Volume Shocker is a smart money flow scanner to identify where the smart money is parked in the first 1 hour of trading. When we talk about smart money, it generally refers institutions / insiders who knows better information than the general Trading/Investing crowd.
Ideally speaking, most of the smart money holding period ranges anywhere between few days and few weeks or even months. When comes to futures trading we use first 1 hour volume and open interest to identify the smart money flow.
For ease of use, TRADEx users can identify the smart money flow by using Volume Shockers Scanner with yellow highlighter as shown below.
In Equity Derivative markets, if any of the stock futures first 1 hour turnover increases more than 300Cr to 800Cr range or more than that with greater open interest addition which is significantly higher from the last 30 days of first 1 hour turnover then possibly smart money role is there provided there is no news or event based speculation.
Because event based speculation attracts higher turnover. For Example
1)Political Events (Govt Policies, Election Results, Geo Political Events)
5) Grading the stocks by Rating Agencies/Brokers like CLSA, Moody’s
Apart from these speculative action, if a stock attracts huge turnover then smart money role is heavily involved there. Recent Examples are, Sunpharma made a short term bottom on 14th Aug 2017 where the turnover was 635 cr with significant open interest additions 7% – Long Buildup in the first 1 hour of trading. Volume traded in that first 1 hour was above 30 days average.
Another classical example is, LICHSGFIN made 24% Open Interest short addition in the first 1 hour of trading with 449Cr turnover which is greater than the 30 days average. Volumes happened in the first 1 hour is quite abnormal which indicates that smart shorts entered in the system with an average traded price of Rs696.63.
How to Scan for high volume/turnover?
Once you launch volume shockers screen by default you will get the list of stocks traded in the first 1 hour. Typically updates happens anywhere around 10.15a.m – 10.30a.m during the trading session. You can also use this information for post market analysis as well.
Further filtering can be done based on the symbol, turnover or Open Interest Interpretation.
Now to get the historical first 1 hour information you can click on the listed stock. Once you selected the stock you will get last 30 days of historical volume for the first 1 hour of trading.
How I can benefit from this Volume Shockers Scanner?
If you are a positional trader then Volume Shocker tool gives you a tremendous edge in identifying smart money behavior and also helps you to hedge your cash position if in case you have a position already in the equity market.
I am a Intraday Trader, can I take advantage of this tool?
No, This Volume Shockers tool is highly recommended and built for positional traders. Because most of the time market movement would have already been done by the smart money in the first 1 hour of trading. so intraday traders hardly benefit from the move.
Note : Nifty and Bank Nifty usually have high turnover (typically 1000Cr – 2000Cr in the first 1 hour of trading) as they are mostly active traded securities in derivative segment.
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