giorgio411

I think volume spread analysis has to be use with other elements of the market to have winning trades, some of those elements i have noticed include but am sure are not limited to the following, product type (equities, commodities,currency, bonds etc), days high, week high, month highs and lows, your brokers mark-ups especially in the retail forex market which i don't trade cos it's not very liquid. Market liquidity is also very important considering the fact that in commodities for example buyers can only offer a price that they are sure they can sell it for to manufacturers that was clearly displayed in the crude oil markets this year, at $4 or $147 a barrels demand dried up and they had no choice but to sell at a lower price. If you look at the open interest in october crude contract was 220,000 a month before contract expiration on expiration its was 23,000 contracts that tells you how much speculative trade exist on the up side or down side. When trading equities volume spread analysis has to be used with the call and put options contract volume and strike prices of those contracts. I also think since our volume (your trade volume) especially in the commodity market is part of the market it distorts your analysis for those trading on a short time frame. I would be glad if anyone corrects me on some my market opinions.