Why Beginners Misread Volumes and Lose Money

[00:02] look at volumes like real savages. Green candle, green volume, means they are buying. Red candle, red volume, which means they are selling. This is precisely why most people do not understand the value of volumes and, consequently, lose

[00:15] money. In this video, you'll get a complete guide to volumes: how to set them up, how to understand them, how to read them, how large sums of money are loaded and unloaded, and where the crowd is losing that money. My name is Zvezn Artem Anatolyevich. I have been trading in the markets

[00:30] since 2008 and am a qualified investor certified by the Central Bank of Russia. Director of the state-licensed financial school Fintzvezda. Here is my yield chart. Let's go. This video will be made according to a specific

[00:44] structure and will be different from what you have seen. First, I'll tell you what volume is and how to add it to a chart. Next I will explain the market mechanics. And after that I will give the patterns and principles of volumes. on the stock exchange. First, how do you

[00:59] put volumes on your chart? I show this in TradingQue, but you can have any other terminal. Let me show you on TradingQue. To set the volumes, you need to click on the indicators in the search column, enter

[01:12] the volume, and you will see the volume. You can also click on the settings and set a different color for these columns in the style. Where to set volumes in FAM trade. To do this, in the chart settings, you need to click

[01:25] here. And here we have the volume displayed. What is volume for beginner traders? In simple terms, volume is a unit of measurement of how many lots, contracts, shares, well, depending on what kind of financial instrument it is,

[01:40] have changed hands over a certain period of time. Important clarification. Volume is not the number of trades. The number of transactions may vary. But how many units of shares and bonds, let's say, exactly, passed through, well,

[01:55] depending, again, on what kind of instrument it is. This is what matters. This is important. We will constantly return to this in the future . Let's imagine this situation. Here we have one person and here we have another

[02:08] person. One person sells, for example, 1 kg of potatoes. Well, it's impossible to sell air, right? And the second person, accordingly, buys this kilogram of potatoes. Therefore, we have one unit in the form of 1 kg of potatoes. This

[02:23] person could also, for example, sell 4 kg of potatoes. One bought 1 kg and another, for example, bought 3 kg. Accordingly, in this unit of time we have passed four

[02:35] units of volume, that is, 4 kg. I hope this is clear. The logic here is actually very simple and linear. Each of you, I think, understands this. If you've ever gone to a regular market and bought something, you've probably

[02:48] encountered this and understand it. Important clarification. If someone buys, then someone sells. Transactions without a counterparty do not exist. With rare exceptions that you will never encounter. Let's leave these rare

[03:01] exceptions for professionals, for nerds. In 99% of cases, the transaction takes place with the counterparty. Someone bought, which means someone sold. If someone sells, it means someone bought. We may also have another situation.

[03:15] Let's assume we have a dozen people, well, some amount, and each of them, for example, sells 200 grams of potatoes. This one transfers 2 kg of potatoes, this one 3 kg, this one, for example, 100 g of potatoes. And so their combined total

[03:30] position can be purchased by one market participant, because there will be great demand. I think the analogy here is clear. We have small players who have a small position, and there are large players who have a large position, and

[03:43] who influence the market with this very position . We will definitely remember this, because it is a very important point. You know, anyone who has been a trader doesn’t laugh on forums, but I often read something like this.

[03:59] For example, our market is falling very sharply, but the volume here is growing. And someone writes: "Here the crowd is selling right in the loy." So, is she selling into thin air? Yes, of course not. This means that someone is buying all this stuff from this crowd right now. And if no

[04:14] one had bought, the price would not have rebounded. The price would fall endlessly until it found a new buyer. The market is an auction. The price moves not because, so to speak, the crowd is buying or the crowd is selling, but because there are different

[04:30] order mechanics. There is a limit order and there is also a market order. They impact the market differently. A limit order is a kind of barrier, it is, well, a kind of wall. If you place a limit

[04:44] wall. If you place a limit order in the market, it will not be executed unless there is an opposite side, namely a market order. Let's assume a limit order is placed to sell. Until an

[04:59] will not be executed. Market orders move the price, meaning they are aggressive and change quotes. Limit orders, on the contrary, are like a kind of wall; they don’t move the price, they slow it down and hold it back.

[05:14] Now I will show you an example of how quotes change from market orders that I personally place. This is an example from an old video. I'll make a small reference using this QR code. You will be able to find the market mechanics where I gave this

[05:27] example. But now let's look at how these market and limit orders affect the price. I click buy at market price and confirm. And now we see a change in quotes. Quotes went up. I click sell. We have 23 in our portfolio.

[05:40] I sell at market price. And now our price has dropped. Why am I giving such mechanics? Without mechanics, it's practically impossible to understand volumes , because you'll be , because you'll be

[05:52] lot of volumes, it means a major player is entering the market or something like that . Or maybe he's coming out. That's the whole point. So let's now return to volumes after market mechanics. So, for example, we have some kind of

[06:04] this five-minute candle, trades took place , and we see the amount of volume that took place in this very trade. As you can see, their volumes are slightly different. That is, there are periods when there are a lot of volumes, there are

[06:20] periods when there are few volumes, there are periods when volumes grow, and there are periods when volumes fall. Before this we looked at a big picture, but this is what the picture looks like on a small scale. In this case, the

[06:32] time frame is five minutes. Each candle shows the change in quotes over 5 minutes. And the volumes, accordingly, are calculated in 5 minutes. Notice how we are a in the process they somehow increase, decrease, and live their own

[06:47] life. There are no watches with 19 volumes. This is an example of dollar-ruble futures. And there are three trading sessions here: morning, in which no one trades, afternoon, and evening, in which no one really trades either. Therefore, it is not surprising that there will not be much volume during the

[07:02] morning and evening trading sessions . The main volumes trading session. Also trading session. Also notice how there is a lot of volume in the range between 5pm and 6pm

[07:14] . Here's another example. At 1700 the next day there was also a lot of volume. And here is the next example, also in the period between 17 and 18 hours, a lot of volumes passed. This is how the market reacts to the opening of exchanges in

[07:29] other countries. In particular, the American Stock Exchange opens at 17:30. And our Russian market also reacts to this with volume. What does a classic volume diagram look like ? Market growth is an attraction for investors. Everyone wants

[07:43] to buy growing assets. And that's why volumes often grow in a growing market. Investors like growing businesses, they like growing companies, so they buy them, and the market reacts to that . There is no strict correlation

[07:58] between increase, volume and growth. We will talk about this a little further. But the logic is very simple. The market is growing and often the volumes are growing too. Of course, sooner or later the market will reach a point where it will be very expensive, where

[08:12] this instrument.” They start to refuse to make purchases. And those who bought earlier, for example, at this point, close their profitable positions, as a result of which our market goes into a correction. The initial

[08:26] movement in correction, that is, in the opposite direction, is accompanied by an increase in volumes. And then the volumes begin to decrease. A price drop does not attract new participants, despite all the paradoxicality, because people

[08:38] are confused and waiting for the market to finally start moving in the opposite direction. Sooner or later the market reaches a point where it becomes cheap. Moreover, both expensive and cheap are subjective factors that reflect the

[08:51] mood of investors. In fact, it may be either inexpensive or expensive, and undervalued or overvalued. What matters is what investors think at the moment and how they vote for it with their own money. After

[09:07] this, when market participants understand what you are doing, they begin to buy, and the volumes begin to grow slightly in advance, literally just a little, the market begins to turn around and the cycle repeats. We reach a place where it is

[09:21] expensive again, a correction occurs again, and so on. What will happen if, for example, we have a correction, the market grows again, but there is insufficient demand? For example, it could be a company that has released bad reports, or a bad

[09:35] news background, or simply participants refuse to buy at such high prices. In this case, the market begins to reverse because there is not enough demand. And what will happen to the volume? Volumes will, of course, start to

[09:48] fall again. And then the cycle repeats. A little volume appears, the market rises, the market falls. When the market reaches a point that market participants subjectively consider to be the bottom, volumes will begin to increase sharply and the market may

[10:03] briefly move upward. If in this case there is sufficient demand, then we will see subsequent growth, and if not, then a subsequent decline. Everything will depend on the moment. It is important that at the moment when market participants

[10:17] subjectively consider the price of this instrument to be the bottom, our volumes will increase . Moreover, I will repeat once again, with growth, and with cheapness, and with expensiveness, and with the bottom. These are all subjective assessments of investors who are in the moment, which

[10:33] may have nothing to do with what is happening in reality. A company can be absolutely rotten, its shares can be complete crap, and even not exist at all, but at the same time it will grow very well and break

[10:48] new highs every time. This is the art of trading. and the art of investing is finding a situation where the market is trading against the actual situation that is happening. Well, that's basically how we

[11:02] make money. And this is also called market inefficiency, because when the market is efficient, it matches what happens in reality. When a market is inefficient, it does not reflect what is happening in reality. Let's

[11:14] take a look at Gazprom shares and try to understand how volumes rose or fell . Here we have a recovery after a fall. We had a big drop, a lot of volume appears because investors saw the bottom in this, and the market

[11:28] begins to turn around. Volumes are gradually starting to grow. After this, volumes begin to fall, and our market goes into correction. There is a lot of volume again, and investors are confident that this is the bottom. Our market is starting to

[11:41] turn around and grow again. Volumes fall, the market goes into a correction, reaches a certain subjective bottom again, and the market starts to grow again. Let's look at Bitcoin with a 2- hour timeframe. The market is in a bullish trend.

[11:56] Volumes increase during growth, and during corrections, volumes decrease. Growth again, volumes grow again, correction, volumes fall. The market grows, volumes grow, correction, volumes fall. Growth again, volumes grow again, correction, volumes fall. I also ask

[12:11] you to pay attention to the fact that when we have the first correction, our volumes, as a rule, increase. After that they start to fall. Bottom, increase in volume, reversal. Bottom, increase in volume, reversal. And something attracts me now

[12:25] . If we see that the market is growing, well, the volumes might grow at first, but then the volumes start to fall. This is called divergence, that is, the discrepancy between price and volume. And it symbolizes that in the very

[12:38] near future the market will either go sideways or, most likely, will simply begin to reverse. This is connected, of course, with the fact that our demand is gradually falling, but we have a small amount of capital inertia. Imagine

[12:52] that you have a car. So, you filled the car with the initial some movement. When you run out of gas, it is obvious that the car will continue to run for some insignificant period of time due to inertia. can move

[13:06] forward. But if it was, for example, a long-term trend, people are used to the market constantly growing, well, that is, there is a kind of a hill for this car, then, of course, this inertia, it can even be a little protracted, but the outcome will be

[13:19] obvious, and the market will sooner or later go in the opposite direction, just like the car, it will sooner or later stop. Now I will show you a few examples on the chart of what price and volume divergence is . But first, a short advertisement,

[13:33] please watch it. She helps our channel survive. Unfortunately, the government leaves us no other options except private investment and trading. I won't say anymore that we won't have a

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[15:17] best training program. Let's take a look at Sberbank's promotion. Our market is growing, but volumes are falling. Well, it’s clear that after this the market went down in correction. By the way, I wrote about this in my Telegram channel.

[15:31] You can now see the link on your screen as a QR code. Scan and sign. Another example from the same Sberbank promotion. The market grows, volumes fall, the market reverses. Another example. The market grows, volumes fall, the market

[15:46] reverses. I'm showing it on Sberbank shares, because on shares it's, well, more obvious, so to speak. With cryptocurrencies and currencies this is not entirely clear. Therefore, if you are a beginner, look at this principle specifically on

[15:59] stocks. It doesn't matter if they are Russian, maybe foreign ones are available to you. If you have the trade them. I always wanted to see the Tteesla promotion. Let's take a look at the Tteesla promotion now. And here, notice how the same

[16:13] principle works. Our market is growing, our volumes are growing, everything is great. Here we have a new thing happening, it turns out, the maximum, and at the same time our volumes are falling. That is, our maximum volume was right here. Then our market seems to make a new

[16:26] high, but at the same time volumes are falling. This means that our market participants are not buying so actively at current prices. It's expensive for them. A divergence forms in the market and the market reverses. The market is turning around and moving down.

[16:39] You can see how our volumes initially grow a little , and then begin to fall. The market reaches a subjective bottom, volumes appear, market participants buy, the market reverses. And please note that our volumes are falling

[16:54] or remain at the same level, and growth is sluggish. Basically, like your wife's ex. All this gives us an understanding of volumes over the long term, but there is also a short-term situation. But

[17:08] most likely, your maximum interest will be in the short term, because this is where the in the short term, because this is where the mean that there will be a subsequent increase, and a drop in volumes does not mean that there will be a

[17:23] subsequent reversal. We have two types of participants in the market: ordinary participants, and participants who have, well, small accounts, up to 100 million rubles. plus or minus. It is clear that if this is a stock that, let’s say,

[17:35] is traded with a daily turnover of plus or minus 120,000 rubles there, 200,000 rubles there. It will be enough for you to pump it up, this promotion. And the more liquid the financial capitalization, the more money there is, the more money you need to

[17:49] become this very large player. Therefore, we are often just ordinary market participants. And the second type is a major player. There are a lot of urban legends on the internet about big players, that they are driving the

[18:02] on. All of this is mostly a conspiracy theory of traders who, well, apparently, haven’t watched my videos and don’t understand what market mechanics are, that it’s very difficult to do and sometimes very expensive, but, nevertheless, it still

[18:15] say. So, in the context of volumes, a large player is interesting to us precisely because he has a large position. He has a large position, and It doesn't work any other way. And just like in the long term, we

[18:31] will be interested in divergence, but in the short term. What does this mean? Let's imagine this situation. Our market is growing, well, some corrections are happening, so to speak. In general, something is happening, so to speak, a life of its own

[18:45] , yes, and at the same time our volumes are growing. During corrections, these same volumes fall slightly. With subsequent growth, these same volumes grow again. And now we have this moment. Our market slows down and narrows down

[18:59] to literally one or two candles, but at the same time our volumes are simply crazy. Our volumes are growing and they are much larger than before. And this is what is called price and volume divergence. That is, the price does not correspond to the volumes that

[19:14] usually occur. In this situation, we can say that a major participant may have appeared in the markets. I say perhaps, because you still need to look at everything in context and determine that context. If you

[19:26] remember about the mechanics of the market, in this lecture, in this lesson, I that here we have a large position of a major participant. A large position of a large participant is a barrier to price. The price cannot

[19:40] break through it. At the same time, we always have buyers. Buyers are pushing the market upwards. They are forcing the market to the top. But there is a position of a major participant that does not allow them to go higher. The increase in volumes indicates that

[19:53] large volume transactions are taking place here. That is, someone directly with their own money simply made a crazy trading turnover. And in this situation we have a fork in the road. If there is more demand here for some reason, for example, there

[20:09] for some reason, for example, there volumes. or, for example, some positive news will come out and attract more interested parties to this tool, who will also buy from us. Then

[20:21] the market will shoot up, and the market participant who was trading here will be forced to exit his unprofitable position. To get out of a short, you need to buy, and that's why the market shoots

[20:34] up. This is the first scenario. The second scenario is if there is insufficient demand, our market will simply collapse, and then market participants who were buying right here at the tops will be forced to

[20:49] exit their positions in the same way, and the market will then reverse. I'll show you some deal. I showed it in one of the episodes on this channel. He either will be or was. So please

[21:01] subscribe to my channel. Please don't skimp on subscriptions, these are difficult times. That is, I tell for free what people either take money for, yes, and sometimes they either hide it or are simply amateurish enough not to know it themselves. Please, I

[21:13] tearfully ask you to subscribe. So here we have a downward movement. We see how the range is being compressed, that is, the market is getting smaller. At the same time, our volumes are exactly the same. And now we have a realization, that is, the market

[21:25] begins to rise sharply. And here is my entry point to buy with a stop for this situation. Why did I come here? Because I saw a major participant here. This is evidenced by the compression of the range and the increase in volume.

[21:38] This example is more spread out over time. But could it be that, for example, everything will be very quickly collected in one point? Of course it can. Sometimes it happens that the market starts to accelerate sharply, and for an hour it seems

[21:52] as if it will break through the monitor, and we get a lot of volume. Beginners think that the market will rise further, but experienced traders understand that at this moment someone is selling off a large position. And I’ll ask you

[22:07] to look at the market a little differently. So your market has grown upwards, and you have a lot of volume. This price for this instrument, well, let's say it's some kind of promotion in relation to previous prices ? Well, obviously expensive. Let's assume

[22:20] this is not a promotion, but, for example, kefir. Yesterday it cost, for example, 40 rubles, and now it costs 80 rubles. twice as expensive, as if he had just retold the reality . Oh well. And the volumes are crazy. And you, for example, the owner, you are a

[22:34] magnate, you, for example, are a producer of this very kefir, you see that do? Obviously, you will increase production and sell in larger quantities. This will lead to an imbalance, and you will have more offers on the market,

[22:48] and, consequently, your prices will go further down. It's the same with stocks: when the market takes off and market participants see, "Oh my god, how much it's grown, and naturally, people want to take their profits," they start selling

[23:00] part of their positions, and the market goes into a correction, that is, the market quickly reverses. Let me give you an example from another deal. I also showed it in one of the episodes. And here the situation is very similar. Our market has fallen.

[23:14] Here I am in the short. And I close the first part, I close it, in my opinion, at 80% of its volume. I can't remember for sure. Several weeks have passed since closing myself here? Because, look, a long downward flight is not typical for the

[23:29] instrument. And I understand that, well, if it has fallen that much, market participants will now start buying. And, naturally, I close my position. Other participants do the same. That is, participants view the market as a living

[23:41] structure. And you look at the market as a living structure. Simply put, high volume often leads to a reversal. And this very turnaround, it will not necessarily be global, it can also be local. That is, the market

[23:55] may go into, so to speak, a small sideways correction or there will be a pullback, but a small one. It's always, well, it depends on the context. If the market has shot up very strongly, then, of course, there could be a

[24:08] full-fledged reversal. But here everything needs to be looked at in context. However, . Let's take a look at Bitcoin. And let's take a smaller time frame, for example, 5 minutes. This applies to any time frame, it's just

[24:22] more obvious to you on smaller time frames . And to show, so that something remains in the head . Look, the market accelerates sharply, a lot of volume appears, and then a reversal occurs. Acceleration occurs again, a lot of

[24:35] volume appears, a reversal occurs. Acceleration, lots of volume, turnaround. Acceleration, lots of also consider time sessions. Large volume in, for example, the Pacific session will differ from the Asian session or the European

[24:51] to see the flash. A flash appears, a turn appears. A flash appears, a turn appears. Flash, turn, flash again, turn again. How to trade these big flashes? They are traded, of course, in a reversal

[25:05] and are often traded aggressively. So please don't use the hundredth shoulder there. This has already become a meme. That is, trade very carefully and preferably according to context. Now I will tell you a little about the algorithm on how to use this. There

[25:20] are good examples in paid training courses. Well, I would call them paid or conditionally free , because a kilogram of mine already costs 700 rubles at the market. My training costs as much as 10 kg of capelin. This is just ridiculous. I call this conditionally free.

[25:35] You can find the link using this QR code. Please scan it and review it. Your market makes a big jump and you get a lot of volume. And let's assume that this is a five-minute time frame. It is necessary

[25:47] to open a high time interval for the five-minute period. This is a watch. Please use this table. If you trade, for example, five minutes, then you will open for 30 minutes. If it's a watch, 4 hours. If 4 hours, then a day off. A day off, a

[26:01] week off. If a week, then a month. So , when you open the hourly chart, you should see a downward trend. Ideally , wait until the market just starts to move in the opposite direction. And here you make a sale transaction. You

[26:15] ask me: “Is it possible that the market, for example, will continue to go up?” I'll answer: "Yes, it can. For this reason, if the market goes further up, there are two ways to deal with it. The

[26:28] first way is to simply close at the stop." Method two: we average, but we do this not to the point of madness and also after another downward movement. And you go up even further?” Maybe. And here you

[26:41] stop order. That is, you can exit either at the first stop order, or divide your trading volume into two or three steps and exit at the second stop order. I prefer this option. First of all, I

[26:56] try not to get into this situation, because I rarely manage to enter it precisely. I enter quite sweepingly and average out. This does not mean that you should do it to the point of madness. We still cover the loss if this

[27:09] loss occurs. If we trade with leverage, this is especially true, but we average within the position. I hope this is clear. As for take profit, we take one to one or one to two from our stop. There are other options for how

[27:23] in the next videos. I hope you have gained a better understanding of the topic of volumes today. Write in the comments what topics I should consider. Come see me for training. Happy earning.