Abstract
Research background:When we start looking for tools that could give a trader a certain trading advantage, we will certainly come across the problem of analysing the trading volume. This is an advanced type of analysis where the primary price chart of the underlying asset is not analysed, but traders focus on the volume of trades that have been executed at certain price levels. Although it may seem like an innovative method, this type of analysis has been used for several decades. In our article, we elaborated the theoretical basis of the analysis of trading volume as a tool for predicting the movement of prices of financial instruments.Purpose of the article:The aim of our article is to explore the possibilities, methods and procedures of analysis of trading volumes and the possibilities of their use in maximizing earnings from trading of financial instruments.Methods:We used formal methods such as analysis and synthesis of theoretical findings and others.Findings & Value added:Based on the study of the analysis and synthesis of theoretical data, we identified and described the possibilities of using the analysis of trading volume in the process of predicting the price movements of financial instruments. We consider the aim of the article to be fulfilled and we believe that it will be a valuable contribution in the field of research on this issue.
Highlights
In a deeper study of the methods of analysis used today in the financial market, we will undoubtedly come across efforts to use the analysis of trading volumes as a tool to predict future price movements of financial instruments
Based on the study of the analysis and synthesis of theoretical data in the subject area, we can say that the idea of analysing trading volumes depending on price levels through the volume profile is logically based on the Steidlmayer market profile itself
The market profile does not analyse the trading volume, it focuses on the structure of the market and its price development over time
Summary
In a deeper study of the methods of analysis used today in the financial market, we will undoubtedly come across efforts to use the analysis of trading volumes as a tool to predict future price movements of financial instruments. This early derivative trade was carried out by the philosopher Thales of Miletus (624 BC - 548 BC). His goal was to prove that using reason can get rich Based on his knowledge of astronomy, he assumed a rich olive harvest, so he bought the option to rent olive presses. In the modern world of information technology, investors and traders have a choice of a wide range of financial assets, instruments and their derivatives, as well as a large number of procedures and methods that help them predict their price movements [1, 2]. An integral part of profitable trading is the effective identification of risks, their management and minimization of their potential impact [3,4,5,6]
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