DTT Buzz

The Stock trader, Options trader, and Day trader all know the accompanying volume plays an important role in all price patterns. In the head and shoulders pattern, the head or second peak should take place on lighter volume than the left shoulder. It doesn't happen this way everytime, but it's a strong tendency and an early warning sign of diminishing buying pressure. The right shoulder or third peak is where the most important volume signal occurs. Here the volume should be noticeably lighter than either the left should or the head, and should expand on the breaking of the neckline, decline during the return move, and expand again when the return move is over.

Volume is less critical during the completion of market tops, but volume does have to increase at some point, if the downtrend is to continue.

Watch our experts point out price pattern reversals in our Live Trading Room.

Call our toll free number 1-866-232-9872 today to sign up for one of our Premium Trials. You can choose either 14 days for $29.95 or 30 days for $49.95.