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Entries in candlestick charts (14)

TechniTrader teaches TC2000 Leading Indicator "Time Segmented Volume"

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. 

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The TC2000 Leading Indicator "Time Segmented Volume" TSV 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 HFTs. Dark Pools are the giant Buy Side Institutions who control vast quantities of assets, and use off-exchange venues for most of their activity.

Time Segmented Volume is one of the few indicators that reveals Dark Pool activity PRIOR to the HFT sudden runs, gaps, and huge candles that follow Dark Pool accumulation.

Time Segmented Volume 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 TSV forms on a regular basis.

TC2000 stock chart showing Time Segmented Volume Indicator - TechniTrader

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 and has ticked up on the down sell day. This is a contrarian pattern that frequently forms on TSV during momentum selling.

This contrarian pattern warns Retail Traders of the following 3 things:

  1. If you are Selling Short, it is time to exit the trade.
  2. Do not attempt to Sell Short, as the stock is about to reverse.
  3. Prepare for upside momentum action.

This is invaluable information that helps Traders exit just before a big bounce or reversal, and it tells them ahead of time to prepare for an upside Momentum Run.

The TC2000 Leading Indicator "Time Segmented Volume" line crosses over its subordinate indicator which is an Exponential Moving Average EMA, signaling again early that the stock is going to bolt upward with momentum.

TC2000 stock chart showing Time Segmented Volume Indicator - TechniTrader

The stock runs 99 points upward before it has another TSV spike to the top of the chart, this time warning that a selling for profit mode is about to start.

The stock ran with Momentum Runs that continued upward over a month, with minor profit taking. This provided several opportunities for Day, Swing, and Momentum Traders to enjoy great gains.  

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Summary

Learning to interpret Time Segmented Volume is important for our modern automated marketplace. It is an excellent indicator with numerous patterns that are easy to learn and quickly identify. The key is understanding what each pattern represents.

Time Segmented Volume is able to reveal the following information:

  1. Giant Institution Dark Pool Quiet Accumulation, as well as Quiet Rotation™ and distribution patterns.
  2. It will show if the buying is sustainable, based on whether it is smaller lots or larger lots buying.
  3. Extreme conditions in Volume and Price, which will reverse the trend up or down.
  4. Consistency of Volume over time, allowing longer holds for short term trades.
  5. When to prepare for an Entry or Exit, a day to few days ahead of a reversal run.

Visit the Learning Center and watch a wide variety of Webinars, to experience for yourself the excellence of TechniTrader education. There is a Library for TC2000 Users.

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Trade Wisely,

Martha Stokes CMT

Chartered Market Technician
Instructor and Developer of TechniTrader Stock & Option Market Courses

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