[ v. here Volume Indicators ]
A few tools which one combines:
## Volume at Price [ see Market Profile ]
## Weis Waves
## — Money Flow Index (MFI) combined with Bollinger Bands
General movement regarding the distribution of volume within the day’s range and the volatility threshold offered by Bollinger Bands — which also are quite helpful in spotting accumulation or distribution (when price begins to concentrate in narrow range, i.e., the market’s volatility is drastically reduced).
What one looks for are signs of strength or weakness to the upside or downside. Particularly, when price interacts with the Bollinger Bands, since it generally doesn’t manage to move beyond them if there is no volume to back the move. In that sense, one just disregards the usual “oversold-overbought” rationale.
If price makes it beyond the bands and I get, say, an overbought reading from MFI, that is actually telling me the move was strong and is likely to continue rather than reverse. A push beyond the bands with a low MFI reading tells the opposite: that price is unlikely to be able to continue in such direction.
Additional volume and general analysis (say, knowing if price is moving towards accumulation or distribution) is then used to corroborate or invalidate this analysis.
Volume Trading Books [ here ]
How to use volume data to determine a bottom [ here ]