In the financial cosmos, the concept of market trajectory can be likened to Newton's First Law of Motion—an object will remain at rest or in uniform motion unless acted upon by an external force. In market terms, a decrement in sell-side activities during a bearish phase equates to reduced gravitational pull, propelling the market towards bullish tendencies due to the absence of selling pressure. Conversely, a paucity of buying during an upward trajectory can be equated to a reduction in thrust, thus making the market gravitate towards a bearish stance due to a lack of demand.
These conditions manifest as financial inertia—the path of least resistance in market dynamics. Just as it takes an external force to alter the state of a physical object, a surge in buy-side activities on bullish days (or bars) is required to propel the market upwards, effectively overcoming its inertial state. Similarly, an increase in selling on bearish days (or bars) exerts a downward force strong enough to disrupt the market's equilibrium, driving it into a decline.
In the absence of these external forces—represented by no selling pressure (lack of supply) on downtrends and no demand (lack of buying) on uptrends—the market will remain in a state of equilibrium, seeking to maintain its current trajectory.
Volume functions as the equivalent of a "pressure gauge" in thermodynamic systems, offering insights into the strategic actions of institutional investors and their algorithmic trading mechanisms. Similar to understanding the principles of pressure and force in physics, a comprehensive grasp of Volume Spread Analysis (VSA) serves as a crucial parameter that can negate informational asymmetry. Without volume as a gauge to reveal the vectors of market forces, we often find ourselves in a disadvantaged position, akin to navigating in a vacuum where Newtonian laws are void.
The algorithmic engines that manipulate market behavior are billion-dollar operations that operate in a state of perpetual motion, devoid of emotional or biological limitations. They function akin to closed thermodynamic systems, aiming to maximize entropy or, in financial terms, to extract every last unit of profitability from the market participants. To counteract these computational leviathans, one must deploy a nuanced understanding of volume as a key variable.
At present, my targeted trading zone aligns optimally with periods of high-impact financial news—indicated by red markers—and corresponds to the market's most active diurnal intervals. This strategic alignment employs volume as a pivotal variable, much like utilizing pressure metrics to predict changes in thermodynamic systems.
Time will tell. Patience is the only way.
These conditions manifest as financial inertia—the path of least resistance in market dynamics. Just as it takes an external force to alter the state of a physical object, a surge in buy-side activities on bullish days (or bars) is required to propel the market upwards, effectively overcoming its inertial state. Similarly, an increase in selling on bearish days (or bars) exerts a downward force strong enough to disrupt the market's equilibrium, driving it into a decline.
In the absence of these external forces—represented by no selling pressure (lack of supply) on downtrends and no demand (lack of buying) on uptrends—the market will remain in a state of equilibrium, seeking to maintain its current trajectory.
Volume functions as the equivalent of a "pressure gauge" in thermodynamic systems, offering insights into the strategic actions of institutional investors and their algorithmic trading mechanisms. Similar to understanding the principles of pressure and force in physics, a comprehensive grasp of Volume Spread Analysis (VSA) serves as a crucial parameter that can negate informational asymmetry. Without volume as a gauge to reveal the vectors of market forces, we often find ourselves in a disadvantaged position, akin to navigating in a vacuum where Newtonian laws are void.
The algorithmic engines that manipulate market behavior are billion-dollar operations that operate in a state of perpetual motion, devoid of emotional or biological limitations. They function akin to closed thermodynamic systems, aiming to maximize entropy or, in financial terms, to extract every last unit of profitability from the market participants. To counteract these computational leviathans, one must deploy a nuanced understanding of volume as a key variable.
At present, my targeted trading zone aligns optimally with periods of high-impact financial news—indicated by red markers—and corresponds to the market's most active diurnal intervals. This strategic alignment employs volume as a pivotal variable, much like utilizing pressure metrics to predict changes in thermodynamic systems.
Time will tell. Patience is the only way.