Trading on Volume: The Key to Identifying and Profiting from Stock Price Reversals - Hardcover

Cassidy, Donald

Hardcover

ISBN 10: 0071376046 ISBN 13: 9780071376044

Publisher: McGraw-Hill Education, 2001

Synopsis

Containing techniques to use trading volume as an indicator of market direction, "Trading on Volume" is the first serious analysis of how to employ this accurate tool in today's fast-action trading environment. Specifically, it details how traders can pinpoint the rise, climax, and fall of the activity of market participants, and dramatically increase their opportunities to buy near stock or market bottoms and sell near tops. "Trading on Volume" describes the basics of volume, discusses the value of behavioral science in understanding volume, and then provides actual, market-tested techniques and strategies. Longtime market analyst Don Cassidy presents specific techniques to use volume to trade more efficiently, including: volume crescendos, volume spikes, and crowd formation and dispersion. This volume reveals market trends and trader psychology, and practical applications, using stocks and exchange-traded index funds.

About this title

From the Back Cover:

ALL ABOUT VOLUME­­Today's Most Valuable, but Often Overlooked, Indicator of Market Direction

In today's tumultuous markets, driven more by emotion than fact, trading volume tells an important story of crowd psychology, fear, and greed­­and their impact on prices. While other traders search elsewhere for answers, and while most academics believe prices move randomly, those who truly understand what volume says about future price movement find they have a reliable weapon in their trading arsenal.

Trading on Volume uses historical facts and data to confirm the power of volume in forecasting price action, then explains how to seamlessly incorporate volume analysis into your day-to-day trading program. Exhaustively researched and substantiated, it provides hands-on information for understanding and using:

-Volume spikes and crescendos, and the price movements they consistently precede
-The psychology of trading volume; in essence, why crowds act the way they do
-How mutual fund money flows can reflect market opinions on specific industry groups

Trading volume causes stock prices to rise and fall; it's as simple and complicated as that. Find out the secrets volume has to tell you, and the strategies you can use to make volume a vital and profitable component of your trading program, in the insightful and practical Trading on Volume.

"Volume is the cause; price, the effect...."

Technical researchers and traders tend to focus almost exclusively on price action. Fundamental traders, on the other hand, rely on company and stock valuation. Yet it is trading volume that is as important, if not more important, in understanding and forecasting price movements­­even though it is consistently ignored by all but a few knowledgeable individuals.

Trading on Volume explains how changes in volume can actually disclose the amount and type of interest in a stock and help you determine where the price is going next. More than just a superficial treatment, it is a comprehensive study and analysis of behavioral finance as it relates to trading volume, conventional views on volume from TRIN and tick to Up/Down Volume/Price combinations, and innovative techniques for understanding volume and using it to your advantage in virtually any market environment.

Volume data holds a rich body of practical information. Let Trading on Volume show you how to uncover and use that information to achieve better buy and sell prices, as you exercise greater control over the inherent risks involved in trading. Topics covered include:

-Indicators for understanding if lower volume is bullish or bearish, and why
-How to use intraday trading statistics to compute where pressure is coming from, and when and how sharply it might be changing
-Techniques to dissect the aftermath of a volume-spike day and gauge the behavior of late-coming participants
-Ways to judge when a downside spike might accurately reflect long-term reality­­or instead represents a long-term buying opportunity

Beyond the many difficult-to-measure factors in today's fast-moving markets, it is simple supply and demand that drive stock prices. Trading on Volume shows you how to use that one unarguable fact to your advantage. Regardless of your overall technique or strategy, it will supply you with the knowledge you need to pinpoint the rise, climax, and fall of the activity of market participants, then use that knowledge to buy near market bottoms and sell near tops with unprecedented consistency and accuracy.

About the Author:

Donald L. Cassidy is a senior research analyst and manager of fund flows research for Lipper, Inc. A cum laude graduate of the Wharton School of Finance at the University of Pennsylvania, Cassidy is a popular speaker at investment seminars, appears frequently on radio investment programs, and is a guest finance lecturer at a number of universities. Frequently quoted in business publications including The Wall Street Journal, Barron's, Worth, and Kiplinger's, Cassidy also provides Lipper's weekly radio commentary on mutual funds. His previous books include 30 Strategies for High-Profit Investment Success, It's When You Sell that Counts, and Plugging Into Utilities.

About this edition

• Publisher: McGraw-Hill Education
• Publication date: 2001
• ISBN 10: 0071376046
• ISBN 13: 9780071376044
• Binding: Hardcover
• Number of pages: 302