Volume Breakdown

The charts we stream live in the trading room have now the added functionality of seeing within the volume candle to show buying/ selling pressure.


The common term used in market parlance for the ability to do that is called Delta.


Delta takes out the guess work when it comes down to see how the market is moving on volumes.


Auction theory is fundamentally about the role played by buyers and sellers and volume breakdown helps to understand the role clearly.


Here's a chart which illustrates :


Buysellvol Volume Breakdown


The chart above has :


a) price in 5 minute candle sticks in the top pane

b) volume traded for that candle in the pane below

c) the next pane has a break up of that volume with the green candle showing the buy volume and the red candle showing the sell volume

d) the final pane below is the net of that buying and  selling volume or the difference between the two.


For day traders who want to make quick buying and selling decisions, a look at the volume candle can show if buyers are coming at critical levels or just ahead of important news events.


Also post event it can quickly put you on the right side of the market, just by observing the buying or selling pressure.