Volume Price Analysis

[oxidizedguy 0]

Hello Everyone,

I am reaching out because I would like to know and learn how to read, interpret and analyze Volume Price as well as Supply And Demand. I don't know how to read a chart to determine when to get in and out of a play. Or how I can get the fear out of me. I don't know how to time my entries and exits. I always get in too late or out too early. 

I need help period lol

[Martin D 27]

Hey,

Ok it's a pretty big topic so can't do it any real justice in a forum post but let me try give you a start.

In terms of some materials, Thor touches a little in his book and is just a good book for understanding the market in general, basically a lot of the stuff he teaches here if you like his pivot style of trading. Anna Coulling book "a complete guide to volume price analysis" is also excellent for volume/price analysis in isolation. Jim Dalton also talks about the whole principal of that style of trading, those are also excellent and widely recommended here.

There are a number of Youtube people who also talk about the subject a lot but a lot of the main volume profile traders on it trade futures. Korbs, Tradepro academy are some I watch and cover volume profile specifically. Also some of the interview style channels like chat with traders or B the Trader have volume profile traders on there sometimes.

Basically all supply and demand is, is where are buyers buying and where are they selling (and short sellers selling and buying back). What do their positions currently look like, did they already profit take? will they step in and buy more? will it pass through their buying area and they get stopped out? It's just areas where a lot of volume has taken place recently and so will probably do so again as traders have to make decisions.

In volume profile the high volume areas you'll expect choppy price action because that's where fair price has been established and buyers and sellers are happy to trade at the price so is where positions get built. Once we are done in the range bound a traverse to the next area will take place through the low volume area as it is not a fair price for buyers or sellers (on an up move too expensive for big buyers and not high enough for short sellers to step in). An upcoming low volume area will pause price and we will trade/range in a high volume area immediately prior (and either get ready for the next push or big players profit take and opposite side steps in and we'll reverse), alternatively we'll pullback to get the momentum to push through the low volume area. Given this you therefore need to have strategies about how you will trade the exit from range bound markets and avoid (or trade) false breakouts.

It is also worth noting that DAS doesn't calculate volume profile correctly (and refused to fix it when I asked them). Basically they put all the volume at the close of the candle so if you're looking at a daily chart for example the entirety of the days volume is at the closing price of the day rather than where the volume was actually traded. As far is DAS is concerned I therefore look at the prior day on a 1 minute chart (as accurate as you can get DAS to be) or you need to use an alternative source such as bookmap. I will ultimately leave DAS because of it, just need to get time to deal with a new platform.