Principles of market movements

[Andrey-trader]

Main purpose of this thread-understanding the movement of the market with te help of volumes. The sense of all theory is very simple: the market forms volume, and than trades from the prices with max volumes.

Simple example. We take any day, for example 01.12 (the euro Futures): the Volume of day was made on the price 1,262:
Volumes you can take from programs working with feed.

Now we take a look how the next day trades from that volume.

Buy from max volume accumulation of the previous day.

It is important.All intraday movements lean on intraday volumes of day + last volumes. The FX market follows these quotations.Reaction of
the market to these injections (volumes) looks in shape of "rebound", as is shown in drawing above. Why so the market reacts to the volumes?
The price on which the large volume is accumulated, it is the price on which large players buy or sell, people, who knowe how the system works.
On such prices turn-overs are hundreds million dollars, these prices are key levels from which any market trades.
On an example 2.12 this situation can be described so:
On Monday large positions have come into the market under the same price. It is possible to consider it as the price behind which there are big money.

On Tuesday we see that during the period from 4:00 the market was above this level of a previous day, and has pressed through the market only to the price 1,262.Usual traders are not capable to resist injections of big money.We see reaction of the market to the prices with large volume in a kind of rebound from that prices.






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Example of the same trading principle.Max volume of the day-2.12 was formed on the price 1, 27:

The same system of trading from the max volume of the previous day:

Pay attention that the market has reached volume of Monday 1, 262 - level from which traded Tuesday.
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Importance of large positions.
3/02 on tick volumes at 2:54(Chicago time) appered someone`s large positions- 2 large positions that stick together for very short period of time(1min):

Here they are 50 and 52 lots:
this level should be used in trading, as market reacts to price where are hiden large positions in a shape of "rebound":

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About trend:

For 2 days market formed volumes in this price range and made here(1,281-1,2844) about 6000 of lots.That is large volume.So that corridor devides market in 2 parts- sell zone(under) and buy-zone(above):

1,29 is max volume of previous week.for people who opened long - that should be target:

After strong movement of market on the hights appeared large tick volumes- positions that stick together:

Large positions at 1,2977 and 1,2985.Market may came to previous large positions- 1,2959.That short is risky.So s/l we put at the opening price.

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Max volume of contract-10k which was formed at 8:16:

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BPA (GBP/USD)

3/02 market gave opportunity to open long position from max volume of previous week and max volume of contract:

Volume of previous day was below, trend is gaining.

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BPA (GBP/USD)

Short from max volume of contract:

Short under max volume of previous and before previous 15 min

 

[sdpbroker]

Re

That's really a very good information you have shared with us. Thanks a lot.