Here is a trade I took on NQ today. It was one daily spread Nadex contract that netted me around $54.
Here is the entry:
Here is the exit
I have recently added the expected volume (v 8) indicator to my chart and am trying to use it to help me make more informed entries. In the screenshot below I have marked areas of increasing volume in green boxes, and lowering or lowered volume in red boxes. During the time I took my trade it seemed that the rising volume correlated with the market trying to go up, while lowering volume correlated with the market going down.
I know I was trading into the current low, marked by the dotted red line (using the CurrentDayOHL indicator). It seems in this instance that the increasing volume was correlating with resistance to the market breaking through that low. When the volume would drop, the market would drop a little more, lowering the current low.
I don’t know what the above means, or how to use this volume data to help me make more informed decisions about when to enter or exit a trade. Anyone have any feedback as to how to use this Expected Volume indicator data to those ends?
Here is a follow up to the question above. This is from a different trade today. I am trying to figure out how to use volume data to inform my trading decisions. I’m not really understanding it. Here is a screen shot from a recent short I was in. You can see that when NQ was moving to make a even lower low, the volume was dropping. I would think it would be the other way around:
Volume is basically just the number of contracts traded at any given time. So whilst price may be falling, volume may be rising or falling depending on how traders/investors view the instrument in question. That would then impact how many contracts are changing hands and therefore volume. So price and volume may not always be linked quite in the manner you’re thinking.
What volume can do is give you an ‘idea’ of the likelihood of a price movement continuing or stalling out. Can lend weight to a certain price level being broken or remaining as support/resistance. So in your second image volume was increasing towards the blue Ice level but dropped off roughly in that area and the settlement level suggesting the possibility of chop (to me).
Hope that helps a little bit and I’m sure if Darrell or someone else with more experience than me spots an error in my comments they’ll put us both on the right path.
