Learning to trade

[divs4ever]

Why Volume is an Important Clue for Traders​

https://thebull.com.au/author/bob-kohut/

Why Volume is an Important Clue for Traders

Volume is a technical indicator that gauges trend strength and momentum with multiple clues for investors to make trading decisions.

thebull.com.au

 

[StockyGuy]

Question for any of the fellas here who are actual long term successful TRADERS (I'm not currently a trader, just a buy and hold guy, basically): if you have a genuine strong edge I assume you would guard it jealously; so how would you deal with the temptation to also manage other people's money under a prop / investment firm?

Say you have some fantastical strategy that lets you destroy the S&P 500 return by averaging say 30% growth annually over many years, unless you're already a multimillionaire, it can take a very long time to get wealthy without the "2 and 20" or similar arrangement of growing other's people's money (as well as your own).

I understand those firms tend to want to interview you and know all your secrets before they let you use their money. So you might be able to get access to their funds to earn performance fees on, but all your secrets are then owned and constantly tracked by very slick parasites.

Obviously it's not an issue for many; as the brutal reality is most traders simply fail.

 

[DaveTrade]

Question for any of the fellas here who are actual long term successful TRADERS (I'm not currently a trader, just a buy and hold guy, basically): if you have a genuine strong edge I assume you would guard it jealously; so how would you deal with the temptation to also manage other people's money under a prop / investment firm?

Say you have some fantastical strategy that lets you destroy the S&P 500 return by averaging say 30% growth annually over many years, unless you're already a multimillionaire, it can take a very long time to get wealthy without the "2 and 20" or similar arrangement of growing other's people's money (as well as your own).

I understand those firms tend to want to interview you and know all your secrets before they let you use their money. So you might be able to get access to their funds to earn performance fees on, but all your secrets are then owned and constantly tracked by very slick parasites.

Obviously it's not an issue for many; as the brutal reality is most traders simply fail.

@StockyGuy your post touches on a number of points that aren't a part of this thread, I think that it should have been posted into a thread that is more suitable for your topics.

 

[tech/a]

@StockyGuy your talking about leverage.
For me I overcome that by trading Futures.
In the early days I traded margin. I now trade
my own super along with my own short term trading.
Its certainly not and never has been a temptation!.

 

[tech/a]

Why Volume is an Important Clue for Traders​

https://thebull.com.au/author/bob-kohut/

Why Volume is an Important Clue for Traders

Volume is a technical indicator that gauges trend strength and momentum with multiple clues for investors to make trading decisions.

thebull.com.au

I've studied Volume for 35 years.
Most people focus on Demand.
I think this is the wrong way to look at volume.
The biggest influence on price is supply.

If there is plenty of supply it means many important things.

(1) Holders are not willing to keep the instrument.
(2) Demand is not absorbing supply and as such price drops.
(3) Price will not rise until supply stops. Once this happens buyers must
pay more to those willing to sell. OR Demand absorbs price until it reaches a price where
supply sees value in selling into demand. Once the two match in perceived value then the price
will stall.

To me supply governs price. Not demand. If an instrument is held and supply is withdrawn
price will rise as any demand has to pay higher prices.

In volume charts, you will see these blocks: withholding and increasing supply.
These tend to become support and resistance levels NOT price support and resistance but
volume Support and Resistance.

Oneday I should write a paper on Volume support and resistance.

 

[Joe Blow]

Oneday I should write a paper on Volume support and resistance.

Would make a good thread: "A Guide to Volume Support and Resistance" with one new concept per post. I'm sure I'm not alone in thinking that would be well worth the read.

 

[StockyGuy]

@StockyGuy your talking about leverage.
For me I overcome that by trading Futures.
In the early days I traded margin. I now trade
my own super along with my own short term trading.
Its certainly not and never has been a temptation!.

More of a general comment (not so much directed at what you stated): margin loans are terrifying these days - mostly 9-10% interest per annum! Sitting on the safe blue chips preferred by lenders you'd very often end up paying more in interest than the total return of the stock. I'm surprised anyone goes for such rates.

 

[tech/a]

I’ll do it one day
But without protecting it I’ll see it being peddled on the net as the next instant success method .

To do it properly it’s quite a job

 

[DaveTrade]

I'm posting below some wise words from a successful Australian trader, John Howell. He's a pure technical trader that uses a simple system to trade, he has about 20 years of experience in trading and his success is a good example showing that it's not so much the system that you use but your understanding of the markets that makes you the money.

Even experienced traders are always learning but this post is mainly for the benefit of traders in the earlier stages of their journey, or maybe some that have gotten a bit lost from information overload and need a reminder.


Embrace Every Loss, for It is the Seed of Your Growth

In the world of trading, it's not the wins that shape you the most—it's the losses.

Every losing trade carries with it a lesson, a chance to learn, adapt, and sharpen your skills. These moments aren't setbacks; they are stepping stones to mastery.

When you face a loss, don't see it as failure, but as a powerful opportunity to improve. Ask yourself, "What can I learn from this?

How can I adjust my strategy to be better next time?" It's this commitment to growth that will ultimately lead you to the bigger profits, the better decisions, and the more consistent success you seek.

Be grateful for the lessons hidden within each losing trade, for they are the foundation of your future victories. With every setback, you are getting closer to becoming the trader you were meant to be.

Trust in the process, stay disciplined, and know that your future profits will be built on the strength you gain from every loss.

Keep learning. Keep growing. Your best trades are still ahead of you.

Hope this helps
John Howell

 

[tech/a]

 

[DaveTrade]

View attachment 188255

@tech/a has posted an example of one of the more common situations that new traders get themselves into, so instead of just learning from your mistakes learn from examples like this one, mistakes that too many other people have made. It's more cost effective this way.

 

[tech/a]

Trading teaches you far more about yourself and the way you think and react to financial scenarios than any formal education or financial
Guru/advisor.

Number 1 By far the best thing I learnt very early on was how to address risk
How to quantify it and how to control it.

Number 2 is how to be ruthlessly decisive
Both on the buy and the sell side .
No second guessing no changing your mind
No rhetoric with yourself just do it and if your wrong repeat the above!

Number 3 and everyone has heard this time and again . Have a plan but not just any plan
Have a plan you that you know has a positive expectancy .

 

[Country Lad]

Why Volume is an Important Clue for Traders​

https://thebull.com.au/author/bob-kohut/

Why Volume is an Important Clue for Traders

Volume is a technical indicator that gauges trend strength and momentum with multiple clues for investors to make trading decisions.

thebull.com.au

Someone smarter than I may like to explain the last sentence in the article:

"High volume indicates heightened enthusiasm of investors eager to sell while
low volume indicates heightened enthusiasm of investors eager to sell."