How To Trade Futures

Online Trading For Beginners - Price Action And Volume
Online trading for beginners and more at http://daytradervideo.com

So, now that we have some of the basics out of the way for online trading for beginners, let's now begin to talk about a more advanced beginning topic -- Volume and Price Action.

Why are each of these so important? They really work hand in hand.

The simple reason is that they practically show us what the market is doing and how we have to adjust our plan. Understand that this alone is one of the single most important reasons that traders become afraid.

They aren't able to identify that the market has just begun moving differently and therefore do not have plan B ready to go. So, let's begin with the very first reason you might begin to execute plan B.

Online Trading For Beginners

When there is a great deal of volume and volatility in the market you will see that the price bars actually print at a faster speed then when volume is very low. What exactly does this all mean?

Well it means that there are less transactions going through in the market. Meaning that less people are participating or less people are placing orders. When this is the case the market is moving very SLOWLY. In fact trades tend to take a long time to actually work. If you've seen my other videos you'll hear me say, "I was in this trade for just under an hour." That is not a normal occurrence. It's not something we want to see.
It typically means that volume is very low and not many people are participating in the market. When this happens we not only want to be extremely selective about the trades we take but, we also might be better off quitting for the day (plan B). After all we are day traders and we'd really rather only be in a trade for minutes. We don't want to be holding for very long.

The opposite is somewhat true for markets with high volume and volatility. There are extreme cases though where too much volume can be very erratic. These are also markets we'd rather just sit and watch. But typically good volume and volatility means bars are printing at a good speed and we have many trade setups that take minutes to work. No having to sit there and watch paint dry.

Let me know if you liked this video and what else you'd like to see. In the last video in this series we'll be covering putting this all together.