Volume is a critical indicator in trading because it provides insight into the strength and conviction behind price movements. Most importantly volume does not lie, you can see every order that is executed printed in the volume This creates patterns in the volume just like

These volume patterns are referred to as VPA(Volume Price Analysis) and we can use them to determine if institutions are accumulating or distributing a position. as well as the strength of the move and how likely we are to see follow through.

1. Volume indicator Any charting platform will have the volume indicator available volume will indicate how many shares were traded during a specific candle(1m, 5m, 15m, 1d) I find that volume patterns are best to identify on the bigger time frames like the weekly and daily

i like to add the MA cloud to my volume indicator this way i can easily spot if a stock is trading on higher than average volume

whenever volume shows above the cloud this indicates higher than average volume for the time frame we are on

2. Accumulation accumulation refers to a period of time where institutions begin to add(accumulate) a stock On this chart we can see that accumulation patterns were taking place Higher volume as price gets bought up off the lows and lower volume on normal trading days

3. Volume patterns The strongest volume patterns should look like this: -super high volume ignition candle(indicating initial position from institutions) -low volume pullbacks -volume returning as price moves in the direction of the trend

4. Setup Once you start noticing a stock showing these type of volume patterns we want to combine price action with volume analysis When looking for price action patterns you want to start looking for a range, a base, or any tight consolidation pattern these can be:

5. Entries The easiest way to enter is to find a trigger level for the breakout What I look for, is a previous level of resistance that price has rejected multiple times In this example, you can see the $146 price level has rejected multiple times If price

We can use the 5m time frame to confirm our entry. First 5m close above our level triggers long entry. Stop loss is placed on the low of the daily candle that broke trigger to make sure that we manage our risk in case of a failed breakout

7. Targets Take profits at previous resistance levels If price is making new all time highs, use Fibonacci levels to scale out. My scale out strategy is 25% of the position at a time and moving up stop to break even after first trim

This sets you up for a huge r/r trade for breakouts we do not want the stock to comeback to our entry level the strongest stocks will lockout traders and keep running this is why my scale strategy works so well to hold winners

Like any other strategy this is not a holy grail strategy but there's a reason why some of the best traders in the world swing strong stocks with great volume patterns volume tells all I've personally used this strategy to catch: huge winners over the last 4 years:

I post these setups every night on my twitter with trigger levels, option contracts, and targets. So you can follow along, and learn the strategy. If you enjoyed and learned something from this thread LIKE+RT❤️ for more trade plans and educational threads.

I also made a short video breaking this strategy down on Instagram: this should help to visualize it: https://www.instagram.com/reel...

@SRxTrades What is the input number for Volume MA?

@Tdawg69420s 20

@SRxTrades Your thread is very popular today! #TopUnroll https://threadreaderapp.com/th... 🙏🏼@mThreeMLG for 🥇unroll

@SRxTrades Volume is high basically on the pump days.all other days are “low volume pullback” basically

@SRxTrades Really great pattern vs volume. Actually think $MSTR did exactly that Friday and it broke out by 2:30pm.

@SRxTrades Is volume trading better than MACD trading and have you ever used the PSAR (Parabolic SAR) indicator on any of your charts? 🤔

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@SRxTrades Use volume profile with vwap

@SRxTrades Great thread, volume is important when reading charts!

@SRxTrades Also consider using relative volume (RelVol on TradingView) for intraday, since this normalises for the naturally high volume around the market open and close. RelVol allows you to see very clearly whether it’s higher than normal for the specific time of day.

@SRxTrades Volume is definitely an important part of my strategy.

@SRxTrades Tnx bro great post ❤️

@SRxTrades Thanks for the cloud on the volume💪🏻👊🏻 I like that

@SRxTrades Best explanation i ever seen. Thanks a lot

@SRxTrades Awesome insight you open my eyes to this volume understanding it in great detail. Question what look back period are you using on volume? Thanks so much

@SRxTrades None of this explains or indicates a stock bout to rip and this is where I be confused 😵‍💫

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@SRxTrades From my experience volume work based on absorption When someone sell also same time someone buy High volume mean not only buyer or seller But both active Look how high volume time price behave Still this is not 100% accurate but yes this happens.

@SRxTrades Darkpools tho

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@SRxTrades Vol. on the 5 min makes a dangerous man