all right what's up guys are you ready
to learn how to read volume to get you
into the right trades with high
probability and super low risk well I'm
gonna take some time today to walk
through volume profile analysis to give
you guys an extreme edge over most other
traders in being able to read this
volume profile analysis I'm gonna show
you some very specific examples of how
to not only predict what type of
movement that you can expect but also
how to get the precision entry points in
these moves so stick with me guys and
we're going to talk about volume profile
analysis alright what's up guys it's
time to talk about a very important
topic which is volume profile analysis
alright volume is the most important
factor when day trading specifically
momentum trading why because this is
going to allow us to see high
probability trade setups that will
actually play out with magnitude right
if we're able to read the volume that's
coming in or not coming in into a stock
then we are able to have that high
predictability factor of whether or not
the stock is going to work and if it
does work we can then go on to further
judge what type of magnitude of the move
we can expect or you've probably heard
the same volume precedes price and this
couldn't be any more true especially in
momentum scenarios all right if you're
able to read the volume profiles as it's
coming into stocks you will be able to
identify the exact point in time when
the move is actually beginning and this
is going to also keep you out of those
trades that most likely aren't going to
move if a stock doesn't have an
identifiable volume profile you most
likely should it be paying much
attention to it
all right it takes volume to move price
if you don't have any identifiable
profile in volume of it coming in to a
stock or leaving a stock and you really
don't have any edge in predicting what
type of move to expect and then number
two you have no idea of if it even if it
moves what type
- the move can you expect but by being
able to read volume in the moments as
you're sizing up a trade and looking to
take an entry you will be able to have
that precision timing and also be able
to judge what type of move you can
expect you know from the actual momentum
move that takes place alright so again
this is gonna be one of my most
important factors to my trading I'm a
huge proponent of volume because I know
is its significance I know what to
expect when I see proper volume profiles
and this is some really great stuff that
you can take away today and using your
trading right away it's very simple you
just have to know what you're looking
for when in most cases I know when I've
started as a trader I just had volume
bars at the bottom of the screen because
it was there by default I never really
paid much attention to it and that's I
would just leave it there because it was
again by default on the chart and you
know definitely mean much to me you saw
these bars red bars green bars going up
and down and it never really meant much
I never paid much attention to it but
once I started to once I started to look
more closely at it and judge it against
the or compare it against the type of
moves that we were seeing I noticed that
there was a very identifiable pattern to
the moves that were making these these
huge range movements and if we were able
to pinpoint that in real time I was able
to have these these very highly
predictable moves with very low risk all
right and I want you guys to be able to
do that too so that's why I'm sharing
this with you today if you haven't done
any sort of researcher studying on
volume I highly encourage you to do so
to spend some time on the topic because
again this is what moves price you need
volume to move price that's a simple
fact and if you can become familiar with
the type of profiles that produce these
huge moves
you can be in front of them and you can
take advantage of it all right so let's
jump into it and talk about what we're
gonna learn here today so volume profile
analysis and high probability trade
selection so why is volume profile now
it's that's going to bring high
probability trade selection well as I
just said a minute ago if you're able to
identify the proper profiles that will
produce these big moves then you're
positioning yourself to trade high
probability trade setups because you can
predict what type of move will actually
occur and what also comes in hand in
hand with that is that if you have a
high probability trade selection that's
going to inherently reduce your risk
right now estate traders that really is
our number one goal from the outset is
to reduce our risk right the least risk
we can take on is the is what we want to
achieve all right so today we're gonna
talk about timing these precision price
breaks right and we're gonna talk about
confirming the trend with volume we're
also going to talk about trend
exhaustion which essentially was going
to lead to a price reversal these are
three critical factors to greatly
increase your trading probabilities and
and and actually they are the only three
possible scenarios on trading momentum I
think about that there's only three
scenarios right if you can have only
three scenarios when you're trading
momentum that makes your job a lot
easier as a day trader so if you're
looking for one of these three things to
confirm that you have a trade
opportunity then you've just eliminated
quite a bit of noise in your analysis
and trying to find a trade all right so
what I'm gonna do is I'm gonna teach you
guys how to identify each of these and
you will immediately have created an
edge that's gonna put you ahead of at
least 90% of the the retail traders that
are out there so again I'm going to
teach you each how to do this so when
you leave here today you'll be able to
implement this in your trading
immediately alright so again the three
things that we really want to pay
attention to and
which gives us high probability trade
selection by using the volume analysis
by reading those those different colored
bars at the bottom of your charts are
timing precision price breaks which is
your entry right entries everything
alright if you can't get in the stock
you're not gonna make any profits so
entry is everything you can time those
precision price breaks with volume you
are well ahead of the game
next thing once you get your entry is
confirming the trend all right do you
have volume coming into the trend or do
you have volume lacking as the trend is
moving that's gonna tell you you know
what type of move you can expect are you
gonna get a move with some huge
magnitude or is this move gonna sort of
just you know kind of not really
continue to go all right so it's
important to see volume when you're in a
trend alright and the last item here is
something that can be used both to enter
a trade as well as to exit a trade
alright and those are going to be trend
exhaustion so let's say you're in a
trend and you need to know when to exit
or fully exit your position well we can
use volume to tell us when that's the
case all right trend exhaustion that
when the trend has ended and then price
reversals so trying to exhaustion price
reversal is essentially the same thing
but if we're talking about trading a
reversal than price reversal is what
you'd be focusing on and something we're
going to talk about here is volume
bottoms and volume tops is volume
occurring at the lower the high of the
day is this going to signal a point that
the trend is not only exhausted but you
can expect a sizable reversal alright so
these three things are really important
you can use them in multiple different
rate ways doesn't mean you have to trade
reversals it just means that you can
identify the end of a trend all right so
all important stuff and volume is at the
root of all of it so again knowing how
to analyze and implement that that skill
of volume analysis is going to be really
important to your success as a as a
momentum trader
okay so the traders edge now I want to
spend some time on this because it's
really important in that you understand
that you have to have an edge as a
trader all right whatever strategy it is
if your swing trading if you are
momentum trading scalping if you're
trading reversals options whatever
whatever it may be you need to have an
edge so I always like to spend just a
moment or two on this topic because it
really makes you go back take a step
back and think about what's your edge
right do you have some sort of edge and
if you can't answer that question then
you really do need to take a step back
and figure out and understand spend some
time trying to get to what your edge is
is it scalping quick bursts of momentum
is it buying and holding is it riding a
trend all day long is it is it trading a
range right what is your edge you have
to know what you're best at so that you
can exploit that talent and grow grow
beyond that all right so the trader
trader says edge a trading edge is
defined as a refined approach or the
ability to identify and act upon a
specific entry and exit points will
allow for an overall positive outcome
over time okay so think about it from a
mathematical standpoint it's a
statistically positive outcome is
essentially the goal so without an
approach that satisfies that requirement
nothing else matters and all this is
saying is that if you don't have your
go-to strategy or go to setup then you
probably don't have an edge anywhere if
you're just looking for things are
moving and trading it because it's
moving or trading because it's coming up
on a scan there's no edge to that right
for instance my edge for an example is
being able to read this volume profile
analysis and precision entry so I know
that I have an edge in reading this
volume profile analysis and pinpointing
the entry at the beginning of a big move
okay and that's going to be really
important because the
being able to read that volume and
getting that precision entry is going to
reduce my risk and also give me high
probability trade setups that turn into
big range movers so I know if I ask
myself the question what's my edge well
I can read volume really good and I can
read proper entry points really good so
if I take those two and couple them
together and and again utilize them into
stocks that have momentum I'm going to
put myself in a very very good position
a low-risk position to be consistently
profitable so one thing I want you guys
to do is to ask yourself what is your
edge and how can you improve on it by
utilizing the volume profile analysis
because everyone can utilize volume
profile analysis again does it matter if
your swing trading options trading you
have to look at the underlying thing
that you're trading which is there gonna
be a stock most of the time and you need
to be able to read the volume because it
tells a story right so if you're able to
reval um-- it's going to make your edge
that much better alright so moving on
now this is something that I put in here
because I want you guys to have this
very clearly at the forefront of your
mind is that volume is the most
important factor in identifying price
movement so make sure you understand
that in that volume is the most
important factor in identifying price
movement why because volume precedes
price okay volume is needed to make a
stock move think about it if you have a
stock that opens up the at the opening
belt if there's no volume that's traded
the stock can't move right it takes
people buying and selling it takes
people buying and selling to move a
price and create volume which moves
price so that is is something you have
to understand that's that's that's
stripping it down to the most the most
basic
the most basic thing in order to
understand volume right if there's no
one buying or selling there's no volume
so there's not gonna be any movement
okay so you have to understand that the
most basic principle in order to
understand why volume is important it's
the more volume you have coming into a
stock the more likely it is to move now
a step further the more volume coming in
that's in an orderly fashion then that
is going to produce highly probable
moves all right so if we can put that
all together you're starting to get to a
point where you're creating a big edge
here and that's something that will go a
long way and helping you identify these
these big moves okay so what is volume
and volume analysis so as you guys you
know familiar with a volume is going to
represent the number of shares or
contracts that have been traded over a
given time period traders will rely on
volume as a key metric to gain insight
into several important factors including
the immediate liquidity of an asset and
to measure the potential of impending
move okay so understand that when when
traders for hedge funds or banks or
whatever it is they're looking at volume
why because they're typically going to
move large positions so if a stock
doesn't have a lot of volume then they
can't move in and out of a stock right
so if there is volume they can move in
and out and by them moving in and out
that's going to add to the movement of a
stock okay so key metric key metric and
if you have that volume and liquidity
you can also use it as a risk control
does it have a lot of volume is it
liquid that means you can probably take
a bigger position and have the same
amount of risk as if the stock has lower
volume or I'm sorry if the stock has
higher volume you can take a bigger
position right it's gonna be the same
amount of risk okay so think about it
trading something like Bank of America
that has a lot of volume doesn't really
matter what day it is you can trade a
pretty big position on that and never
really be in too much of a risk scenario
because you can exit the trade instantly
all right and be filled now
another stock that does it how much
volume then that becomes a much more
difficult situation because one big
order could drop the stock you know 30
40 50 cents a percentage point or more
I seen it happen I seen it how I see it
happen all the time so you need
liquidity in order to reduce your risk
which again is created by volume so know
that volume is that key metric the -
what a lot of traders use to analyze the
trade
okay so volume analysis this is an
advanced technical trading approach that
involves the careful analysis of volume
trends and profiles in conjunction with
price movements to determine the
significance of the changes in a
securities price so again this is just
reiterating what we talked about about
how you can use the volume profiles - in
volume analysis to determine the
significance of a move and how big that
move is going to be all right so volume
precedes price guys follow the volume if
you follow the volume you're going to be
ahead of again 90% or more of the
traders out there that don't pay
attention to the volume
all right so volume is the only volume
is the only indicator that is needed to
accurately predict price movement and in
turn price momentum so what this means
is that you know price movement is going
to be determined but it's a type of
volume that's coming in so you can
predict price movement accurately or
most accurately with volume now all of
the indicators out there all your moving
averages all of your oscillators and
whatnot they are based off a price
action and volume alright so all they're
doing is tracking the volume in the
price action so if you can read volume
in price action you will be ahead of all
the indicators there's no need to have
those indicators alright so again by
being able to do this volume analysis it
really solves a lot of the problems and
helps bring a lot of clarity to your
trading because again all those
indicators and-and-and oscillators and
moving averages and whatnot they are
tracking volume and price that's simply
all that they're doing so you can read
volume
you will be ahead of those which means
you don't need that alright
volume is a function of herd mentality
which means that as the volume increases
at key price points so will the
magnitude of the move or in other words
the beginning of a trend so if you can
track how this volume is is tracking
into a stock you can identify when the
move is starting and then how much to
expect from the actual move that takes
place so again remember follow the
volume alright now we're gonna start
jumping in a few examples here I want to
show you guys basically what we just
talked about and put it into context
right show you some examples that we
have have traded we see this every day
in the stocks that we're trading that
have momentum so take a look at this
this is a chart of Twitter you'll see
that you have the yellow triangle there
which is going to show you a pullback
right you get the first big move up
right you get the first big move up
right here so you get this first big
move up and then you get this pullback
that happens okay so the pullback
happens but look what happens to the
volume all right look at the bottom of
the chart you can see that the first
volume bar goes straight up right it's a
big increase in volume and then look
what happens over the time at the
pullback takes place the volume is
decreasing okay so what is that telling
you logically well if the volume is
decreasing on a pullback that means the
sellers right because you're pulling
back the sellers are less than the
buyers so you can see the pullback in
volume relative to the initial spike in
volume again what's that telling you
that the sellers are less than the
buyers so an orderly decline in in price
in conjunction with a decline in volume
is going to tell you that this stock has
momentum and it is likely that it will
try to continue once the consolidation
period or pullback has been complete
okay so look what happens once you get
to pull back to the view app the view
app is the dotted at the - white line is
remember I really don't use any analytic
indicators because I can read volume in
price my edge I can Reval you the price
on the head of those indicators okay so
as you can see here look what
happens as the price starts to break
back up out of that pullback point
essentially a flag alright essentially a
flag breaks back up out of that point
and look what happens to the volume look
what happens to the volume as you start
to come up out of this pullback low
volume consolidation okay you get a
volume spike
alright down here you get a volume spike
that is much much larger than the
pullback volume or the declining volume
so that's your entry as you start to
break up and you can see what type of
move that you get get the breakout okay
and that's how we identify our precision
entry points if we get that volume
profile that we want and it lines up
with an entry point then that gives us a
higher confirmation and again remember
higher predictability higher
predictability leads to lower risk
alright so you've got everything that
you want here you've got the initial
spike up you've got the pullback on on
the planning volume and then you've got
the resolution as it breaks up and the
volume starts to pour in as you can see
the volume spike and that moves the
price now shortly thereafter you can see
it happens again on a little bit smaller
scale but you get it you get a pullback
right you get a pullback or a
consolidation point look what happens to
the volume down here alright you can see
the volume declines through this
pullback
alright the volume declines through the
pullback and then once you start to
break back up out of that the volume
starts to increase again volume starts
to increase again down here you can see
that volume is decreasing through the
pullback starts to increase as you come
back out of that alright now that's how
you can identify the right point in time
for an entry
alright this can be used on any
timeframe chart
one minute five minute I tend to use it
on either the woman at or the 5 min if
I'm trading heavy momentum out of the
gate
probably gonna be the one if I'm trading
a little bit further after that 15
minutes in or thirty minutes in I'll be
switching to the five minute to look for
the volume profiles alright so that is a
good example of what to look for for
volume profile and how you can utilize
it to again predict the proper entry and
to predict
to move that you can expect okay now
here is the other topic that we talked
about trend exhaustion or price reversal
okay so how do you know when to finally
exit a trade or when the the trend is
gonna be over with well if you look here
this is a stock that really really sold
off pretty hard you get a big level of
support down in through here and then
what happened was is look at the volume
look at the volume ramp as the stock was
so much there's a couple takeaways from
this that I want to talk about here one
that's gonna confirm trend volume is
confirming trend here so as you can see
once the stock started selling off this
was a news play you can see the stock
started selling off here and what was
going on was the volume kept increasing
into the move so as long as your volume
is increasing into the move then you can
expect the move to continue right it's
confirming trend number we talked about
the three possible scenarios at the
beginning one was confirming trend one
was price reversals or a trend
exhaustion and the other one was
precision entry okay this-this-this
talks about two of them the first one is
conforming trend why because the volume
is continuing to increase as the trend
is going volume is increasing as the
trend is going okay so look what happens
once you get into a support point now
all of a sudden the volume starts to
drop it starts to go back the other way
so the profile starts to decrease the
profile changes the volume profile
starts to Train change it now starts to
stop and decrease okay so that was
telling me that there's a new volume
ramp into a pivot or a price point
doesn't have to be a pin support point
there but in this case there was and the
volume started to stop alright it
started to decline so if you see that
you're at a you've made a huge move and
the volume now is starting to subside
it's probably likely that the trend has
been exhausted and a reversal point is
is near alright and that's what you can
see right here is that says what's that
what
had happened all right and then you get
the decline in volume because the trend
has now been exhausted and you could
even take this as a reversal point
because the volume has stopped to the
sell side and it started to actually
decrease so there's not much sellers as
they are present and you get the
reversal so this is all all you need to
know about this is the profile the
volume ramp the big volume ramp and then
it starts to change profiles or to go
back down so that's telling you again
that the trend is subsided and it's
probably time for the trend to stop or
possibly reverse and for those of you
that are reversal traders this is a very
important volume profile to recognize
when you're trying to trade reversals on
momentum like this all right so a good
example of one confirming the trend with
increasing volume and to how to identify
trend exhaustion when volume starts to
subside after a big move
all right or a reversal point okay so
that is a really important lesson there
to notice how to confirm the trend
all right so ten-second another one this
is another stock that we traded recently
a good example of again volume profilers
into the short side
alright short side now which you can see
here on the open you get a hard move
down and you start to have a little bit
of a pullback in through here your back
up against the V web you kind of sit
sideways here for a few minutes but look
what happens to the volume profile at
the bottom you're decreasing right so as
you're pulling back buying because we're
this is a stock that's selling so a
pullback here is people actually buying
the stock so it's pulling back to view
app but look what's happening to the
volume the volume is decreasing overall
so that's tell me that the buyers are
still less than the sellers so if the
buyers are less than the sellers and I
want to watch this for an entry because
it's likely the sellers are gonna
resurface alright so you get back to
view AB kind of consolidate sideways
here and then look how low the volume
gets I think at that yellow the yellow
rectangle at the bottom of the volume
look house look how low that volume gets
as you're just oscillating around V web
you create this little consolidation
point and then look you start to break
down through that and look at the volume
spike look at the ready
down here all right look at the volume
spike and then look what happens as you
take out that consolidation point you
get the volume spike okay you get the
voice by cat's gonna confirm one
precision entry that's gonna confirm the
precision entry because you've got the
break and you've got volume to confirm
the break and you've also got the volume
profile prior to that confirming that
this is a stock that has potential to
continue and then look what happens as
you start to sell as this as it starts
to make the move look what happens to
the volume again that volume changes
profile starts to increase again the
selling is is higher than the buying was
in the pullback so as you're selling
into a trend here you can see that the
volume is increasing which again what is
that doing it's confirming the trend
really important to confirm the trend
and look what happens at the very bottom
of the trend but what happens the very
bottom train you get this volume spike
right here you'll see in a second when
that volume spikes and then it just
completely drops off drops off after
that spike alright big volume spike on
the 5-minute the volume drops off and
look what happens the trend is over with
it stops and the price reverses somewhat
and then it just kind of drift sideways
but you can see that you got the big
volume spike on the 5-minute at the
bottom and then all of a sudden
thereafter the volume just dies off so
it's gonna tell you that the sellers are
now gone and the trend is exhausted and
could be a potential point for reversal
so again reading volume it's gonna be
able to tell you when the right point is
to fully exit the trade or look for a
reversal okay let's look at another one
really nice orderly pullback here in
volume profile example you can see that
this stock is on a 5-minute chart so
what because we're after 10 o'clock
remember when I'm after 10 o'clock I'm
switching to a 5-minute chart so you can
see here you get a nice really
identifiable ramp up look at the volume
ramp at the bottom of the chart alright
look at this volume ramp here really
orderly higher volume on each bar that's
what you want to see so what is that
telling you again
alright that's telling you that you're
confirming trend right confirming trend
you've got higher volume volumes
increasing into the moon
that means you can expect a move of some
magnitude alright so here's your first
pullback look what happens to the volume
on the pullback volume completely drops
almost down to nothing completely drops
that tell that's telling me that there's
virtually no sellers present here so I
can very likely expect to see a
continuation move try the volume just
completely dies and then look here as
you start to consolidate through this
pull back through the 15 minutes here
you then start to round back out you
start to move back higher and look what
happens as you round back out look what
the volume does its spikes volume spikes
back up right spikes back up relative to
the low volume selling that was here it
spikes back up that correlates with the
move back higher after the consolidation
you're back in this trade to the long
side and then look what happens
I look what happens you get the increase
in volume as you start to move higher
and that thing just continues to go for
several points to the upside and you can
see here that you know over this move
the volume does start to decrease a
little bit so as you start to get higher
up the volume does start to subside and
that's as you start to see that occur
that's a point in time where you want to
think about trimming your position
okay so trimming your position as the
volume is decreasing because this move
once it does spike and once it has the
initial increase to start going you do
start to see a decrease in volume here
as you start to push higher when you
have that divergence a simply a point in
time where you want to think about
scaling some of your trade and you can
see there after it did make a decent
drop or a decent pull once that
divergence caught up but you can see
that as it starts to move after the
initial spike here on the volume that
the price and volume does start to
diverge and that's that's another signal
that you would want to start closing a
portion of the trade alright but again a
really good example of increasing volume
to confirm the trend it means you want
to stay in this low vol you pull back
relative to the ramp and then you get
the volume spike on the resolution again
precision entry times
exactly when they get in okay exactly
when to get in all right so I show you
examples at work and I want to show you
examples that that don't work or that
you can avoid by trading stocks that are
don't have the proper volume profile
it's really important you understand
both sides of this because if you pay
attention to it you can avoid these
types of mishaps all right so here's a
stock gapping higher you are increasing
here on price right you're moving higher
but what have you seen in every stock
that we've looked at that is held to
move and had continuation it has
actually continued all right what we've
seen is that the move is confirmed right
we talked about confirming trend is one
of the key points of volume analysis
well look at the trend here the trend is
higher and the volume is not the volume
is decreasing as you are moving higher
in price what is this called we just
talked about it's called a divergence if
a divergence is present you need to be
on high alert or be very careful and
cautious about taking the trade so when
I solve this trade moving it looked
decent we were gapping higher we're
above the daily moving averages and we
had room to move but when I saw the move
was going and I saw that the volume was
decreasing into the move I said I'm not
taking this because it's very unlikely
we're gonna see continuation the buyers
are kind of skittish they're not really
ramping this thing higher so I'm gonna
move on and not really look at taking
this trade and look what happens you get
an okay consolidation you get a pull
back a little bit of a pullback here and
it's just kind of sitting sideways right
on the view app but then look what
happens instead of a volume spike to the
upside or agreeing a buyer volume spike
you get a cell volume spike alright cell
volume spike here it gets crushed
okay gets crushed and the stock sells
and again this is a volume surge into a
sell signal so it's essentially a sell
signal here and then the trend starts to
take off to the downside so what we're
looking at here is a failed breakout -
due to lack of volume remember what I
said that volume precedes price if you
don't have volume coming into a move or
volume prior to -
move establishing itself you're gonna
have failed moves or you're not gonna
see any move at all this is exactly how
that works so decreasing volume into a
move you can pretty much expect that
you're not gonna really have much of a
move if there is a move or the moves
just gonna fail all together like this
one did so again if you're paying
attention to the volume it'll keep you
out of these trades might be wondering
well I keep seeing these trades that
have good setups and they're pulling
back and they've got good consolidation
but I can't seem to get them to continue
or they're failing well I could pretty
much bet on it that if you go back and
look at those trays on the volume on a
volume profile from a volume profile
standpoint they're probably pretty poor
or they don't have the proper bowing
profile to support a continuation move
all right so just by watching this stuff
in real time it's really going to help
you identify the right points in time to
take the trade or or not alright so
that's that's volume profile analysis
alright so I hope this helped all of you
guys definitely leave some comments
below or questions we always answer all
of them I'm happy to help you guys
understand this with more clarity but
again utilize this stuff in your trading
especially if your momentum trading it
definitely really changed that my
outlook on what I'm gonna actually be
trading as opposed to not looking at it
so definitely take some time you know
watch the volume play out in real time
and see how the moves actually follow so
thanks for watching guys and we'll be
back with you real soon hey everyone
thanks for watching the videos I'll
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