Trading on Volume: The Key to Identifying and Profiting from Stock Price Reversals
ALL ABOUT VOLUME­­Today's Most Valuable, but Often Overlooked, Indicator of Market DirectionIn today's tumultuous markets, driven more by emotion than fact, trading volume tells an important story of crowd psychology, fear, and greed­­and their impact on prices. While other traders search elsewhere for answers, and while most academics believe prices move randomly, those who truly understand what volume says about future price movement find they have a reliable weapon in their trading arsenal.Trading on Volumeuses historical facts and data to confirm the power of volume in forecasting price action, then explains how to seamlessly incorporate volume analysis into your day-to-day trading program. Exhaustively researched and substantiated, it provides hands-on information for understanding and using:Volume spikes and crescendos, and the price movements they consistently precedeThe psychology of trading volume; in essence, why crowds act the way they doHow mutual fund money flows can reflect market opinions on specific industry groupsTrading volume causes stock prices to rise and fall; it's as simple and complicated as that. Find out the secrets volume has to tell you, and the strategies you can use to make volume a vital and profitable component of your trading program, in the insightful and practicalTrading on Volume."Volume is the cause; price, the effect...."Technical researchers and traders tend to focus almost exclusively on price action. Fundamental traders, on the other hand, rely on company and stock valuation. Yet it is tradingvolumethat is as important, if not more important, in understanding and forecasting price movements­­even though it is consistently ignored by all but a few knowledgeable individuals.Trading on Volumeexplains how changes in volume can actually disclose the amount and type of interest in a stock and help you determine where the price is going next. More than just a superficial treatment, it is a comprehensive study and analysis of behavioral finance as it relates to trading volume, conventional views on volume from TRIN and tick to Up/Down Volume/Price combinations, and innovative techniques for understanding volume and using it to your advantage in virtually any market environment.Volume data holds a rich body of practical information. LetTrading on Volumeshow you how to uncover and use that information to achieve better buy and sell prices, as you exercise greater control over the inherent risks involved in trading. Topics covered include:Indicators for understanding if lower volume is bullish or bearish, and whyHow to use intraday trading statistics to compute where pressure is coming from, and when and how sharply it might be changingTechniques to dissect the aftermath of a volume-spike day and gauge the behavior of late-coming participantsWays to judge when a downside spike might accurately reflect long-term reality­­or instead represents a long-term buying opportunityBeyond the many difficult-to-measure factors in today's fast-moving markets, it is simple supply and demand that drive stock prices.Trading on Volumeshows you how to use that one unarguable fact to your advantage. Regardless of your overall technique or strategy, it will supply you with the knowledge you need to pinpoint the rise, climax, and fall of the activity of market participants, then use that knowledge to buy near market bottoms and sell near tops with unprecedented consistency and accuracy.