I am not sure if you are willing to learn or just asking questions like always.. but I have a heart to explain so here is a perfect example that suits here...
see a chart of AUROPHARMA couple of days back... everything was in downtrend right?
see the chart... and look at the volume of 28th Jan (highest since July 09), it was a Red close bar... what would you do in this scenario? Ofcourse short going by the trend all the indicators are telling to short as well..... not even VSA captured this move as the bar spread was not very big and it was not an attempt to fall according to VSA...
dull money shorted and booked their longs in panic... what happened?
it took only 5 days it met the target and see the volume the day it met the target line... once again above 50DMA... dull money might again feel that ohhh this stock is a star and buy again.. what happen next a correction as rally is completed and exact 50% correction of the quick bull move.
This is called Wolfe Wave... so trend is NOT always your friend... its the dominant wave which is your friend and you need to identify which wave is the dominant one rather than going blindly by the trend... but one need a Lion's Heart to go long in such falling market.
Hope I was able to tell you the importance of Volume and its role in Wolfe Wave.
see a chart of AUROPHARMA couple of days back... everything was in downtrend right?
![](http://i48.tinypic.com/2m29ke1.png)
see the chart... and look at the volume of 28th Jan (highest since July 09), it was a Red close bar... what would you do in this scenario? Ofcourse short going by the trend all the indicators are telling to short as well..... not even VSA captured this move as the bar spread was not very big and it was not an attempt to fall according to VSA...
dull money shorted and booked their longs in panic... what happened?
it took only 5 days it met the target and see the volume the day it met the target line... once again above 50DMA... dull money might again feel that ohhh this stock is a star and buy again.. what happen next a correction as rally is completed and exact 50% correction of the quick bull move.
This is called Wolfe Wave... so trend is NOT always your friend... its the dominant wave which is your friend and you need to identify which wave is the dominant one rather than going blindly by the trend... but one need a Lion's Heart to go long in such falling market.
Hope I was able to tell you the importance of Volume and its role in Wolfe Wave.