Financial markets are controlled by organized, professional groups that own large amounts of money. These groups act in a coordinated manner, handle a lot of information, and are made up of market makers, strong hands, or great professionals.
Let’s discuss Volume
The clue that the professionals leave us is the Volume. Volume is money. Professionals handle a lot of money, and therefore substantial increases in Volume will mean an increase in professional activity. According to the market’s previous trend, we can learn if this increase in Volume is purchases or sales. It will determine the future evolution of the market. We will assume that professionals do not lose, with which we will have a great competitive advantage if we position ourselves in the same direction as them. Therefore, the chances of success of our investment will be very high.
Hence, if we know how to interpret the Volume, we can predict future market movements, either up or down. In the same way, we can analyze any market with Volume, be it stocks, indices, futures, commodities, or cryptocurrencies. We will be able to see where the professional has positioned themselves in the asset we are analyzing.
We will have to be followers of the professionals, and thus we will have a significant advantage when it comes to improving our results.
Financial markets have the same statistical character as the whole. They behave in the same way, in different time horizons. Therefore, we can see what we have seen in the daily chart in a 4-hour chart, an hourly chart, 15 minutes, 5 minutes, and even two and 1-minute charts. This will allow us to choose in which time horizon we want to operate, either intraday or several days. As in the case of the daily chart, the key will be the interpretation of the Volume.