Combining "Volumetric" and technical analysis"

Each trader has his own trading tactics and trading system. Foreign colleagues, most often Americans, use basic indicators in futures trading, the analysis of which is combined with the analysis of trading volume data. This method is most commonly used for futures trading. Let's see how it can be applied.

Let's take the graph as an example Gold (GC - Comex). Many people use the "equidistant channel" to analyze the market to determine the trend as well as profitable entry points into the market. Figure 1 marks the place where most people would decide to buy this futures.

But why keep track of volume data when everything is already clear? The Americans have been watching them for more than 20 years, and for them it is a familiar part of the job. Volumes clearly show the interest in the price and, knowing its quantitative value, it is possible to predict the situation on the market with greater probability.

Let's take a closer look at this place, in the form of a cluster chart, using the Volume Researcher plug-in in the Ninja Trader terminal (see Fig. 2).

Touching the line of the "equidistant channel" was accompanied by a strong volume discharge at 1147.1, 1147, 1147.3 prices - This suggests that this price range is very important and in demand. If this range were not interesting to the players, the volume in this area would be weak and the market would just break through this "equidistant channel".

The next step is to enter the market. It is desirable to enter above this range, as it is for us the level of support. A stop order should be placed just below this level - it is like a "Protection" for us. In most situations, if the market breaks this level, the fall continues further. Thus, we significantly reduce the position StopLossand, therefore, reduce our risks (see Fig. 3).

It should be noted that there are many such situations on the market. In most cases they work out perfectly. Therefore it is recommended to study and use this method in trading.