The Trader's Book of Volume: The Definitive Guide to Volume Trading: The Definitive Guide to Volume Trading: The Definitive Guide to Volume Trading - Hardcover

LEIBOVIT

Hardcover

ISBN 10: 0071753753 ISBN 13: 9780071753753

Verlag: McGraw Hill, 2011

Inhaltsangabe

Learn how to translate the "language" of volume! Mark Leibovit, a leading market strategist and technical analyst with more than 35 years of trading experience, possesses a solid track record of predicting important movements in the financial market-including Black Monday of 1987, the bear markets of 2000 and 2008, and the "flash crash" of May 2010. Now, with The Trader's Book of Volume, his secrets are yours! Focusing exclusively on volume technical analysis, The Trader's Book of Volume describes the basics of volume, explains how to use it to identify and assess the strength of trade-worthy trends, and provides in-depth techniques and strategies for trading volume indicators for profit. With more than 400 charts and graphs, The Trader's Book of Volume also exhaustively illustrates how readers can profit from a wide array of volume indicators, including: Broad Market Volume Indicators-Cumulative Volume Index, ARMS Index, Upside-Downside Volume, Nasdaq/ NYSE Volume Ratio, Yo-Yo Indicator Volume Indicators-Accumulation/ Distribution, Intraday Intensity, Negative Volume Index, On-Balance Volume, Open Interest Volume Oscillators-Klinger Oscillator, Chaikin Money Flow, Ease of Movement, Volume Oscillator Leibovit Volume Reversal Indicator(TM), the author's proprietary methodology Under the author's expert guidance, you can seamlessly incorporate Volume Analysis into your day-to-day trading program. Without a proper approach to Volume Analysis, Leibovit asserts, you're essentially trading in the "land of the blind." Use The Trader's Book of Volume to gain the clearest view possible of market trends and react to them with the confidence and smarts for consistent trading success-and avoid every market crash the future holds.

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Über die Autorin bzw. den Autor

Mark Leibovit was a member of the Chicago Board Options Exchange, a former -Elf - on Louis Rukeyser's Wall Street Week television program, and a frequent guest on PBS Market Monitor's The Nightly Business Report. He developed the Volume Reversal Indicator and newsletter in 1979, the latter evolving into the popular Web site VRTrader.com, where he currently serves as Chief Market Strategist. Timer Digest named Leibovit the number-two Market Timer and the number-two Gold Timer for the ten-year period ending in December 2009.

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Volume does more than measure the number of shares changing hands between market participants. When you learn to interpret volume into trading signals, you can read the mood of the market, discover great new trading strategies, and put price changes into context.

Providing an abundance of facts and data to confirm the power of volume in forecasting price action, The Trader's Book of Volume arms you with volume-based techniques and strategies for:

• Assessing the strength of trends
• Identifying volume patterns that signal trend reversals
• Selecting the right indicators, oscillators, and time frames
• Detecting trends across broad markets
• Developing Tactical Volume Overlays for timing andshort-term trading

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THE TRADER'S BOOK OF VOLUME

The Definitive Guide to Volume Trading

By Mark Leibovit

The McGraw-Hill Companies, Inc.

Copyright © 2011 Mark Leibovit
All rights reserved.

ISBN: 978-0-07-175375-3

Contents

Foreword by Greg Morris
Acknowledgments
Introduction
PART 1 THE IMPORTANCE OF VOLUME IN TECHNICAL ANALYSIS AND HOW BASIC VOLUME 
ANALYSIS WORKS
Chapter 1 Volume Basics: A Trader's View
Chapter 2 The Trader's Mantra: Volume Precedes Price
Chapter 3 Navigating the Volume Trading Terrain
Chapter 4 Spotting Volume/Price Patterns and Market Trends
Chapter 5 The Volume Alert: Identifying Trend Reversal Patterns
Chapter 6 News, Noise, and Volume
Chapter 7 Trading Time Frames and Indicator Selection
PART 2 VOLUME-BASED INDICATORS, OSCILLATORS, AND TACTICAL VOLUME OVERLAYS
Chapter 8 Broad Market Volume Indicators and Oscillators
Chapter 9 The Volume Indicators
Chapter 10 The Volume Oscillators
Chapter 11 Developing Tactical Volume Overlays
Conclusion Keeping a Trader's Eye on Volume
Sources
Index

Excerpt

CHAPTER 1

VOLUME BASICS: A TRADER'S VIEW

Is it volume which causes price changes, or do price changes causevolume—the hen or the egg, which came first?

—H. M. Gartley, Profits in the Stock Market

Back in 1934, R. W. Schabacker commented in Stock Market Profits, his300-page treatise on trading: "In our entire study of Plate V we have given noconsideration to the factor of volume of trading, though this is another highlyimportant and valuable angle of the technical approach to short-swing trading."

Having recognized the value of volume, he spent only three paragraphs discussingthis highly important and valuable tool. Why was so little consideration givento volume? One explanation is that the data required for Volume Analysis werelargely unavailable at the time and reserved only for the eyes of an elite groupof market participants, an "insiders' club" comprising floor traders, marketmakers, and institutions.

Today, with the development of sophisticated desktop trading interfaces alongwith more readily available market data, traders can access information that waspreviously in the exclusive realm of insiders. This more accessible data flowhas opened the door into the realm of Volume Analysis and the strategicdeployment of volume-based indicators, oscillators, and overlays to enhancetrading performance.

In this chapter, we challenge you to rethink any preconceived notions of priceand volume as they relate to your trading strategy and offer you a short primeron the basics of volume.

The Case for Volume

Volume Analysis provides a trader with a clear and focused view of thecollective behavior of financial market participants. Overwhelmingly, we tradershave been indoctrinated with price-based indicators, but what if what is lyingunder the hood staring us in the face has eluded us? What if, at the end of theday, the behavior revealed by volume is the high-octane fuel that creates,accelerates, or decelerates market conditions?

We've been told that market trends are created by market participants agreeingin aggregate that a fair price for a stock or commodity can be found and thatprice moves accordingly to higher or lower levels. In Volume Analysis, we viewthe development of market trends as a dynamic process that cannot simply beexplained based upon price movement alone. Our standard for identifying andpredicting trend changes incorporates the volume action accompanying these pricemovements. Throughout our exploration of volume, our guiding principle willremain arguably simple.

Volume Action Is Linked to Price Movement

Most traders have a minimal understanding that a price move accompanied bystrong or heavy volume is likely to continue in its current direction, and,conversely, if volume is lighter than "normal," the trend may be suspect. Theseconcepts are about as in-depth an understanding as most traders will everdevelop about volume. So what of the behavior of volume in technical chartpatterns, in trend continuation and reversals, and in volume overlays?

It is our belief that volume is an essential component of every price move andpattern. If a trader is unable to read or translate volume information, if hisunderstanding of it remains limited, then he is forced into the tradingstrategies and routine guidance more commonly serving the interests of theinstitutional crowd. By taking our trading off-road and examining thecomplexities of volume, we are taking a detour from trading based on price-drivendata alone. It is our hope that as you explore the pages of this book onvolume, you will gain predictive insight into trend direction and reversals andultimately develop your own set of defensive tactical strategies.

A Dynamic Volume Analogy

There are many analogies to describe the dynamic effects of volume on pricetrends. Most commonly, it is compared to fuel in a car engine. If the tank islow on gas (i.e., weak volume), the car engine eventually will falter and stall.Had the tank been full (i.e., strong volume), the car would have just cruised ondown the road. Just as too much fuel can flood an engine, too much volume, inthe form of spikes and surges (indicates an emotionally charged tradingenvironment), can signal that the "engine" might stop heading in its currentdirection (i.e., a change in trend is near).

In The Trader's Book of Volume, our focus will be to translate themeaning of volume information into trading strategies and ultimately intotactical volume overlays. How to begin to do this is to understand somevolume basics; the coordinates we are measuring will act as our guide.We begin by understanding what information is embedded within and represented byvolume.

Volume as a Measure of Supply and Demand

On any given day, both volume and price in the markets are constantlyreadjusting to accurately reflect the current market environment. If there is animbalance of buyers in the market, price may adjust to higher levels to enticeexisting holders to sell their positions to offset demand or buying pressure. Ifthere is an imbalance of sellers, price may adjust to lower levels to entice newbuying to offset supply or selling pressure.

As more traders line up and execute their intentions on either the buy side orthe sell side, the increased activity shows up in the form of volume. How volumeinteracts with price on any trading day reveals the level of supply and demandin the market for that security or commodity. The behavior of volume during thetrading day represents hard evidence that the imbalance between buyers andsellers is being resolved. Ultimately, it is the volume action, not theprice action, as most of us have been taught, that signals the first indicationof the direction of that resolution.

Volume as a Gauge of Trader Sentiment and Interest

When we look at a fuel gauge, we get a sense of our ability to go the distance.Similarly, we can take a volume measurement to represent how much bullish orbearish sentiment there is in...

Details zur Ausgabe

• Verlag: McGraw Hill
• Erscheinungsdatum: 2011
• Sprache: Englisch
• ISBN 10: 0071753753
• ISBN 13: 9780071753753
• Einband: Gebundene Ausgabe
• Anzahl der Seiten: 464
• Kontakt zum Hersteller: preigu GmbH & Co. KG; mail@preigu.de; ; Lengericher Landstr. 19; Osnabrück; Niedersachsen; 49078; Deutschland