How to Interpret Time Segmented Volume Indicator for Entries and Exits
The TC2000 Leading Indicator “Time Segmented Volume” TSV is unique in its formulation as a Volume Oscillator. Although there are a couple of other Volume Oscillators in the TC2000 indicator list, TSV is far superior due to the unusual inclusion of Price as well as Volume in the formula. With all 3 data pieces of market data in the formula and using a subordinate indicator, Technical Traders can see contrarian patterns that lead price sufficiently for earlier entries which result in higher profits for Swing and Momentum Trading. This is particularly beneficial during Bottoming and Topping Market Conditions.
This Indicator is similar to the Relative Strength Index RSI indicator in that it is NOT oscillating on highs and lows of Volume action. It oscillates on a comparative value of Volume over Time.
The period setting is the comparative value which is extremely useful, and not always available for most indicators. By using a comparative value of X number of days, Traders can set the period to the timeframe most useful for their personal Trading Style.
When set properly Time Segmented Volume leads as much as 2-4 days ahead of any Price and Time indicator. These include the persistently popular MACD and Stochastic Indicators which are lagging more and more, as the market becomes more automated with highly sophisticated multi-leg conditional orders for the Dark Pools and more complex algorithms for High Frequency Traders.
Dark Pools are the giant Buy Side Institutions who control vast quantities of assets, and use off-exchange venues for most of their activity. This indicator is one of the few that reveals Dark Pool activity PRIOR to the High Frequency Trader sudden runs, gaps, and huge candles that follow Dark Pool accumulation. In addition it is one of those indicators that has many different signal patterns, which tell traders different information and leads price.
The chart example below shows one of the numerous signal patterns which Time Segmented Volume forms on a regular basis.
The stock has been in a selling mode for several weeks. The run is momentum at the moment, which often encourages Retail Traders to Sell Short. However TSV has struck the bottom of its chart window, and has ticked up on the down sell day. This is a contrarian pattern that frequently forms on TSV during momentum selling.
Martha Stokes CMT
TechniTrader technical analysis using a TC2000 chart, courtesy of Worden Bros.
Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses
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