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Sunday
Mar092014

Volumize Your Trading!

 

Volume can be an important consideration when trading.  And Prodigio has lots of ways to utilize volume to help keep your trading more profitable.  

 

One of the most basic answers is "make sure there is enough volume" to a question when trading, is "If I buy this stock, will there be someone to buy it back from me when I want to sell it?"   You don't want to be in the position where it looks like you made a nice profit if only your exit order would fill.  This can happen if you are trading stocks where there is not a lot of volume.  There is a way in the Risk Settings window where you can set up a minimum and maximum volume for all of your strategies that you use for "Automated Trading".  But that is just the beginning of what you can do.  

 


 

2014-03-09 10_09_23-Prodigio - paperTrading  [build 5.0.52].png

 

With WizardLab you can write simple rules that you can customize to look at volume for individual strategies.

2014-03-09 10_19_45-Avg Vol(D,14) GTE 1million.png

By using a rule to control volume you can be more flexible with how you use volume in guiding when to put on trades.  Like using Average Volume with different periods lengths or using OHLC’s to get volume information for various timeframes.  By using custom rules you can do a lot more with the volume information that can be made avalible with Prodigio.

 

Another concept that is useful is using volume to gauge whether a change in direction is real by seeing if the Price is increases with volume or is just bouncing around on low volume.   Some charting packages let you show the Volume Bars as colors in the direction of the move of the Price Bars.  Prodigios charts doesn’t do this yet, but we can build a rule that will let us trade with this information.

Green Bar with Rising Volume(15min).png

This rule looks for a Green Bar where the Volume is Greater than the previous bars volume.  This should help indicate when there is more interest in buying a position then there is in selling.  In other words Buying on increasing Volume.

 

Prodigio also has a number of indicators that help deal with volume:

Subscriber: Search for Volume

Basic: Search for Volume

 

Here is also a list of books in the bookstore that might be of interest.

Books with Subject Volume

 

 

In the Wizards Rules: (Subscriber only)

Vol(D) GTE VSMA(D,50) : "IBD" style volume study.

Green Bar with Rising Volume(15min) : Look for higher prices on rising volume.

 

 

Use the comments if you have any questions or feedback!  And please share using the buttons below :-)

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