/biz/ - Business & Finance

>>2889590
Volume is an indicator. Volume in a period of time tells a lot about market sentiment.

Example: If in a period (say 1 minute) there is a rise in price with heavy volume followed a holding of price or another rise in price with greater volume, chances are the following period will have an even greater rise in price. This is especially true for prices at resistance points.

Why is this important? When prices rise and there is greater than normal volume, it means that there is more buying than selling going on in that period. A few periods like that, and then there is a trend you could follow.

Here's an infographic I've found to help explain it better.

>inb4 spending $1000 on L2 and software.

I don't even use TD's software. I'm not paying for that shit. On the first I will have enough trades that I'll get it for free with L2 data. The only thing I pay for is my commission and my own mistakes.

When I go big time and trade US bond futures, commodity futures, or Eurodollar futures I will have to read charts. I've learned how to interpret charts using penny stocks with high volume. It's pretty much a necessity for day trading of any kind.

Sorry if I sound like an ass.