So often, every bit I operate amongst traders, I'll encounter them cope to formulate an opinion: are nosotros going higher, or are nosotros going lower?
As the morn marketplace today has shown us, the respond to that enquiry is sometimes "None of the above."
Note the sharply declining volume, identified yesteryear the bluish arrow. As book has come upwards out of the market, volatility has narrowed to the quest where in that location has been petty short-term opportunity.
Understanding that volume-volatility connector is fundamental for active traders. When book decreases, it way that the large, directional players inwards the marketplace are relatively absent. What remains are marketplace makers as well as scalpers who play for ticks inside narrow ranges, making coin betwixt bids as well as offers.
When book comes into a market, nosotros don't only teach to a greater extent than of the same trade; nosotros teach a qualitatively dissimilar trade, because that added book typically reflects a sure enough form of marketplace participant. Knowing how much merchandise is occurring is a practiced clue every bit to who is trading--and that is an fantabulous nation for how much movement nosotros tin goal expect.
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