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A different way of interpreting volume

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Grantx View Post
Id be glad to xplorer.

In the 1 minute chart below, there was a 3000 volume bar right on the candle that hit the 48 mark (marked A).
Everything there would put me off shorting that level for the following reasons:
1. Strong preceding uptrend coming into this level
2. 3x positive candle bars with a corresponding positive volume bar below. This would make me extremely hesitant to short. (if you disregard that this is a roundnumber level and normally can expect some sort of counter move)

So the candle hits but does not break 48 and closes on high volume. Its only when I see the very next candle (marked B) and volume bar that I know there has been absorption. It took those 2 candles to determine that the level was holding.

I was watching the ladder and absorption leading into that level was clearly evident. This would have alerted me to the fact a lot earlier and would have allowed an aggressive short entry. The confirmation being that the level was soaking up huge orders. On the chart you cannot tell until after the fact.


Thanks, I now see what you mean.

As for your observations (Strong preceding uptrend, 3x positive candles, high volume) I understand why you'd be hesitant. I suppose the question is: how much conviction do the bulls have to break that level, and who is playing at that time?

I know you look at the DOM. My take is, as you said, certain things can be seen more clearly with one system over th other. I think absorption is easier seen on the DOM.

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