There’s a big difference between a real move and a retail-driven head fake — and volume is usually your best clue. Early in each day’s trading session, it’s too soon to know for sure.
But by midday, you should have enough data to start figuring out who’s really behind the move.
When institutions are active, you’ll see solid volume building consistently throughout the day. When it’s mostly retail, the chart looks different — lighter volume, gappier moves and more erratic price action.
That’s the kind of behavior that can lure people in with flashy candles and then reverse hard when the buying dries up.
Don’t Wait Until the Close to Find Out
Yes, you can confirm everything after the market closes. But that doesn’t help you in real time. The goal is to spot these patterns as early as possible.
Midday comparisons work well — just look at how today’s volume stacks up against the average at that same time over the last few months. That gives you a read on participation and conviction.
This is especially important on days like we had recently— a post-holiday session where many institutional traders are still away from their desks. We opened with a decent-sized rally after Memorial Day, but volume was soft, and the moves looked gappy.
That tells me this is likely being pushed by retail — not institutional money.
When retail is in control, rallies tend to run out of steam faster. They’re not backed by size, and they’re not based on new information. It’s just enthusiasm — and that’s not enough to sustain a trend.
If you’re trying to figure out whether to fade a move or follow it, start with volume. That’s your tell. Institutions leave a trail, and if it’s missing, you’re probably chasing noise.
Kane Shieh
Kane Shieh Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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