[Soultrader]

Hi Robert,

The arrows on the volume panel is showing the low volume rallies followed by high volume sell offs. Good volume on a red bar indicates alot of contracts exchanging hands. Do not mistaken this with a reversal. The markets can still decline even after a volume spike. The key is to watch for the next bar after the volume spike. If the next sell bar occurs on lower volume, this indicates supply getting cut off. Hence you can expect to see a reversal.

The basics of volume teach us that volume should increase in the direction of the trend and decrease on the pullbacks/retracement. You can see this in action through the attached charts. We have high volume selling followed by lower volume pullbacks. This indicates big boys are not interested yet and have more to sell.

I also tend to play the short side around 70% of the time. Why? Not sure but money tends to be made faster on the decline than the rally.