| cial Technical Analysis Using Volume | | | | up, bottoming soon. |
| I wonder if you have realized this… | | | | Declining Price + Sudden Volume surge = Selling |
| All the data you get daily from the stock exchange in | | | | Climax, short term support level reached |
| financial technical analysis charts are nothing more | | | | Price at Peak + Sudden volume surge = Buying |
| than: | | | | Climax, resistance level reached |
| 1. Price | | | | Financial Technical Analysis of Head & Shoulder |
| 2. Volume | | | | Formation Using Volume |
| That’s right. Only the price and the number of | | | | The volume pattern for a head and shoulders top |
| transactions are known daily and captured as charts | | | | formation is very distinctive. |
| for financial technical analysis. Even though volume is | | | | On the left shoulder volume reaches a peak. As |
| such an important element, very few technical | | | | prices move up to the head, volume increases,but |
| traders make full use of it in helping them with their | | | | this second volume peak should be lower than that |
| trade entries and exit. This is because most technical | | | | of the left shoulder. This higher peak in price,yet |
| traders simply do not know how to make sense of | | | | lower peak in volume, is an important signal to the |
| the daily volume bars in relation to the price action. I | | | | trader that buying interest is far less ardent. |
| present here a simple chart explaining what the price | | | | Finally, as prices rally and form the right shoulder, |
| versus volume behavior stand for and hope it helps | | | | volume further diminishes. |
| you in making more sense in your financial technical | | | | Financial Technical Analysis Using Volume, Conclusion |
| analysis. | | | | I hope this simple explanation of what each |
| Financial Technical Analysis Using Volume Defined | | | | movement of price versus volume means in financial |
| Rising Price + Rising Volume = Healthy Bull trend | | | | technical analysis can help you, as a technical trader, |
| Rising Price + Declinging volume = Bull trend drying | | | | attain a higher level of accuracy when reading your |
| up, hitting ceiling soon | | | | charts and therefore a higher level of trading |
| Declining Price + Rising Volume = Healthy Bear Trend | | | | consistency. |
| Declining Price + Declining Volume = Bear tredn drying | | | | |