Volume Question

[NewbieTrader121]

Would it be wise to say that a large move down on the hourly, with moderate, slightly above average volume indicates a lack of demand in the stock?

Visa Versa, would it be wise to assume an up move on lower than average volume would indicate a lack of supply?

Pretty broad questions. I am still learning. I've been doing mock trades based on actual market prices. Had my first profit trade today I am pretty proud of myself.

 

[Trembling Hand]

Would it be wise to say that a large move down on the hourly, with moderate, slightly above average volume indicates a lack of demand in the stock?

Short answer yes but,

I would be careful in assuming anything with certainty especially based on only a signal of "slightly above average". It can send you crazy trying to read something out of insignificant information. With volume analysis the reaction 1 to 5 bars after a signal will provide more information than the first. But a move down without increasing volume would suggest an increase in supply and decrease in demand as the prices get cheaper. If the prices consolidate at the new lows you would say that it has now found value where demand = supply. If volume increases you would say demand has now increased at the lower price.

Visa Versa, would it be wise to assume an up move on lower than average volume would indicate a lack of supply?

Yep. Up moves on low volume are my fav for carry on. Strangely most see up moves on large volume as bullish but to me large volume suggests increasing supply = bad.

Pretty broad questions. I am still learning. I've been doing mock trades based on actual market prices. Had my first profit trade today I am pretty proud of myself.

Good one. Now onto the next 1000 trades.

 

[NewbieTrader121]

Oh I see!

I always assumed an up move oh heavily increased volume as being an opportunity to wait for a confirmation to short purely because, without any fundamental change in the stock, the buy side would have the probability of being stressed out.

I am just watching the hourly on WOW (Woolworths Limited). Odd start to the day for that one but I digress.