Volume, The Underutilized Voice Of Market Direction

The Pro Traders at ITMS utilize a set of tools that enable them to remain on the right side of the trade more often than not. The understanding of volume is an important tool in their trading kit. Unlike most indicators and oscillators, volume is real time and does not lag. Therefore, it must be incorporated, and considered on all time frames, for all trades.

The Chart below displays how a long period of gains on light volume preceded a large decline in February of 2007. As the Pro Traders say, light volume always favors the upside. Interestingly today, Tuesday, September 8th, 2009, was the lightest volume of the year and the last month has been the lightest trading volume in the last couple years in total. Watch for the direction in this market when true volume returns. That could be the real key to where this market is headed.