Scalper’s Paradise Part 2 – Insights on Transactions
This is my second post and the continuation of the Scalper’s Paradise series. In this installment, I’ll dive into transactions—more commonly known as volume. While everyone is aware of it, few truly utilize it effectively. From a retail trader’s perspective, volume is often misunderstood and misused. That’s why today, I’ll break it down and provide exceptional insights, drawing from my institutional experience as a professional trader.
First, let’s clarify what volume really is. Volume is simply the total number of transactions between buyers and sellers. For example, if one buyer wants to purchase a single stock and a seller is willing to sell that stock, the transaction is recorded as one, meaning the volume reflects 1.
Now, if we see that the volume for a given period is 1,000 traded stocks, this means there were 1,000 buyers and 1,000 sellers. It’s crucial to understand that there are always an equal number of buyers and sellers in any transaction.
With this in mind, we can debunk a common misconception: when we see high volume and price movement, it’s incorrect to say there were "a lot of buyers" or "a lot of sellers"—because both sides are always equal. The real reason behind price movements is a different story, and one that I’ll cover in a future post.
Now, let’s take a look at a chart that’s particularly useful for day trading, especially when combined with the volume indicator.
Here, you can see a 10-second chart, which is particularly effective for spotting algorithmic trades used by institutions.
Now, I’ve marked the high-volume areas with a vertical line. Remember, high volume indicates a significant level of market activity.
Now, I’ve marked the candles that had the highest relative trading volumes.
But what can we do with all this information?
Why is high volume so important?
First, high volume disrupts the market. It clearly signals that a major player is in need of liquidity. The reasons behind this can vary, as discussed in Part 1 of this series, but for now, let’s focus on the key takeaway: big players need volume.
When a market participant requires large volume, their activity becomes visible in chunks, revealing parts of their trading strategy. This is exactly why we use 10-second charts—to spot these institutional trades more easily. Once we identify them, we can determine the price levels where they are beginning to accumulate or distribute their positions.
The second reason is more of an institutional strategy rather than something easily executed by retail traders—but I’ll explain it anyway. During my time as an institutional trader, my performance was often evaluated based on how efficiently I could accumulate volume over time. This required finding other large players in the market.
Let’s say I needed to take a long position. To do so, I required sellers on the other side. If I spotted a large player selling, I could use their selling pressure to gradually accumulate my position around their activity. This strategy allowed me to secure better prices over time by executing fewer, larger trades instead of aggressively chasing liquidity.
Ultimately, this is the core objective of an institutional trader—maximizing position size while maintaining optimal pricing.
How Can Retail Traders Use This Information to Improve Their Trading?
1) Identify high-volume areas on a 10-second chart.
2) Mark these levels on your chart.
3) Wait for a breach of these levels and trade in the direction of the breakout.
If there is no breakout, you can align yourself with the large player instead.
For example, if a big player is accumulating buy orders, mark that level and observe whether they continue to hold their position. If they do, you can go long alongside them. However, if other traders (as I did in my institutional trading days) start pushing against that big player, wait for a breach of your marked level and look for short opportunities instead.
Keep in mind that we are talking about day trading and scalping, meaning these are short-term trades. The goal is to capitalize on immediate price movements rather than holding positions for extended periods.
Here, you can see the levels we discussed earlier. Notice how the market clearly reacts to these easily identifiable levels—though trading them successfully is not as simple.
I always use order flow and Level 2 data to confirm my trade ideas.
Wishing you good luck and plenty of valuable insights from my post!
Marco
First, let’s clarify what volume really is. Volume is simply the total number of transactions between buyers and sellers. For example, if one buyer wants to purchase a single stock and a seller is willing to sell that stock, the transaction is recorded as one, meaning the volume reflects 1.
Now, if we see that the volume for a given period is 1,000 traded stocks, this means there were 1,000 buyers and 1,000 sellers. It’s crucial to understand that there are always an equal number of buyers and sellers in any transaction.
With this in mind, we can debunk a common misconception: when we see high volume and price movement, it’s incorrect to say there were "a lot of buyers" or "a lot of sellers"—because both sides are always equal. The real reason behind price movements is a different story, and one that I’ll cover in a future post.
Now, let’s take a look at a chart that’s particularly useful for day trading, especially when combined with the volume indicator.
Here, you can see a 10-second chart, which is particularly effective for spotting algorithmic trades used by institutions.
Now, I’ve marked the high-volume areas with a vertical line. Remember, high volume indicates a significant level of market activity.
Now, I’ve marked the candles that had the highest relative trading volumes.
But what can we do with all this information?
Why is high volume so important?
First, high volume disrupts the market. It clearly signals that a major player is in need of liquidity. The reasons behind this can vary, as discussed in Part 1 of this series, but for now, let’s focus on the key takeaway: big players need volume.
When a market participant requires large volume, their activity becomes visible in chunks, revealing parts of their trading strategy. This is exactly why we use 10-second charts—to spot these institutional trades more easily. Once we identify them, we can determine the price levels where they are beginning to accumulate or distribute their positions.
The second reason is more of an institutional strategy rather than something easily executed by retail traders—but I’ll explain it anyway. During my time as an institutional trader, my performance was often evaluated based on how efficiently I could accumulate volume over time. This required finding other large players in the market.
Let’s say I needed to take a long position. To do so, I required sellers on the other side. If I spotted a large player selling, I could use their selling pressure to gradually accumulate my position around their activity. This strategy allowed me to secure better prices over time by executing fewer, larger trades instead of aggressively chasing liquidity.
Ultimately, this is the core objective of an institutional trader—maximizing position size while maintaining optimal pricing.
How Can Retail Traders Use This Information to Improve Their Trading?
1) Identify high-volume areas on a 10-second chart.
2) Mark these levels on your chart.
3) Wait for a breach of these levels and trade in the direction of the breakout.
If there is no breakout, you can align yourself with the large player instead.
For example, if a big player is accumulating buy orders, mark that level and observe whether they continue to hold their position. If they do, you can go long alongside them. However, if other traders (as I did in my institutional trading days) start pushing against that big player, wait for a breach of your marked level and look for short opportunities instead.
Keep in mind that we are talking about day trading and scalping, meaning these are short-term trades. The goal is to capitalize on immediate price movements rather than holding positions for extended periods.
Here, you can see the levels we discussed earlier. Notice how the market clearly reacts to these easily identifiable levels—though trading them successfully is not as simple.
I always use order flow and Level 2 data to confirm my trade ideas.
Wishing you good luck and plenty of valuable insights from my post!
Marco
Note
Now the markets are closed, and you can see how we determined the levels hours before. YES, it is this powerful :)
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.