A “tool” that is often forgotten when practising technical analysis, is the volume. E.g. how much “fuel” does it take to move the price in one or the other direction X points / percent.

Below two quite simple ideas; first one is volume difference between two days (today – yesterday). The second is 5 day average volume (i.e. a “normal” trading week).

Volume doesn’t “tell” per se what will or could happen but when volume changes drastically (i.e. volume spikes etc.), it should be a heads up that big traders ( = institutional investors aka smart money) are active.

To simplify, institutional investors seldom buy stocks with both hands if the underlying instrument has done a parabolic rally for several weeks or months. And vice versa, smart money doesn’t dump stocks at “oversold levels”. I hate the definition oversold but anyhow, you get the point.. These deep pocket big guys are the ones that make trends.. ..and also the first ones that changes the trend..

DAX volume change (today – yesterday).

DAX 5 day average volume

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