here and what's happening is
clean this up a little bit is money makes the markets move okay money makes the markets
um go around so I do not believe money makes the world go around love makes a
world go round but markets make the or money makes the markets go around so let's make that
distinction just for sake of well keep her priorities right so more demand and Supply
prices go up more Supply the demand prices go down that's about the money coming in now let
me ask you this question to lead up to this use the Socratic method a little bit so this shows
you how much money is coming in and sure if it's different markets it's shares Lots contracts but
um when we see a lot of money coming in that is a very very important sign for a couple of
reasons number one yes there's a lot of strength Financial power behind that okay so yes that
is one demand absolutely but there's a second level of understanding to this and that is this
tell me in fact type into the comments below if you want to really test yourself here who has
bigger trading accounts your average amateur training from home average mom paw trading on
their laptop desktop cell phone whatever or the institutions professional Traders I'm talking
about hedge funds Banks Sovereign funds no they're trading with hundreds of millions
more like billions in some cases even trillions of dollars whereas the average retailers trading with
hundreds thousands maybe ten thousand or maybe a hundred thousand but even that's rare but even if
they're trading with hundred thousand dollars that's nothing compared to billions right the
ratio there is just so whacked so the extra bonus that we get for following big voluminous Market is
that we're not only following the demand yes we're doing that but we're also following the smart
money and as opposed to following the amateur Trader the small volume which is the oh boy
better be careful here is the unsmart money or not as smart money that sounds even nicer and knowing
that 95 or so of Traders lose money I'd rather go with the smart money I think you would probably
too so that is why those are the two reasons why volume is so critical in your trading by the way
real quick if you have a favorite volume indicator type it into the comments below I'd love to see
and compare and get feedback from people with your favorite volume indicator is what you're using
now and if it's working well for you so what I'm plotting here by the way is not a volume indicator
this is raw data that's one another thing I want to make clear because I've gotten this feedback
from the students and people that I've taught in my seminars uh they think this is an indicator
and it's not it's it's deceiving because a lot of trading platforms they will put this
um tool we'll call that a tool we'll put this tool in the list of indicators and therefore
it seems like oh it's an indicator because it's in the list of indicators but technically it's
not an indicator is a mathematical formula and this is not a mathematical formula these bars
are literally telling you the data they're data points there's no math equation involved just like
with price no no calculations done there other than oh here's where the market opened they went
down to there went up there and it closed there they're just data points it's not run through any
kind of calculation or algo and the same with volume that's how many shares contracts a lot
how many dollars were traded and that's why it's important so these are not neither one of these
are indicators price or volume okay but there are volume indicators if you choose to use those all
right so having said that I just had to really say that because this is how I trade it so when we get
a breakout okay we've had lowest lowest lows and then um Boom by the way just real quick because
I'm going to bring this back up later one two three We Touch This create this resistance with
three levels and then boom we zap up above that we zap up that's the new term instead of Gap up yeah
now now uh gen elementop is calling this zap up but look the real important thing here all jokes
aside is how much volume comes in lots of buying so this is not created by you know Billy Bob in
uh you shouldn't mention any locations but you know it's just not created by someone who has
little money it's created by the professionals people with big money so lots of money comes in
and now we can say oh okay that is the beginning of a new trend out of consolidation there's a lot
of power behind this just financially and there's a lot of smart cookies behind this
all right so that's what we want to see at the beginning of a new move
so now that we've talked about the beginning of a new move let's talk about the end of an
old move so this is how we get into a trend how do we get out of these trends
to get out of Trends is a different situation now especially then they can vary you can get
v-tops and V bottoms with the single volume bar like I showed but especially when it comes down
to Bottoms bottoms generally tend to trade differently than tops and this is the way
that I look for it again at least know there's exceptions but this is this is these are the
patterns I like to trade so Market's been coming down all right we've been down down down down down
down down down down down down down down all right awesome so we got that now what do we got down
here at the bottom notice that we get increased volume but the market doesn't cooperate away
so as opposed to before where okay we got a pretty green or pretty large green uh bar
there pretty big bars there again pretty big bars there uh quite a big bar there
but the gold dang Market doesn't go up anywhere it comes down it makes a lower high makes a lower low
it comes back up but all this volume is coming in as opposed to if you look over here
all right again at the beginning of the down move we we did have good volume
so but now this is where's our where's our Trend change that's the question where's the trend
change where's the uh now so here's the difference between tops and bottoms so let's move over here
a little bit and this is what I look for so when price comes down and we get big volume
what the professional Traders like to do at bottoms is accumulate
and so accumulation is called accumulation distribution you might have heard of it
before I'm sure some of you have in fact and so there's not any one volume by that was
ginormous like we saw before but we definitely have more than average volume coming in here
more than average volume coming in here more than average volume going here so what they're
doing is they're accumulating over a period of time here it's over more than a month actually
and why do they do this they do this because if they brought all their money in all their billions
of dollars right at one time again that demand would spike the price up and they don't want that
the reason they don't want that is because they got so got all darn much money to come in what a
problem to have right so much money to come in that they need to bring it in over a period of
time because if they again if they just brought it in at all one time the market would spike and
they would get filled at higher and higher and higher and higher prices as that initial
um volume spiked the market so they say no we don't want to give our position leave too
much and so they will accumulate through this period of time more than a couple of months
and we call this by the way this is part of the top dog trading rule of three so that's what I
look for one two three so three good you know again decent more than average volume but not
crazy spiked volume and now this is where a lot of people get uh confused and I know because I've
taught this and people have asked me if they say okay and then we go up from here and then our new
trend starts we get our Trend reversal but the feedback that I've received is but very hated
there's not a ton of volume here we're back down to you know average volume in this whole Zone here
how to say right because they already took their positions here and here and here
and that's exactly what they want and they don't want to show their hands
when actually the Market's gonna go up they want people to be discouraged down here oh you can try
to go up up didn't work try to go up up it didn't work try to go up nope didn't work and they're
bringing in accumulating positions and then they don't want to show their hand here and away to
the races that it goes now what's very important here to finish up is I mentioned that we had three
lows okay now the problem is how do you identify those three lows because it can be very subjective
so we I don't trade subjectively everything I do is mathematically based statistically based
rule-based on literal math and Math's pretty good that's pretty good I found that you know it's
accurate roughly 100 of the time so what I did was I created a market entry indicator that is
a mathematical formula happy to share it with you and in fact all my viewers get it for free just go
to indicatorwebinar.com and it's my market entry indicator I use for every single entry I take and
it will find these lows for you in an objective rule-based manner if you can find that low for you
in a mathematical formula so just go to indicator webinar.com pick it up um by the way for full
disclosure it is an indicator already in your chart you just have to modify we do not use it as
default form it doesn't function this way in its default form so so I modified it and customized
it for myself and now I'll share it with you so if you like these videos um please subscribe to
the channel that way you'll get more notifications you'll get obviously they're all free tutorials
happy to share them with you and subscribe to the channel and again oh just one last reminder
feel free to in the chat or in the comments below type in with your favorite um volume indicator is
and let's compare let's see what you got and what you like it'd be fun to see what everybody's using
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