S&P
500:
Examples For Short-Term Traders
We define a short-term trend as a general market trend that usually lasts
from a few hours to several days.
The following example shows the basic principles behind our MarketVolume®
analysis. The chart shows the relationship between the index price and the
Volume Moving Average over the short-term.
The above chart was created using our JavaVolume® Charting
technology. Our JavaVolume® charts enable you to anticipate future market
movements and trend changes in the short-term.
Above, you see the relationship between price and volume over
the short-term. A peak in the volume moving average subsequently affects price
movements, causing the index to change direction.
You can see that almost every time the Volume Moving Average
peaks, the index reacts. Knowing this, you can make numerous profitable trades.
The blue line in the chart is a trend of Volume, which we call
the Volume Moving Average (VMA).
When you are using our volume indicators for short-term
trades, it is vital that you are also informed about the current mid- and
long-term trend. It is very risky to play against the general market trend
(defined as the mid- and long-term). For example, if the market is presently in
a general up-trend , it will not always react to large volume surges to the
upside (while the index is moving up); however, it will more than likely react
to significant volume surges to the downside (when the index is moving down). In
other word, when in a general uptrend, the index may not necessarily react to
volume during the price advance, but will likely be impacted by volume during
the price decline.
If you would like further information on this topic, please
refer to our Chart School.
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