[ant]

Hi Dr. Who,

Not using Volume is steering away from the right path, IMO. Like Soultrader mentioned, I like to focus on market-generated information too. Specifically, Volume tells you about conviction of buyers and sellers, and Price@Volume helps identify value. As a Market Profile trader, I trade value and not simply price. This is one of the drawbacks of traditional technical analysis, i.e. it trades price movement and not value, and places too much importance on the high/low prices of a day's/bar's range where prices are usually rejected. Trading price away from value is a great trade that happens almost every day whether the market is in a trading range or trending (i.e., the price is chasing value or vice versa).

As Soultrader said, if you don't use volume, I would look at price patterns (a la Wyckoff) and market internals. You can also identify divergences by looking at price action. For example, you can compare the length of the current price swing to the previous swings to identify weakening or strengthening momentum or use an oscillator, if you'd prefer. My favorite price patterns are pennants and trading ranges for trading breakouts, trading ranges for fading extremes, flags for trading retracements in a trend, and double tops/bottoms with divergence for trading off of support/resistance (i.e., short-term reversals). But again, you are handicapping yourself if you don't use volume, because volume is extremely helpful when trading these price patterns. For example, to trade a flag, you want to see volume increase in the direction of the trend and volume decrease in the retracement (formation of the flag). Same thing with breakouts. In addition, look for these setups on both lower and higher timeframes and increase trade size when you see these setups lining up in both timeframes. Multiple timeframes help increase trade probability. When this happens, be aggressive. Reconsider using Volume and all of the other market-generated information that the markets provide - this is the source of market information. Everything else is a derivative of this data. Hope this helps.