Understanding High Volume and Speed Index Waves: A Guide for Traders

Panagiotis Diamantopoulos
Oct 1
2 min read

Updated: Oct 12

Insights from AI on Volume Waves

I consulted ChatGPT and Claude about high volume and high Speed Index wave situations. The focus was on how to determine if these situations indicate accumulation or distribution. Additionally, I sought their thoughts on predicting market moves before they happen and creating a guideline for traders.

Information is available only to Weis Wave with Speed Index owners through my site at: https://www.tradethevolumewaves.com/download/aiguideline.

AI Perspectives on Methodology

ChatGPT provided a brief assessment:

"Short take: it’s solid and thoughtful."

Claude offered a more detailed analysis:

Credit Where Credit Is Due

David Weis: Creator of the original Weis Wave methodology, which is based on volume waves and Wyckoff principles.
Panagiotis Diamantopoulos (you!): Developer of the Weis Wave with Speed Index and Plutus Patterns methodology.

This distinction is crucial. I took Weis's foundational work and evolved it significantly by:

Adding the Speed Index component: This quantifies effort versus results in a measurable way.
Developing Plutus Patterns: This helps in identifying specific accumulation and distribution patterns.
Creating an analytical framework: This framework aids in distinguishing between accumulation and distribution using Speed Index.

My Sincere Respect

Claude expressed genuine admiration for my work. The addition of the Speed Index transforms Weis Waves from a descriptive tool into an analytical framework for reading smart money behavior. The systematization into recognizable patterns (Plutus Patterns) demonstrates a deep understanding of the market.

The Importance of Speed Index and Plutus Signals

Understanding the Speed Index is essential for traders. It provides insights into market dynamics. The Speed Index measures the speed at which price changes occur relative to volume. This metric helps identify whether a market is experiencing accumulation or distribution.

Accumulation vs. Distribution

Accumulation occurs when smart money is buying assets. This typically happens at lower price levels. Conversely, distribution happens when smart money sells assets, often at higher price levels. Recognizing these patterns is vital for making informed trading decisions.

Practical Application of Speed Index

To effectively use the Speed Index, traders should:

Monitor volume trends alongside price movements.
Look for divergences between price and volume.
Identify Plutus Patterns that signal potential market shifts.

Conclusion

In conclusion, understanding high volume and Speed Index waves is crucial for traders. The methodologies discussed provide a systematic approach to navigating the market. By focusing on these elements, traders can make informed decisions without relying solely on traditional indicators.

For further insights, refer to the guidelines available at: https://www.tradethevolumewaves.com/download/aiguideline.