Hey everyone! Shawn Here we're training and today we're going to go over volume and why it's so important that active traders. So volume is a measure of how many shares of stock is traded within a certain time period. For every buyer, there is a seller and when a buyer and a seller agree on a price, there is a transaction and that transaction goes towards the volume count. As the traders, we like to see a decent on a daily average of volume because we need the quiddity in order to get in and out of stocks without any issues.

I Personally like the trade stocks with at least 750 thousand an average daily volume or more. When you have a lack of liquidity or a lack of volume you can run into large spreads and send bit ask which means you're more likely to experience with each and not get the fills that you want. Now the reason volume is so important. the follow is because it confirms the price action you are seen For example, when you're looking for a breakout of a bull flag or a channel.

The best way to confirm that this breakout is for real is whether or not volume showed up to confirm the move. meaning there was a lot of other traders watching for the same thing you were and when it happened when it broke out of the pattern everyone started to pile in and volume spikes but will also happen if the stock breaks out over a big level is we will see going from shorts or Long's depending on the breakout. Direction stopping out on their position which will increase the volume as well. This increase in volume is a telltale sign that the breakout is confirmed and the stock is mostly going to keep moving in that direction.

However, there are traps that happened on breakouts like when a stock breaks out over a big level and it's quickly brought down and closes below that level. That's a bear trap and a false breakout. And if you had gotten long then you need to look at exiting the trade because chances are it's going back down. So let's check out an example of a blind breakout here.

We had a couple days ago lumber liquidators so they had some action in the pre market and there's a news calles on it and as you can see we had a strong opening track on really good volume here and what caught my attention was this consolidation pattern. Up here we are holding the level with a defined descending trendline here. I Tested it one, two, three, four a handful of times here before it finally broke out. Now when it broke out, what you want to be looking for is this right here.

falling volume picked up so we had this strong volume on the opening drive and then look at this volume. dried up on the consolidation and was waiting for the breakout right here. when it did and volume pick back up and shares prices kept going. I Mean if you were able to get in on this candle here, you could have easily made over a point on this trade.

So this is. This is an ideal setup. You know, very clean, easy to manage trade. You would have had your stop down here below the pivot level and entry would have been either on the close of this candle or as it broke through and you saw volume picking up.

So this is a really clean set up. Volume confirm the move which is whenever you're trading a breakout you that's the first thing you want to look for is for volume falling coming in is the is the tape picking up speed. These these factors will help you confirm the breakout and will also increase the probability that the breakout will be successful. So that was a really clean trade.

Easy one to take. Now this will happen as nicely as this one did every time. But breakouts on buying my generally high probability trades and they these are setups that we teach in our courses. They're really good ones to learn, so that's volume.

That's how you can implement it into your trading. If you have any questions, leave us a message in the comments below. Alright, see you guys next time. Oh hey, I Didn't see you there while I was just working on the dream board for my next home run trade.

Hopefully it comes soon. Until then, Make sure you subscribe to get email alerts anytime. I Go live or upload new videos. Until then, happy surfing!.