How To Combine Price & Volume Using This LEADING Indicator (TSV Trading Strategies)

TL;DR

Time Segmented Volume (TSV) is a volume oscillator that provides valuable leading information about price movements based on volume data, allowing traders to identify breakout moves, momentum runs, and tops or bottoms ahead of price action.

Transcript

Many traders ignore volume. And although volume is a simple concept, it is difficult to analyze it correctly due to inherent challenges in the markets. These challenges make it impossible to read true volume with the standard volume indicators. And although most traders are familiar with price and time oscillators, very few use volume oscillators. ... Read More

Key Insights

• 🔇 Volume is often overlooked by traders, but it can provide valuable insights into price movements.
• 🔇 Most volume indicators lack leading qualities and may not accurately represent true volume.
• 🔇 Market challenges, such as volume distortions at market open, midday, and close, as well as variations in volume levels between instruments and timeframes, make it difficult to analyze volume accurately.
• ⌛ Time Segmented Volume (TSV) is a powerful volume oscillator that compares price and volume data over specific time intervals, eliminating distortions and revealing periods of accumulation and distribution.
• ❤️‍🩹 TSV can be used to confirm, suspect, or predict the end of price moves, improving trading edge.
• 🚸 TSV crossing above the zero line indicates buying pressure, while crossing below indicates selling pressure.
• ✋ Divergences between price and TSV can signal potential tops or bottoms, with consecutive divergences increasing the reliability factor.
• 📡 TSV combined with an exponential moving average (EMA) provides crossover signals for breakout moves, giving traders an advantage in choppy markets.

Questions & Answers

Q: Why do many traders ignore volume in their analysis?

Many traders focus solely on price and time indicators, as analyzing volume can be challenging due to market distortions and the lack of leading qualities in most volume indicators.

Q: What are some challenges in analyzing volume?

Volume distortions occur at the market open, during midday when activity slows down, and at market close due to traders adjusting their orders. Additionally, different instruments and timeframes can have varying volume levels.

Q: How does the Time Segmented Volume (TSV) oscillator address volume distortions?

TSV compares price and volume data over specific time intervals, providing consistent volume information and eliminating distortions caused by market challenges. It reveals periods of accumulation and distribution, offering leading insights into price movements.

Q: How can TSV help traders in identifying breakout moves?

By analyzing TSV in conjunction with price action and identifying periods of accumulation along with new highs in volume at resistance levels, traders can get high probability signals for valid breakouts.

Summary & Key Takeaways

• Many traders overlook volume and rely solely on price and time indicators, missing out on the valuable insights that volume can provide.

• Most volume indicators, such as OBV and Money Flow, lack leading qualities and fail to provide accurate volume information.

• Volume has inherent distortions due to various market challenges, such as large influxes of trade volume at market open and close, the impact of different instruments and timeframes, and the varying levels of volume for each symbol.

• To overcome these challenges, traders can use the Time Segmented Volume (TSV) oscillator, which compares various time segments of price and volume to reveal periods of accumulation (buying) and distribution (selling).