All language subtitles for 11. How to Trade Based on Volume

Hello and welcome back to cryptocurrency trading masterclass by wealthy education.

In this video, we'll talk about how the trade based upon volume now.

Volume is crucial because it shows that there are.

Real buyers behind or sellers behind a move, if there aren't much in the way of buying volumes in the

markets.

And it's basically less liquid than a mask could jump.

And give you the false sense of bullishness or bearishness, you could fall based upon the fact that

maybe there just weren't that many participants.

So one sizable order comes in and knocks it around.

So that's why you like volume?

Volume tells you that there are a lot of people in that market getting involved.

Furthermore, we'll not only talk about volume, we're going to talk about RSI, which is relative strength

index.

So as I put this on the chart, you can see that it pulls up another window down here at the bottom

and there is a range between 30 and 70, which is considered to be the normal strength of a trend.

However, there are times where you can get extraordinarily overbought and then as you roll over, that's

a that's a sign that perhaps you are struggling.

There is also something known as divergence, if you remember in the Mac, the video.

That you had a high, like in this case, a higher high and a lower high on the indicator and this oscillator

that tells you the same thing as well, that perhaps maybe we may run into some trouble doesn't necessarily

mean that you have to fall.

It just suggests that you could.

So let's go ahead and assume that every time you get a turn over here in the overbought condition,

the market falls down just as if you get an oversold, which we don't have any examples on this particular

chart, you could see the sellers run out of momentum.

It just suggests that perhaps we had gotten a bit ahead of ourselves.

But another thing that we need to take a look at is that volume that I had talked about previously.

So if you type in volle or volume.

You can click on that and you can see that it does this underlay here.

So one of the quickest ways you can use volume is just simple observation, you know.

OK, so the volume has spiked a couple of times and has been for a positive move, so that tells you

that there's a lot of interest on these very positive, strong days.

Even here, you can see that we spiked on a day that we tried to break higher, so that in and of itself

gives you an idea of whether or not something is real.

You can also take a look at basic.

You know, this is a breakout, this is a breakout above I mean, I guess you could call it 20.

There's a there's a little bit of range here, but once we broke through here.

On this type of volume that tells you there are.

Scores of people willing to get involved, and that means something, and it did continue the trend.

So at that point, it's a breakout.

You should not be looking to short.

You should be looking for value.

Places to buy, perhaps based upon this previous resistance, be in support.

So over here in Bitcoin cash, let's put the RCA.

Overboard here, you can see that we rolled over.

Oversold here, bottom of this move.

Ended up covering.

Let's add the volume back into this chart, so we have both going up at the same time, you can do that

extreme volume, but oversoul.

As we started to get out of the oversold condition, it suggested that perhaps we could rally a bit

and we did.

We went sideways for a very long time, but it was from this level.

So it most certainly was a rally.

Certainly would have made money there.

Over Ponte.

Extreme amount of volume started to drift, so you can see that not only does an extreme amount of oil

on a breakout confirmed the trade and also can confirm that were overbought and things are a little

overdone.

You know, you can see it there as well.

So if we're overbought and there's a lot of volume that asks the question, OK, so who's left to buy?

So that is something to think about.

This is an area that was resistance, it has shown support so far.

Volume wasn't anything great, though, you do want to see a significant amount of volume going back

into the market, so while this isn't necessarily a signal one way or the other, it does give you a

little bit of a heads up as to maybe things aren't as strong as initially thought.

So definitely it's a warning.

It's a little bit of a thing to put it in the back of your head.

Definitely overbought in finance going on the daily overbought here as well, but notice we didn't break

down, we just went sideways.

So let's put the volume up and see if there was any clue there as well.

So we went overboard, volume wasn't crazy, so we just kind of drifted sideways, we went overboard

here on extreme volume and pulled back over by a lot of volume, probably too much to maintain overbought.

A lot of volume did pull back.

Nothing major, though.

Kind of killed time here.

Let's go ahead and draw a horizontal line, an area that should be resistive right here.

We finally get the breakout.

Nice volume.

Not quite everybody yet do reach the overborne condition here, but notice how the volume isn't necessarily

spiking either.

So it's really not until you get up here that the volume spikes, things get a little ahead of themselves.

So now what you would probably do is wait until somewhere in this general vicinity to see if.

Markets pull back and then maybe you get a spike in volume on about that would be a very healthy sign.

Now, obviously, you can put other indicators on here as well.

I would.

Suggest that you don't want to put too many on because then you get what is known as paralysis by analysis.

You know, where there's just so many conflicting signals that you never make a trade, so that's not

going to do you any good.

You need to experiment and figure out which indicators you prefer, which ones tend to work the best

for you.

So notice here, the 50 day M.A, for example, when we did this breakout on volume was underneath,

but when we pulled back, we had a nice volume day there on a balance of the 50 and we kind of went

there.

So there's a couple of different ways you could have played that.

We do not have divergent, like I talked about earlier, you know, the RSI is going higher just as

prices going higher.

So that's not necessarily a negative sign, but what this could be.

Is an overbite, sign, sign, simply step back, let praise come back to you and pick it up when it

gets cheaper.

Volume accompanies most.

Most trading systems.

And therefore, it's something that should be paid close attention to, because you begin to break out

on very little volume, that might just be a very quiet and then day.

So you need to keep that in mind.

We'll take a little bit more of a look at volume as we go through the course, and I'll continue to

show it to you and show you how it confirms various signals.

You know, you don't like breakouts on lack of volume.

You don't necessarily mind like if you're a plane, for example, the.

Bollinger bands.

You know, where you were going back and forth, and if you get up here in the volumes light.

You know, that's not necessarily a bad thing for you to short this, because there isn't a lot of interest.

You know, volume is important, but in and of itself, like everything else, it's not the primary

indicator.

The primary indicator, of course.

Is always going to be price.

So.

That is the first thing you should always look at.

And the next video I'll run through and show you how to identify various overbought and oversold conditions.