TradingView’s Most Underrated Volume Confirmation Tool

Summary

This video tutorial teaches traders how to use the Volume Channel Flow trading strategy. It explains how to set up indicators like the Volume Channel Flow and Rune Oscillator on platforms like TradingView, and how to interpret signals for both buy and sell trades. The strategy focuses on using volume flow above or below the channel to identify buying pressure or weakness, with stop-losses set based on trend changes. The video also covers managing risk with a 1:1.5 risk/reward ratio, and offers tips on avoiding fake breakouts for more accurate trades.

Takeaways

• 😀 Volume is a critical indicator in trading as it shows the real intent behind price movements.
• 😀 The Volume Channel Flow trading indicator helps spot strong buying pressure, weakness, or trend continuation by analyzing volume in relation to its channel.
• 😀 When volume flows above the channel, it signals strong buying pressure and possible trend continuation.
• 😀 When volume drops below the channel, it warns of potential weakness or market distribution.
• 😀 Volume compression within the channel suggests waiting and not trading yet, as it indicates a lack of momentum.
• 😀 The Volume Channel Flow indicator helps confirm trade signals, preventing fake breakouts.
• 😀 This strategy works across all trading assets (forex, crypto, stocks, indices) and timeframes (intraday or swing).
• 😀 For a buy trade: The volume indicator gives a buy signal, the market forms a bullish candle, and the oscillator is green and above zero.
• 😀 For a sell trade: The volume indicator gives a sell signal, the market forms a bearish candle, and the oscillator is red and below zero.
• 😀 Always use a 1:1.5 risk-reward ratio and place stop loss at the trend change of the Channel Flow line for optimal trade management.

Q & A

What is the primary purpose of the volume channel flow trading indicator?

The volume channel flow trading indicator helps traders assess the real intent behind price movements by showing whether volume is supporting the price direction. When volume flows above the channel, it signals strong buying pressure and trend continuation, while volume dropping below the channel suggests weakness or distribution.

How does the volume channel flow indicator help with fake breakouts?

The real power of the volume channel flow indicator is its ability to confirm momentum. It helps traders spot fake breakouts by confirming whether the volume is supporting a true price movement, thus reducing the risk of entering trades based on misleading price action.

Which markets can the volume channel flow indicator be used on?

The volume channel flow indicator can be applied to various markets, including forex, crypto, stocks, and indices. It works on any time frame, making it suitable for both intraday and swing traders.

What is the risk-to-reward ratio recommended when placing trades with this strategy?

The recommended risk-to-reward ratio is 1:1.5. Traders should place their stop loss at the trend change of the channel flow line and aim for a 1.5 times reward compared to their risk.

What other tool is recommended to use alongside the volume channel flow indicator?

Alongside the volume channel flow indicator, it is recommended to use the Rune Oscillator. This tool helps confirm buy or sell signals by showing whether the oscillator line is green (for buy signals) or red (for sell signals), and whether it is above or below the zero level.

When should a buy order be placed according to the strategy?

A buy order should be placed when the volume channel flow indicator gives a buy signal, the market creates a bullish candle for confirmation, and the Rune Oscillator line is green and above the zero level.

When should a sell order be placed in this strategy?

A sell order should be placed when the volume channel flow indicator gives a sell signal, the market creates a bearish candle for confirmation, and the Rune Oscillator line is red and below the zero level.

What happens if a trade hits the stop-loss?

If a trade hits the stop-loss, the trader should move on to the next trade. The strategy recommends staying disciplined and not dwelling on a single loss.

How can traders verify the success of their trades in this strategy?

Traders can verify the success of their trades by monitoring the market's movement after placing their orders. If the conditions for entering the trade are met (volume channel flow signal, candle confirmation, and Rune Oscillator line), the trades should run in profit, as shown in the video examples.

What should traders do if they have questions about the strategy?

Traders are encouraged to leave their questions in the comments section of the video, where the content creator will try their best to provide answers and clarifications.