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Spotting reversals with high volume nodes (Crude)

High volume nodes (also know as volume clusters) are the key to catching market reversals early. Not all reversals are identified by high volume nodes but a high percentage of them are. If you aren’t currently looking at high volume node in trading, then you really should start.

The interesting thing about high volume nodes, is that they do NOT represent an increase in trading activity.

Let’s say that your market is trading 1000 contracts a minute. 5 minutes go by and there’s 5,000 contracts traded but no high volume nodes. Then in the next 5 minutes we see a cluster of high volume nodes – but we only traded 5,000 contracts. Volume was the same but this time we got high volume nodes. How is that possible?

In this video, we take a look at a couple of different types of high volume nodes that cause reversals. We look at headfakes (false breakouts) and the way that news driven moves typically end.

  • PK

    Great video. I myself only trade these reversals the moment they occur, i never wait for the market to reverse first – i like to catch the turn. That way my risk is small.

    You are right about not trying to catch each and everyone of these “high volume nodes”, as you call them. It doesn’t necessarily mean the market will always turn. That is why I use a filter that helps me trade only the ones with a high probability of causing a good reversal.

    • Alexander Schiefert

      Dear PK,
      would you mind sharing which filter you use to identify higher probability reversals?


      • Peter Davies

        The only thing I do different on Crude is set the circle tuner to 3 or 4. Other than that, standard settings are fine.