Volume Flow Analysis

 Volume Flow Analysis:
The three main qualities I look for are
1. Directional,
2. Smoothness and
3. Divergence relationship

1 - Directional
         When orders go through the market they cause volume flow to move in that direction. Imagine yourself willing to click buy over and over every few seconds for an hour or two - why would you ever put yourself at risk like that? Because you are committed to buying. Directional movements over an hour or more indicate market commitment.
2. Smoothness
          When orders are entering the market as fast as they can fill then Volume flow becomes smooth in that direction. When traders feel they have to fill "quickly" they send larger orders through in order to get filled. When Volume Flow becomes Smooth over a length of time that indicates Confidence.
Note: When volume flow is both Smooth and Directional this indicates trading is confident and committed and in that direction. Without Volume Flow Smoothness price tends to stop being directional as soon as volume flow stops being directional.
3. Divergence Relationship
          This one is the most comprehensive. When there is a divergence between price and Volume flow you must first look at the overall Market Conditions to determine which is leading: Volume or Price.
---- Traders opening orders from quality reasons to trade would imply that you are looking to see the footprints of Volume moving through the market - Volume is leading: Look for Volume to push in a direction while price diverges, or Look for directional moves in price that are unsupported by the movement of volume flow.
---- Traders are in and holding pattern and/or markets are trying to trap traders in to get a Squeeze going. You are looking to see price advance without winners taking profits or the losers stopping out - Price is leading: Look for price to grind further while volume flow stays flat or look for times where volume flow indicates one of the side got spooked and dumped their position.
These conditions require more than one indicator and it should be second nature to traders to know which is which.