Volumes. Why every trader should be able to work with them.The third “stream” of incoming real data, which simply cannot be ignored when analyzing a chart, is volumes. I’ll try to explain why the third stream, what are the first two.
On any chart of a trading instrument there are two scales, price and time. These are two real and independent incoming data streams.
All Technical Analysis studies them inside and out.
Price behavior is studied in the form of graphic figures, support/resistance levels, candlestick analysis and patterns, trend lines and channels, the movement of waves of price movement, using indicators, Renko charts, tic-tac-toe, etc. and so on.
The time scale is divided into seasonality, quarters, trading sessions, sessions for hours before and after lunch, and simply into hours and minutes of possible manipulations (in ICT smartmoney, for example, Kill zones, macros).
I would call volumes the third stream of data, the “3rd scale on the chart.”
This is an independent and independent flow of data about the turnover of money, or more precisely, contracts traded at a certain time and at a certain price.
All indicators and volume analysis tools do not depend on price and time in the direct sense. They work with their data coming from the exchange.
A clear example... Any oscillator, for example, depends on the price, is calculated using a formula based on the price value, and produces a certain “averaged” option.” The cumulative delta curve is constructed based on data on the number of contracts traded from the exchange, and does not depend in any way on the price value; it has its own data.
Volumes also include not only analysis using various indicators and clusters. And the ability to work with COT reports, open interest and other data from CME. This is also data on contracts traded by different groups of participants.
And understanding how options work, all markets are closely related and influence each other. There are many complex risk hedging designs. Nobody wants to lose money.
And I think ignoring this data flow and not being able to work with it is, at the very least, stupid.
And simply, isn’t it interesting to look inside a candle or figure to see what’s really going on there? The price is in a “triangle or sideways”, accumulation/distribution is taking place, but is anything really happening there? Are you waiting for a rollback to imbalance (FVG), but is there this imbalance there? Are you waiting for a reaction to a level, “liquidity withdrawal”, order block, but is there something or someone inside the reaction or not?
By the way, I don’t know the fourth data stream, if you know, please let me know. I'll be happy to study it.
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