The Basics Of Volume Analysis

Learn strategies to spot and track money trends. Volume analysis is a key skill.
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Instructed by Hari Swaminathan Business / Finance
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  • Lectures 13
  • Length 1.5 hours
  • Skill Level All Levels
  • Languages English
  • Includes Lifetime access
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About This Course

Published 2/2013 English

Course Description

VOLUME ANALYSIS AND TRACKING SMART MONEY

Volume is perhaps the most under-rated indicator in the markets. Volume shows the activities of the big hedge funds and proprietary desk traders,  players we often refer to as "smart money". Good volume analysis shows critical points at which markets turn around, when activity levels are low or high or when smart money is active or inactive. In this course, we analyze various stock charts, and combine volume analysis with price action. Volume also provides a storyline to the markets. Constructing this storyline correctly is critical in terms of trade entry and exits. 

Smart Money or Big money has always tried to (legally) manipulate  the markets to their advantage. Their goals are to conceal their activities as much as possible. But Volume is one indicator they cannot conceal. In many ways, this course levels the playing field for the average retail investor. Once you take this course, you'll know what to look for, and you'll be in a position to track smart money as they're entering a Stock or they're running for the exits. And your objective is to "follow the smart money". When you position your trades in harmony with the money flows of smart money, you're adding a whole layer of high-probability characteristics to your investing activities.

This is an exciting course ! 

What you will master
  • Why is Volume the most under-rated indicator
  • Identify the activities of smart money precisely
  • "Swim with the tide" - increase your odds of success
  • How to read long term and shorter term charts
  • Identify points of major market reversals (before they happen)
  • What is Distribution and Accumulation
  • Put short term price action in context of longer term charts
  • All of this explained in simple terms
  • Study of various charts on various timeframes


SECTION I

In this Section, we explore why Volume is a critical indicator to study, and why this is the only indicator that clearly shows the activities of Smart Money. What can Volume analysis tell us about activity levels in the markets. Volume is sometimes referred to as the "fuel of the markets", and this is very true. This Section also defines some of the rules of "Smart Money". These rules form the basis for the games and that Smart Money play, and the tactics they deploy to manipulate the markets to their advantage.

 

SECTION II

This section is a deep-dive into the methodology for spotting and tracking "Smart Money" using Volume analysis. A perfect timeframe for analyzing these activities was during the period preceding the financial crisis of 2007/2008 and the period after the bottom in March 2009. And there is no better instrument to study this than the S&P 500 Index itself. This section is a fascinating and shocking analysis of how we could spot Smart Money doing the following - 

- Start selling in March 2007, about 6 months before the top in October 2007

- They sold ("distributed") for about 9 months with barely a move in price

- Ran the bear market down to their liking

- Start "accumulating" stock by the end of 2008

- Finished accumulation phase over a period of 9 months

- Are running the Bull market right now to their liking

 

SECTION III

Detailed case studies of major stocks analyzing Smart money activity points - 

1) BIDU - Smart Money is in, and they are not leaving

2) CAT - Similar to BIDU but more choppiness

3) FSLR - Gave a clear signal of smart money entry

4) NFLX, PCLN and FXE - Gave various signals for entry and exit

5) Silver Case study - Smart Money left Silver and has not come back yet.

What are the requirements?

  • Basic understanding of financial markets
  • Interest in Technical analysis and chart reading skills

What am I going to get from this course?

  • Understand the importance of Volume analysis when trading the financial markets
  • Why the activities of "Smart Money" is revealed through Volume analysis
  • How can we track "Smart Money" in all major stocks and indices
  • Take your analysis skills to cutting-edge levels
  • Position your trades in harmony with the "money flows"
  • Become an expert in Chart reading skills

What is the target audience?

  • Anyone interested in Financial markets and trading
  • If you trade Stocks, Futures, Options, ETFs, Gold or Currencies
  • If you want to improve your skills in following the "smart money" flows in and out of stocks

What you get with this course?

Not for you? No problem.
30 day money back guarantee.

Forever yours.
Lifetime access.

Learn on the go.
Desktop, iOS and Android.

Get rewarded.
Certificate of completion.

Curriculum

Section 1: Introduction to Volume Analysis and Smart Money
05:59

  • What or Who is “smart money”
  • Importance of trading in harmony with smart money
  • Tracking “smart money”

11:16

  • Study of Volume
  • Supply and Demand
  • Wyckoff methodology (www.richardwyckoff.org)

11:34

Volume has to be analyzed with price

And apply a market methodology to this context

Volume shows when smart money is exiting and when they are piling in

But first we must understand

What does Volume tell us

What price did on that volume

Where does this fit in with the market story

Most importantly, we must understand what are the "rules of smart money"

Section 2: Tracking Smart Money
09:19
This lecture is a fascinating look at the period between 2003 and 2007 in a bull market. The S&P 500 Index is analyzed in detail for critical information about the activities of smart money. And in particular, the period leading upto the top in October 2007 where we can clearly spot Smart Money running for the exits.
05:29
How does Smart money actually get out of its holdings and how they avoid the prices going lower during this time. The Distributing phase is when euphoria levels are high, and the average retail investors are left holding or buying stock at the highest levels.
05:50
Once smart money is finished with distributing stock, they are ready to run the bear market down. Stocks must move in an up and down cycle for smart money to make their money.
08:00
Once prices have gone down far enough, its time for Smart Money to pick up stocks at the lowest price. Stocks are a bargain at this point, and the panic stricken public is dumping stock at ridiculous levels into the waiting hands of Smart Money.
Section 3: Case Studies - Detailed Volume analysis and Smart Money activity in various Stock charts
07:14
Case Study of a 3 year chart on BIDU. Smart Money has piled on to BIDU and they are still in it.
06:27
Similar to BIDU, Smart Money was able to get into CAT at ridiculously low prices.
05:59
Smart Money and volume analysis clearly show money coming into FSLR in this case study.
09:21
General case studies of NFLX, PCLN and FXE. Many a time, there are no signals. You only trade on strong signals, and not try too hard to find a signal where there is none.
11:28
A case study on the Silver chart for the last 3 years. Smart Money ran for the exits (but they did give enough signals that they were running), and they have not come back again.
Volume analysis and Smart Money quiz
5 questions
04:34
This is the concluding lecture capturing key elements of Volume analysis 

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Instructor Biography

Hari Swaminathan, Options Mentor, Financial markets educator, Trader, Investor

Knowledge. Strategy. Execution.

Hari Swaminathan is the founder of OptionTiger, a cutting-edge Options Mentoring company, and a full-circle educator in all areas of Financial Markets, and developer of proprietary Intellectual Property around enhancing base case Options strategies (which favor the Market Makers) and turns that deficit into a massive EDGE on the trader's side.. Like building a "powerful Strategy for all Option Strategies". Hari is self-taught in Options and actively trading these instruments for almost 10 years. Hari has a Bachelors degree in Engineering from India, and MBA's from Columbia University in NYC and London Business School in London UK. 

More than ever, its become important for normal people to take charge of their financial situation, and attempt to create additional income streams, or build wealth for the Long Run, in a smart, risk-controlled manner. This is precisely my mission. Through Knowledge, Education, and disciplined Money management approaches. Video-based courseware, Practical workshops , a 4-week Live Mentoring program and several other channels.

Let's break down the Options game in a brutal but realistic manner. 

The Pluses

1. Options were invented out of thin air. And the people who invented it won Nobel Prizes for their invention (Fisher and Black). It is purely a "Mathematical" concept, with no real connections to the external except for one, that's defined implicitly  by its deign.. Its the relationship between an Option and any Asset in the real world,.The associated relationship with any asset's price behavior in precisely defined time frames. In common language, it tries to answer a fundamental question underpinning all of humanity. What kind of mathematical model can help us define the risk of certain events happening, or not happening. The model is very similar to the Insurance industry who basically provide the odds calculated bty large and wide samples of data. It's only then they can provide somewhat of an accurate quote, based on Data science, Statistical Modeling and a heavy dose of Probability theory.

2. This gives birth to very complex but interesting  analytical scenarios. It also gives us the ability to model Options with a set of tools like a car dashboard., but much more powerful and sophisticated approaches. In many cases, you don't need to see what the stock or the larger markets are doing. These numbers are embedded in the mathematical formulas that underpin Options.

3. Because everything in Options is defined in mathematical terms, its also important to realize that OPTIONS will always be the same. The math behind Options will always be the same. forever. Unless they discover serious flaws iin the formulas that tries to determine the fair Option price based on the kind of asset, its price action, Highs and Lows as defined in statistical terms over a certain fixed time frame. It should make some amount of intuitive sense, even if you can't nail it precisely at first..Things like Price Volatility in the "underlying asset, the time lkeft for the Option to expire (Every Option is created with a fixed period of life, and all Option die at some time (They expire) . But the short life that many Options go through, its a wild life, filled with roller coaster like adventures,. 

4. As an analogy, you can make comparisons with the game of Chess. You may agree that Chess is a game of "skill". It's a game of strategy and how well you can plan (ahead) to attack, defend or take a neutral position . We also believe that Chess is strategy-focused and depends upon certain mathematical  properties. The reason we know its a game of skill is : Try to play 100 chess games with Kasparov or Anand. Normal people are guaranteed a loss in all 100 games. And why do we know its underlying features are mathematics based L The reason that computers like Deep Blue can beat Kasparov by a majority, and as computer processing power has increased exponentially by many 1000's of times,, the human number crunching powers have pretty much been constant. So today all professional Chess players refuse to play the machine, because while they used to lose to them by majority, today it's almost guaranteed that they WILL LOSE EVERY GAME

5. Lastly Options are just like Chess. They are a "skill set", and requires acquiring a deep set of analytical skills much more so han most skill sets, but can only be  mastered over a period of time. We cannot turn into a Kasparov in a matter of weeks or even a few month. It does NOT work like that. But once you go through this process that can go for 1 to 2 years or more, there is a powerful light at the end of that tunnel. You build a skill set for life which means things like Age or geographical location, Lifestyles, Weather are no longer a barrier to create a consistent income streams strategically regardless of who you are, where you are, or how old you are. This is POWERFUL stuff. Now let's look at the negatives.


MINUSES


Options are easily the most fascinating financial instrument with several upside benefits, but they an equakky powerful set of minuses. 

1. Options have a steep learning curve. Gon't expect to become Kasparov in a couple of months. Or even a year or two. You caan bbuild a Kas[arov or Anand in those timeframes. And why is this important to realize, Because we are playing a Kasparov or Anand every time we enter the Options market. Market Makers who are 99% of the time, the counter party to all Options trades, are Options professionals. with 10 to 20 years with exoerience in Optioms. . The company has entrusted the responsibility of providing liquidity to the market which is a :legal duty" but can have disastrous consequences. While we have hours tp plam our attaacks, the Market Maker literall seconds for a trade. In a normal  day, a market maker can do many thousands of trades. One can omly be in awe of their skills. 

2. If you're interested in Options, sp=o NOT approacg it with a mondset of or rewuirement to ,aking ,omey. This is not only npu goimg to happen, but iys a recipe for disaster. It's like a student of Medicine waning to ptactice thei skiils after 2 monyjs of study, Keepimh with the Chess analogy,, because its the best way to think about Options before you actually know Options. To develop a meaningful batting average, you will need Time, Patience, and Disipline. They domt develop overnight. Ifyou focus completely on the learning ideally practicing on paper money accounts

are powerful, but they have a learning curve. I've broken down all the complexities of Options in simple language that everyone can understand. The courseware uses real trade examples, always highlighting the pluses and minuses of every investment situation. Options provide the best way to take advantage of bull cycles, bear cycles and everything in between.

As someone that has self-learnt Options and through making mistakes, I can tell you Options trading is not something you should take lightly. You will hear people talking of fantastic triple and quadruple digit returns. I'm here to be brutally honest with you - 

- Be very very careful in the first 12 months of Options trading. 

- This is when everyone is the most vulnerable to losing money. 

- Your main objective during this time is to focus on learning this craft and not lose money during this time. 

Having said that, if you can get past the first 12 months and acquire the expertise in a systematic manner, true financial independence awaits.

You can trade Options from anywhere in the world, regardless of how old you are. You never have to worry about job security any more because you have a skill that can produce consistent wealth month after month. 

But you have some serious but exciting work to do before you can get there, and I'm here to help you in this journey. 

Watch my Free Course for Options Trading Beginners where I draw out a detailed roadmap of what this 12-month journey looks like, and the specific strategies you should master during each step of this learning process. 

Watch my Free Mini-courses or my YouTube channel , all of which have the highest quality of education material. 

And join me in my UDemy courses, where I share cutting-edge theoretical knowledge mixed with practical insights, strategy and impeccable execution through live trading examples. 

If you have any questions at any time, please feel free to message me on Udemy.

The order to follow on my Udemy courses

Comprehensive guide to Financial Markets, Investing and Trading

Options Trading Beginners Bundle (3-course Bundle)

Advanced Options Concepts

Options spreads and credit spreads Bundle

Technical analysis and Chart reading Bundle

After this, the order does not matter. You can take any of the courses as per your interest.

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