Analyzing volume as a strategy for trading futures


Hi! I'm new here, but I trade futures using volume for more than 6 years. I want to share with you my experience and some thoughts.So, to my mind, volume is the primary source, the engine of market. Market movement determines its volume.

As you know,volume is the number of shares or contracts purchased or sold for a certain period of time at a specified price.

I think that "blindly" trading remains in the past. After all, big money players do not lose. Do not lose money either insiders or major investors. They definitely know where market will move. Ability to correctly understand accumulated volumes and to see large positions is the key to success trade.

One of the most effective ways of trading on exchange is trading futures contracts on the basis of data volumes of pre-committed transactions, or the so-called trade volumes.

From a technical point of view, futures trading does not
differs from forex trading. The advantage of trading volumes
is primarily to obtain information on the levels of inputs with
accuracy of 5-15 points (depending on the traded futures
contract). In other words, when trader opens the position,he has the
opportunity to expose the level of stop-loss not by 20-30 points as it happens with traditional methods of forex trading, but only by 5-15 points!
The breaking of a stop like this clearly illustrates the wrong choice direction. The level of objectives (TP) in this type of trade - 50-100 points.
Thus, the ratio of "profit / loss' of 3 / 1 - 5 / 1,provides a substantial profit, even with equal respect profitable and unprofitable trades.

The technique consists in finding the price levels at which were
committed the maximum number of transactions for different time periods. For the lifetime of the futures contract: month, week and day before.

These levels are in the course of trading support and resistance levels.Price at the approach to such a strong level, as a rule, as it rebounds for at least 30-50 points (or much more, that’s changes
local trend), or breaking through this level, will return to it and bounce off in the opposite direction. Of course, the best approach when trading volume implies a clear definition of trends’ areas which helps to minimize unprofitable transactions.
What do you think about all this?
Originally posted by lina
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What do you think about all this?


I'll be completely honest with you: First of all, it looks like the preamble to a sales pitch for a trading course. The theory that you have expounded is in daily use by the traders in the ES Short Term trading topics such as today's here:
http://www.mypivots.com/board/topic/6152/1/es-short-term-trading-10-7-10

There's only one way to gain respect on this forum: Explain a trade setup before you take the trade.