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Using volume snapshots to keep you dialed in

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  • Using volume snapshots to keep you dialed in

    While its easy to see volume spikes in hindsight on a chart - its also easy to be left behind as new volume flow is entering the market, or easy to get stuck in a leg / position while volume is drying up. PriceSquawk keeps listeners alert to the changes in any market's volume state in real-time using a basic volume detection algorithm which compares snapshots of volume trading right now to similar 'volume snapshots' across a broader time frame. When enabled, PriceSquawk will announce these changes in volume conditions so you have a way to objectively categorize the market without having to do any analysis or constantly monitor an indicator. By default PriceSquawk breaks the volume state of the market into the following categories:
    • Negligible Volume
    • Normal Volume
    • Elevated Volume
    • Outlier Volume
    Traders can then interpret the market in the context of these volume states. For example in a lot of markets, outlier volume usually occurs around major breakouts or reversals. The attached 'hindsight' chart provides a visualization of the different volume states PriceSquawk announces (Green = Outlier Volume, Orange = Elevated, Red = Normal, Blue = Negligible).

    More info on how PriceSquawk volume detection works can be found in this blog post. Additionally the PriceSquawk squawk can be configured to combine this automated volume flow analysis with other volume detection methods to announce the market's state in a more specific context - e.g. Outlier Volume AND large absorption at price (aka Volume Clusters). Will post more about how this can be achieved in a subsequent post.

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