Note: Market trading involves staggering amounts of risk. This article is intended for entertainment purposes only and is not to be taken as advice for what to do with your money! There are risks in market trading that you must be aware of before you ever enter any market and this article will not go into all of those risks. Inform yourself before spending any money on investments or market trading and never invest more than you can afford to lose!
So, you feel a little more comfortable with the players of this game. We’ve talked some about how to score in this game, and what candlesticks on the field are telling us. Let’s talk about the field itself for a little bit. Most specifically, we’re going to go into the one part of the scoreboard that we haven’t gone into. Volume.
The volume number (V) indicates how many Bitcoins were traded in that hour. Volume doesn’t take into account buy orders or sell orders, it is just a total of how many Bitcoin were bought or sold, in this particular hour; 372.87. Some Market Indexes will represent Volume in the amount of trades made. Whether bought or sold this number essentially tells you the same thing as in our example. Volume, like the rest of the ‘scores’ on the board are an indicator for the Bitcoin market. It is, like the candlesticks, a tool a Bitcoin trader will use to help them make predictions on which way the market is going to go in a given time. Lets look at the field we’ve used from previous articles:
The dark grey bars on the bottom of the graph represent, visually, the amount of volume in that hour of trading. The candlestick I have selected is light grey because it is highlighted. Each time there is a volume spike, the price tends to move. These moves are significant because they involve lots of trades, which means the Bulls and Bears are getting active. Market volume depends on many factors but some of the most important are; news, time of day, and volume from previous hours, days, months, and even years. Volume give traders a lot of information but most specifically it tells them the strength of the market they’re looking into. If there is a lot of volume there is a lot of volatility which make for a ripe field of play for the Bulls and Bears. When the volume is turned up, the Bulls and Bears start dancing. When the Bulls and Bears are dancing, the price is going to move.
Volume can tell us what to buy in a market, but the most important thing that volume indicates to us is when to buy. Historical trends in volume tell us when the market tends to be strongest, and when the market is strong, whether you’re are a Bull or a Bear, you want to be playing. Of course, that doesn’t mean there isn’t games during low volume, as well. Volume can tell us when to get into a market (or onto the field of play) and when to get out. Used in conjunction with candlesticks this helps us begin to develop tools of ‘technical analysis‘ in the Bitcoin market that help us keep our money and make profits while in the game. We will go more into technical analysis and other tools of market trading in future articles.
Now, that more of the field of play has been revealed to you, how about turn your attention to a less strenuous and more entertaining bitcoin casino game of your choice?