"Hawkeye Traders" <hawkeyetrade@g...> wrote in message 
news:904fd02d-18be-4b92-b7eb-ad8f450ccae5@o......
Volume in the market is as important as fuel to your car.  Prices do
not move without buyers and/or sellers.  To help in understanding
typical volume and price behavior, post these notes beside your
computer and learn to identify the different volume behaviors as they
occur on your charts.
Normal Volume Behavior:
• Volume is highest before congestion
• Volume is lowest as it moves deeper into congestion
• Volume increases with a valid breakout of congestion and then
subsides as the trend begins.  (Look for the last Hawkeye Pivot being
taken out.)
• Volume increases with major reversals, approximately for the next
5-7 timeframes
• Volume should move with trend strength, ie if trend dots are up and
on an angle greater that 45%.
• Volume should be lower on the second double top/bottom formations
showing lack of selling.  Then volume will pick up and a trend will be
established.
Abnormal Volume Behavior:
Congestion Areas:
• If heavier volume appears at the low end of congestion area, buying
is being supported and prices tend to go up after breaking out of the
upper price resistance level.
• If heavier volume appears at the higher price level in the
congestion area, then there are more sellers than buyers.  Prices will
eventually decline from the higher support area of the congestion
zone.
• Volume should increase during the breakout then subside as the trend
begins to form.  However, if volume stays high after the breakout and
prices move too strongly, then the breakout will not be valid and
prices will move back into congestion until fair value has been
established  then continue in trend (in other words  price has got
ahead of its self and it requires attendant volume to confirm trend
direction.)
• If price retraces after a breakout from congestion on high volume,
and  bounces off the outside edge of congestion, and then volume picks
up again, this is a valid breakout.
Volume should be in the direction of the breakout.  However, if volume
does not confirm the direction of the breakout, then prices will
likely go in the opposite direction.  Remember, normal volume breakout
increases with the breakout.   Therefore, if you see a breakout with
low volume, anticipate entering in the opposite direction as price
cannot continue in this direction on low volume.
Learn Market Volume Characteristics by FREE news letter subscription
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