THE VOLUME FORECAST
Hello, friends! The highly popular Volume Forecast indicator just got even better! Our team was flooded with messages from clients sharing their stories on how the Volume Forecast indicator has totally transformed their trading in a positive manner, but many said that if we could create the same indicator for NON-GAP stocks - it would truly blow minds. True to ScriptsToTrade fashion and never backing away from a challenge - that is EXACTLY what our team did! Our team has had many requests to create a guide on how we use the Volume Forecast indicator - and what better of a time to do so than now with the markets FINALLY heating up! Below you will find charts and ideas to use as templates in your own volume journey. Whether you are trying to predict a massive SQUEEZE or you are trying to HAMMER the short, this indicator (pioneered by @team3dstocks) is a MUST have for every serious trader. We are also excited to show you how we use the NEW UPDATE - specifically for NON-GAP stocks, now with the abilility to start the Volume Forecast from ANYWHERE, and why this is important. Follow along as we go through some setups!
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HOW DO I KNOW IF I HAVE THE NEW UPDATE?
All Volume Forecast users have the update automatically. To confirm that your indicator has been updated, please follow these steps.
1.) Remove the Volume Forecast Indicator From Your Chart
1.) Remove the Volume Forecast Indicator From Your Chart
2.) Log out of Tradingview
3.) Close Tradingview (or website tab)
4.) Open Tradingview
5.) Add the Volume Forecast Script back to your charts
3.) Close Tradingview (or website tab)
4.) Open Tradingview
5.) Add the Volume Forecast Script back to your charts
CONGRATS! You're all updated.
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WHAT IS THE NEW UPDATE?
First things first, please see the pictures below on how to use each Volume Forecast.
1.) To continue using the original Volume Forecast for stocks in the $2-$25 price range that have gapped 19% or greater from the previous close, simply load the indicator onto your charts and it will continue to work as designed automatically.
2.) To use the new NON-GAP Volume forecast for stocks in the $2-$25 price range that HAVE NOT gapped at least 19% from previous close, please open the settings tab. Under "inputs" you will see an option that says "Version 2.0 (No Gap)". Click this box so there is a blue checkmark inside of it. Then below you may enter todays date, and the time you want to start the Volume Forecast! To go back to the original Volume Forecast for gapping stocks, simply uncheck the box and hit "ok" below.
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HOW DO I USE THE NEW UPDATE?
Now for the fun part! We would like to preface this section with a simple reminder. Using the original Volume Forecast for stocks that have gapped 19% or greater from the previous close is a very important starting point. This is because to successfully short a stock, there MUST be room for the stock to collapse. This is why we included the 19% gap filter in the first place - which is to protect traders from shorting stocks that did not have room to fall. However, there are many intraday runners that do not gap and we wanted to give the community the opportunity to use the amazing Volume Forecast technology on these stocks as well. PLEASE BE ADVISED - the Volume Forecast indicator is not a buy/sell signal. As you will see below the indicator is an immensely insightful tool that allows you to objectively observe the TRUE agenda within a stock!
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ORIGINAL VOLUME FORECAST
$HOOK FEB 16TH, 2022 (Example Of Confirming Strength)
$HOOK started with an after hours high of $2.17. Upon market open, price immediately tested this level and failed, leading traders to believe the top may be in. What may have been even more convincing is the two additional failed breaks at this level, with the last attempt being a lower high. If traders were just making decisions based on PRICE ALONE, they surely would have assumed that this stock is weak and will roll over. This is where the Volume Forecast indicator can truly be game changing. We know that from a volume standpoint, demand was high all day. In fact, if you look at the volume table (Top Right), every time frame had an increase in % (Demand) from the previous one. This is showing a clear example that although price may not be bullish at this time, volume is telling a different story! Price then breaks this level that short sellers are surely using as risk, and breaks into NHOD. Without the Volume Forecast, we woluld be blind to this agenda. We can also see the yellow arrows (Abnormal Volume) give a clear signal that this may be the breakout. This is SUPERIOR VOLUME ANALYSIS!
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ORIGINAL VOLUME FORECAST
ORIGINAL VOLUME FORECAST
$OEG MARCH 8TH, 2022 (Example Of Confirming Weakness)
This is an example of how traders can use the Volume Forecast to confirm weakness, which ultimately provides a higher level of safety and confidence when going short. $OEG opens and puts in a lower high. But what makes us sure that this stock is ACTUALLY weak, and not trying to simply convince us the stock is weak and then squeeze us later? Volume. 15 minutes after the market open the Volume Forecast goes to work and immediately shows that volume is not close to breaking the Volume Forecast. Note: When the "Live Analyzer" reaches 100%, the Volume Forecast will give a signal soon after. To add further confidence, the first three time frames have less volume demand than the previous time frame. Seeing a decrease in volume across multiple time frames, AND seeing price action weakness is exactly what we should be looking for. Make sure to use the Volume Forecast on all small cap stocks in your watchlist. Once you understand what the volume is doing, you can determine how to trade the stock.
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STARTING VOLUME FORECAST FROM RECENT HIGH
STARTING VOLUME FORECAST FROM RECENT HIGH
$IMPP March 7th, 2022
Now that we have established how to use the Volume Forecast to identify demand or lack thereof from market open, lets explore another method to utilize this tool which is starting the Volume Forecast from high of the day to determine if the stock has high volume (demand) or low volume (lack of demand), which can help save traders from being squeezed! Lets use $IMPP on 3/7 as an example:
$IMPP opens and rips to a high of $7.98. Lets assume your short strategy calls for you to short this stock. Most traders are looking at price levels to determine how the stock is reacting after they went short. This is useful, but there is a very important piece that is missing - VOLUME. As you can see the Volume Forecast broke and nearly called the bottom of selling pressure - a very impressive feat. This signal alone lets short sellers know that although their price analysis has called for a short, volume analysis has yet to confirm weakness. $IMPP starts to trend towards the high of day but puts in a lower high. This is not an accident as it helps enforce the idea that the stock is weak and the top is in. To further trap short sellers, price temporarily breaks outside of the trendline which will give the ultimate confidence boost to short sellers to attack. They are thinking, 1.) Lower High and 2.) break of floor. As you can see, if you follow price alone you do not have the full picture. Remember the volume forecast breaking in the morning? The agenda is crystal clear. Put in a high, then a lower high, and then break the floor. This gives short sellers multiple points of confirmation, and at this exact moment - the SQUEEZE to high of day starts! Right when shorts are fully loaded. The Volume Forecast tool let us know that demand was high, and to be cautious when shorting!
Let's do another one
$ENSV March 8th, 2022
$ENSV looks strikingly similar to $IMPP above, doesnt it? What if we told you that these patterns happen on a WEEKLY basis, and now that traders have access to the Volume Forecast they will see them more and more. We have annotated another epic chart for study purposes. $ENSV put in a high of $7.48, and then two very distinguished lower highs. Once again, this is NOT on accident. It is to enforce the belief that the stock is weak, as most traders can only see PRICE action. To lure in short sellers further, price breaks the floor from premarket. At this point we now have 1.) A series of lower highs 2.) a floor break. This is multiple points of confirmation that a short seller needs to attack the stock. But wait - dont forget the Volume Forecast! This tool can help identify the hidden agenda. Volume Forecast breaks and selling stops shortly after. This is the first real sign that something is not right when trying to fade a stock. Price starts to grind higher and then EXPLODES to the upside, punishing the trapped shorts who are likely using the lower highs, and previous high of day as risk. We then see new highs. If these chart get under your skin and is an issue that you are struggling with - you are NOT alone! These scenarios are carefully manufactured by 'riggers' - those who attempt to trap longs and shorts in different chart scenarios and reap the rewards of stopping them out.
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NON GAP VF SETUPS
$CYRN March 8th, 2022
Another way to use the Volume Forecast is to hunt for strong volume BEFORE the stock goes parabolic. This is important because as traders we must identify if the stock we are looking to short is feasible from a volume standpoint. Too much volume and it may be the equivalent of stepping in front of a train!
Thanks for stopping in! We hope the information and examples contained within will help you identify KEY patterns and setups in your own trading. If you liked this blog, please let us know on twitter and if you would like to get access to the Volume Forecast indicator and experience superior volume analysis, please find the link below. Happy Trading!