# Volume Questions - from "Master the Markets"



## pavilion103 (17 March 2011)

I would like to know the difference between a "test" and "stopping volume". 

It appears that both dip down and then close towards the high of the bar. 
-For a test, low volume means stregnth (no selling pressure)
- For stopping volume, very high volume means strength (buying pressure)

This confuses the heck out of me. 

Is the difference that "testing" trades into a period of previous lows (which had previously traded at high volume)?

Can a test occur at any stage of a trend, whereas stopping volume only occurs after a downtrend?

Thanks 


p.s. this is of course assuming a long trade (I know they can work both ways)


----------



## pavilion103 (17 March 2011)

I am also confused when a "shake out" occurs. 

On page 95 of the book it says:
- This chart shows an example of a ‘shake-out’, which is often seen at the end of a bear move

On page 96 of the book it says:
-This is usually seen after a bull move has been running for some time. You would expect higher prices after this event. A true selling climax looks the same as this shake out does; the big difference is that on a selling climax you will have a Bear Market behind you.

So does the shakeout occur after either a bull OR bear market?


----------



## Tanaka (17 March 2011)

Almost all terminology can be found at Investopedia:


Shakeout:   http://www.investopedia.com/terms/s/shakeout.asp


----------



## pavilion103 (17 March 2011)

Tanaka said:


> Almost all terminology can be found at Investopedia:
> 
> 
> Shakeout:   http://www.investopedia.com/terms/s/shakeout.asp




Thanks mate. I've been on it a bit before but haven't really utilised it as much as I should have. I guess for some of these I want more detail. Slowly working through it all.


----------



## tech/a (18 March 2011)

pavilion103 said:


> I would like to know the difference between a "test" and "stopping volume".
> 
> It appears that both dip down and then close towards the high of the bar.
> -For a test, low volume means stregnth (no selling pressure)
> ...




As an isolated bar you WILL be confused.
Add the next Bar and its close and the confusion should disappear.
If it closes below the Stopping Volume or Test bar then neither were correct.
One more bar gives "some" confirmation.



pavilion103 said:


> I am also confused when a "shake out" occurs.
> 
> On page 95 of the book it says:
> - This chart shows an example of a ‘shake-out’, which is often seen at the end of a bear move
> ...




Yes it can and during.


----------



## pavilion103 (18 March 2011)

tech/a said:


> As an isolated bar you WILL be confused.
> Add the next Bar and its close and the confusion should disappear.
> If it closes below the Stopping Volume or Test bar then neither were correct.
> One more bar gives "some" confirmation.
> ...




Bull or Bear market? or both?


----------



## tech/a (18 March 2011)

Both


----------



## pavilion103 (10 October 2011)

Another volume question. In regards to something I read in a Wyckoff book. 

If price breaks out of a range/consolidation on increased volume, generally how much volume is classed as excessive?

In Wyckoff it mentions how a steady increase in volume is best, otherwise it could be cliimactic volume. 

Is an increase from say 2M to 7M too extreme on a breakout? Or is it perfectly feasible that this increase could be strong demand (depending on background information)?


----------



## joea (10 October 2011)

pavilion103 said:


> Another volume question. In regards to something I read in a Wyckoff book.
> 
> If price breaks out of a range/consolidation on increased volume, generally how much volume is classed as excessive?
> 
> ...




Hi.
I have a A4 Trading Checklist. Covers entry, Risk & Trade Management, Exit and finally results. This is the paper work for reference .
On it I have a Volume multiplier in relation Top 20, 21 -50, 51-100, 101 - 200 and 201+. It is  in relation to a  moving average.
So basically the ratio increases as you head down the list. 1:1 >>> 3:1 >>> 5:1
Maybe you could compile  something similar. just a thought.
joea


----------



## Billyb (10 October 2011)

pavilion103 said:


> Another volume question. In regards to something I read in a Wyckoff book.
> 
> If price breaks out of a range/consolidation on increased volume, generally how much volume is classed as excessive?
> 
> ...




Eyeball it. There's no hard and fast rules. If there is a random breakout bar that has a huge amount of volume compared to the the rest of the bars in your view, and it doesn't close at the high then there could be some supply in that bar. But you need to look at the rest of the price and volume action as well and you may need to wait a few bars for more confirmation.


----------



## pavilion103 (10 October 2011)

Billyb said:


> Eyeball it. There's no hard and fast rules. If there is a random breakout bar that has a huge amount of volume compared to the the rest of the bars in your view, and it doesn't close at the high then there could be some supply in that bar. But you need to look at the rest of the price and volume action as well and you may need to wait a few bars for more confirmation.




Yeh, no doubt it will take more and more practice to discern these things. 

I think sometimes I ask questions knowing that no one can give me an exact answer, but always good to get people's thoughts.


----------



## TECM (13 October 2011)

pavilion103 said:


> Yeh, no doubt it will take more and more practice to discern these things.
> 
> I think sometimes I ask questions knowing that no one can give me an exact answer, but always good to get people's thoughts.




My Dad started teaching me about the markets when I was a very young girl.  The first thing he told me was to always watch the volume and I think that is incredibly important and a large part of my TA.  I think of it like this:

High volume high price = educated sellers selling to uneducated buyers
High volume low price = educated  buyers buying from uneducated sellers.

If I am long and see big volume coming in I prepared to exit.  If I see a volume spike I exit - they are usually the buyers who think they are going to miss out if they don't get long and they generally do - they get stuck with the stock the big boys offloaded.

I good sign of a low forming is huge volume on the low with an accumulation pattern forming - a slight drop off in volume and then a steady rise.  The MIB are taking advantage of those who just can't take any more pain.

I hope that helps a little.


----------



## nomore4s (13 October 2011)

pavilion103 said:


> Yeh, no doubt it will take more and more practice to discern these things.
> 
> I think sometimes I ask questions knowing that no one can give me an exact answer, but always good to get people's thoughts.




The best thing to keep in mind when applying VSA or Wyckoff principles is cause and effect.

The cause was high volume and what was the effect? Is there weakness in that bar? Or strength? What do the preceding bars tell you? or do you need to see how the next few bars react to attain more info?

There is a Wyckoff thread which is well worth going through if you haven't already. I personally prefer Wyckoff to VSA even though they are essentially the same thing because I just found that Wyckoff gave me a better overall understanding of what to look for.


----------



## pavilion103 (13 October 2011)

Thanks guys 

The last two posts have really hit the mark. 

Previously I was trading only breakouts and if volume was high (the higher the better) on an up move I'd enter, without realising that this is where the smart money is selling. 

But after reading Wyckoff I am looking for ultra high volume bars as an indication of professional activity. I've found this to be a massive revelation and it has transformed my way of thinking. It is easy to see why 90% of people lose money when they are doing the opposite of professionals. 


The other thing I'm really trying to discern is effort v results. This is a little more tricky for me because I am not quite sure how much confirmation is sufficient before entering a trade. I am playing around with some testing on my simulator so am trying to get a feel for it. Sometimes I enter too early and get stopped out. Other times I wait too long and miss a large portion of a good move.


----------



## TECM (13 October 2011)

pavilion103 said:


> Thanks guys
> 
> The last two posts have really hit the mark.
> 
> ...




Regarding your last two sentences I might be able to help you with that.  You can email me at emac.84@bigpond.com


----------



## tech/a (13 October 2011)

> High volume high price = educated sellers selling to uneducated buyers
> High volume low price = educated buyers buying from uneducated sellers.
> 
> If I am long and see big volume coming in I prepared to exit. If I see a volume spike I exit




Trueisms abound particularly in relation to volume.
While the above statement and strategy are valid they can be very wrong as well as very right.Myself and the rocket scientist are involved in testing as many trueisms as we can find results are less than encouraging with many not showing a statistical edge.

Simple questions like How much volume is High and How High is high in a price become a little more complex.

Which leads into No More 4's



> The best thing to keep in mind when applying VSA or Wyckoff principles is cause and effect.




VSA and Wycoff would have you believe that simple observation as stated above would give you a clear cut and statistical edge.Truth is recognising the "Cause and or effect" of volume isnt clear cut.

If we look at the chart below *TECM* who is quite right in observation---would have lost a motzza of "potential profit" yet *No More 4s*
if he read it as positve cause---would have done very well.


----------



## pavilion103 (13 October 2011)

I know there are no hard and fast rules that work 100% of the time. In that last example Tech, I would have thought the first big volume spike would have been a warning sign that supply is coming onto the market. Looks like I would have got it wrong.


----------



## TECM (13 October 2011)

tech/a said:


> Trueisms abound particularly in relation to volume.
> While the above statement and strategy are valid they can be very wrong as well as very right.Myself and the rocket scientist are involved in testing as many trueisms as we can find results are less than encouraging with many not showing a statistical edge.
> 
> Simple questions like How much volume is High and How High is high in a price become a little more complex.
> ...




I don't know what stock or index that is Tech/a and I can't see whether it came off an old high so it makes it a tad difficult for me to read properly.  However if it did come off a high there was a good lot of accumulation happening there and then tht big vol spike would have been a signal for me to watch.  It came off again and more volume came in and there was another smaller spike to flush out the last who could take no more pain then off it went making higher highs and higher lows - good trade.


----------



## motorway (13 October 2011)

pavilion103 said:


> I know there are no hard and fast rules that work 100% of the time. In that last example Tech, I would have thought the first big volume spike would have been a warning sign that supply is coming onto the market. Looks like I would have got it wrong.




And you could have been right.  Test Response .. note how Wyckoff is looking at what sellers and buyers achieve in their struggles ... Not getting totally blinded by the Volume.

The volume is saying LOOK HERE.. But in the context where from

How does what occurred before help define  that Bar ?
What was the stock doing as regards Volume and price activity ?
Time ? Duration ! How much happened so soon compared to before ..

Test response
The next bars are so important
what happens  ( the response )..
Half way points 
how much ground is given back ?
Time .. How long do the sellers control and what do they achieve
compared to that move up

Do not get focused on JUST VOLUME

Price  range , lifting power , Duration &  (then )VOLUME--> price range , lifting power etc ... This is a circle the importance flows  <====> both directions

test response
and the context ( what Wyckoff calls the Position )

You maybe right or wrong
But what ever you are the "SUBSEQUENT RESPONSE" will dynamically and continually reveal more ( RDW analogies of a moving/motion  picture like a film  that unfolds )

The other bar at the RHS
look left and look where from

Absorption or Distribution 
A danger point ( risk )
very important here to look at the other aspects not blinded by the volume
esp ground gained or lost in terms of volume and again time ( duration )

You are not right or wrong in an absolute sense
It is Just how long you take to adjust
How long it takes you to IDENTIFY ( not predict )

Motorway


----------



## pavilion103 (13 October 2011)

Brilliant post Motorway. Thank you. I will take my time working through that. 

I find that I read a Wyckoff book, then my eyes are opened and I oversee so much that I have been missing. I go back and apply it and I slowly forget things and then can become fixated on just looking for high/low volume. Then I go back and read it and my perspective is opened up again. 
So much to consider, not just volume!


----------



## pavilion103 (13 October 2011)

Coming back to volume......

I have some questions in regards to 'relative' volume.

Obviously we can see if volume has spiked in recent weeks but for me I am a little less sure when comparing volume over a few days. 
I think Tech/a mentioned something about bars being relevant for a period 3 days in terms of VSA (please don't quote me).

Is this the most important thing? For example:
11th Oct = 1,500,000
12th Oct = 2,100,000
13th Oct = 2,800,000

This would show a steady increase in volume. Depending on the type of up-move it could be said volume is building and the rise (result) may sustainable based on the volume (effort). A steady rise accompanied by this volume may be a good sign. 

If however prior to this volume was trading around 5,000,000 or even 7,000,000; is the fact that volume has risen steadily from 1.5M to 2.8M a good sign? or because it is so low compared to the volume of the past few weeks, this increase means little?


I had no idea how to word this post, but the last paragraph is the question I am asking. I hope someone can understand what I am trying to say, because no doubt it didn't quite come out right.


----------



## tech/a (13 October 2011)

In answer to your question above Pav.

Motorway has highlighted the key points to derive an answer




> You maybe right or wrong
> But what ever you are the* "SUBSEQUENT RESPONSE"* will dynamically and continually reveal more ( RDW analogies of a moving/motion picture like a film that unfolds )






> It is Just how long you take to adjust
> How long it takes you to IDENTIFY




Here is a working example that often occurs in my trading.
I will identify that something is happening it maybe exhaustion of a move.(SPI often)
I will place on a trade and move to B/E as soon as I can---its rare ill have a trade fall to stop from the get go but rare also for the trade to just power on in the direction Price action is indicating to me at the time of the first trade.

Its not un usual to close 2-4 trades before my trade gets moving and I can let it ride without concern for entry. ( 1 min Bars).
Can be true of any time frame.

AsIi have said many times
Keep placing yourself in front of the opportunity train and wait to be hit!


----------



## Lone Wolf (13 October 2011)

tech/a said:


> If we look at the chart below *TECM* who is quite right in observation---would have lost a motzza of "potential profit" yet *No More 4s*
> if he read it as positve cause---would have done very well.
> 
> View attachment 44867




Tech, on the last chart you posted you asked a question about what happens next on the right hand side. I'm interested. 

There is now weakness in the background - the bar at the previous high which thrust upwards but closed on its low with very high volume. After that price failed to make a new high and fell away. Now we have a ultra high volume up bar reaching into the previous area of selling. Although the last bar did manage to close on its high, I'd be wary of sellers.


----------



## tech/a (14 October 2011)

Lone Wolf said:


> Tech, on the last chart you posted you asked a question about what happens next on the right hand side. I'm interested.
> 
> There is now weakness in the background - the bar at the previous high which thrust upwards but closed on its low with very high volume. After that price failed to make a new high and fell away. Now we have a ultra high volume up bar reaching into the previous area of selling. Although the last bar did manage to close on its high, I'd be wary of sellers.




So on the the next chart as we investigate *VERY HIGH VOLUME* bars at *HISTORICAL HIGH LEVELS.*

*Click to expand*


----------



## pavilion103 (14 October 2011)

This is what I've been asking myself now when looking for potential trades. 

In terms of volume:

1. Is there excessive/very low volume?
2. Where is the stock in its lifecycle (including previous support/resistance)?
3. What is the behaviour of volume on up moves/down moves?
4. What is the effort v results?


----------



## tech/a (14 October 2011)

Well there is *NO resistance *to the left of this chart
What you see is what you have.

*So whats happening on the right hand edge?*


----------



## mr. jeff (14 October 2011)

tech/a said:


> Well there is *NO resistance *to the left of this chart
> What you see is what you have.
> 
> *So whats happening on the right hand edge?*




A climax of buying;
Would expect prices to fail to sustain these levels


----------



## pavilion103 (14 October 2011)

tech/a said:


> Well there is *NO resistance *to the left of this chart
> What you see is what you have.
> 
> *So whats happening on the right hand edge?*




I would have also thought a buying climax. There is no overhead resistance so it looks like a top. There are no locked in traders selling.


----------



## tech/a (14 October 2011)

mr. jeff said:


> A climax of buying;
> Would expect prices to fail to sustain these levels






pavilion103 said:


> I would have also thought a buying climax. There is no overhead resistance so it looks like a top. There are no locked in traders selling.




The point Ive been making is that it
isnt as clear cut as youd think--reading volume.
The Trueisms---in particular
_*High volume high price = educated sellers selling to uneducated buyers*_ are far from statistically significant.

*SO*
*Are you sure??*


----------



## TECM (14 October 2011)

tech/a said:


> So on the the next chart as we investigate *VERY HIGH VOLUME* bars at *HISTORICAL HIGH LEVELS.*
> 
> *Click to expand*
> 
> View attachment 44878




Tech can you tell me what stock that is so I can look it up on my own charts.

TIA


----------



## Lone Wolf (14 October 2011)

tech/a said:


> So on the the next chart as we investigate *VERY HIGH VOLUME* bars at *HISTORICAL HIGH LEVELS.*
> 
> *Click to expand*
> 
> View attachment 44878




Well now the move is looking parabolic and once again I would expect sellers. But having been wrong twice before, I'm likely to sit in front of the screen feeling depressed and asking myself - what are clues that volume is strength as opposed to selling?

On the first very high vol bar you could say that volume has entered after a long period of forming a base, signs of strength ahead?

Second very high vol bar - Very high volume closing on its high coming into an area of resistance. Maybe this was a good sign as you need high volume if you hope to overcome resistance?

Last very high vol bar - Volume has now fallen away to very low in comparison to the up bar. However, price hasn't fallen back much and is holding well. I could say go long at the top of the most recent low vol down bar, stop beneath the high vol up bar. But in reality I wouldn't trade it because I am obviously lost.

Edit: You posted more while I typed. I would have been stopped out (unless I only traded on the close of the bar). But I still hold that it looks ok for long... maybe.


----------



## tech/a (14 October 2011)

TECM said:


> Tech can you tell me what stock that is so I can look it up on my own charts.
> 
> TIA




At the end of the exercise.
I cant give you an unfair advantage.


----------



## tech/a (14 October 2011)

Lone Wolf said:


> Well now the move is looking parabolic and once again I would expect sellers. But having been wrong twice before, I'm likely to sit in front of the screen feeling depressed and asking myself - what are clues that volume is strength as opposed to selling?
> 
> On the first very high vol bar you could say that volume has entered after a long period of forming a base, signs of strength ahead?
> 
> ...




Yes I agree with all said.

This is my point.

Those who are making the point---we need more history and more infront of us to be able to read accurately---are I hope being satisfied by the inclusions I have posted in the last 2 posts.

*So is it getting easier?*
Are punters more accurate?

So So far
1 not so sure
1 its topped?
Any more?


----------



## TECM (14 October 2011)

tech/a said:


> At the end of the exercise.
> I cant give you an unfair advantage.




Ok that is fine but can you email it to me so that I can check it against my system just to see if I would still be in the trade not even looking at the volume.  LOL   emac.84@bigpond.com - be a sport  LOL


----------



## pavilion103 (14 October 2011)

Tech I am confused haha! But I understand your point. 

With these high volume bars it would ring alarm bells for me and I would trail my stop very tight, particularly because the trade would already be in large profit in the above case.

If I get stopped out then no big deal, I can always reenter.

When I'm unsure about something I find it's often better to just get out, take a breath and reasses as more info becomes available.


----------



## tech/a (14 October 2011)

TECM said:


> Ok that is fine but can you email it to me so that I can check it against my system just to see if I would still be in the trade not even looking at the volume.  LOL   emac.84@bigpond.com - be a sport  LOL




All will be revealed here.
Have patience.
(Yes I understand a system will have an algo which will see you in our out of a trade like this.)
Techtrader would have been still in the trade.
But this is on Volume analysis and you had made a statement refering to reading of volume.So far that statement (In this limited example) has proven ---less than accurate.

Your not game to add an opinion?


----------



## toocool (14 October 2011)

Lone Wolf said:


> On the first very high vol bar you could say that volume has entered after a long period of forming a base, signs of strength ahead?
> 
> Second very high vol bar - Very high volume closing on its high coming into an area of resistance. Maybe this was a good sign as you need high volume if you hope to overcome resistance?




This is how ive seen the first two bars, although only had comformation of the second very high bar in the last charts and was a little stumped at the time when the second one was at the very right on the shot.
If I was in the trade at the time I would have stuck to it with a stop at the low of the (second) high vol bar.

If I was in the trade up till the last action I would have put a stop at the low of the reversal bar (red one that makes the high) and got stop out the next day.

As for what i think comes next, It may climb back near the highs and start to fade away and have too much selling pressure from the buyers at the top, but I wouldnt buy here but wouldnt short either just now, but would put it on a watch list for one.

Edit, If one or more big volume bars keep coming  now then I do think its done.  This chart is giving more questions than answers for me the more I stare at it. crazy action here at the top though. 

Awsome chart, lesson and feedback here, this is why I love this site. Great work, and thanx for the effort.


----------



## TECM (14 October 2011)

tech/a said:


> All will be revealed here.
> Have patience.
> (Yes I understand a system will have an algo which will see you in our out of a trade like this.)
> Techtrader would have been still in the trade.
> ...




Yes of course I'm game to add an opinion - I just have got other things more pressing to do than watch for every update.   You should know by now that I'm no shrinking violet though you do seem to have it in for me but - too bad too sad.  

I believe volume tells a good story but is not the sole indicator anyone with any sense would trade off - and I never once said it was.

That chart whatever it is is far from a normal chart - if there is any such thing as a normal chart.  There have been a couple of volume spikes but not of great significance in the whole scheme of things and in isolation considering the other bars around them may well have just been a crossing.  To tell that you would have had to go to the market depth at the time. 

The earlier one where you started yesterday was very significant and would have seen me enter the trade provided all my other ducks were lined up and I was able to determine if it was a crossing which is not too difficult when you have the live data and current chart in front of you. 

The second one would have seen me exit but as the volume dropped off and price continued up provided all my ducks were lined up again I'd have gone back in.      

As I said I don't know what the chart is but I suspect all you are trying to do is to pick me to pieces because you had it in for me from day 1.  Doing that is counter productive.  I don't care but other traders may lose some benefit from that aspect of your attitude.  

To be honest I don't know how to post a chart here but I have seen that theory borne out repeatedly over the last 20 odd years.  Even recently a stock one of my brothers owned displayed that volume signal and I told him to sell it and lock in a great profit - he wanted more and of course down it came again.  Some months later it gradually groaned its way up again to an even higher profit and spiked again so I told him to sell and he didn't.  Now 6 months later it is worth less than he paid originally and he missed out on $$$$$$$'s profit as he could have had 2 excellent profits already locked in based on volume and my reading of the market depth.    

Not my problem - but that was a clear case of volume being a give away but my urging him to sell was based on other factors as well but the volume was what hit me between the eyes first.

Anyway enought of that - one chart is not enough to dispute my statement and as I said no one should buy/sell off volume anyway - it is just something else to look at and in trading the only thing that is certain is that nothing is certain.


----------



## barney (14 October 2011)

tech/a said:


> Techtrader would have been still in the trade.





I'd like to be still on it as well ..... particularly if you caught the run early 

The high volume bar at "A" has been tested by the next 4 bars, the last of which was "B"  (the next highest volume bar by a small margin)  

ie.* If *those in* late *during "A" were not shaken out by "B"  ....  there has been enough consolidation volume to suggest it *should* continue higher.

If it breaks "A" to the upside with little resistance, it looks strong .... If it breaks the low of "B" with little support, it looks weak.


----------



## tech/a (14 October 2011)

TECM said:


> Yes of course I'm game to add an opinion - I just have got other things more pressing to do than watch for every update.   You should know by now that I'm no shrinking violet though you do seem to have it in for me but - too bad too sad.




You should re read my posts with regard to your self. Not one has been a specific attack at YOU.
Questions yes--generalities yes.---personal no.   



> I believe volume tells a good story but is not the sole indicator anyone with any sense would trade off - and I never once said it was.




True AND I think you can in all cases.



> That chart whatever it is is far from a normal chart - if there is any such thing as a normal chart.




True but there are quite a few of these.



> There have been a couple of volume spikes but not of great significance in the whole scheme of things and in isolation considering the other bars around them may well have just been a crossing.  To tell that you would have had to go to the market depth at the time.




Not crossings its a weekly chart!



> The earlier one where you started yesterday was very significant and would have seen me enter the trade provided all my other ducks were lined up and I was able to determine if it was a crossing which is not too difficult when you have the live data and current chart in front of you.




See above. 



> The second one would have seen me exit but as the volume dropped off and price continued up provided all my ducks were lined up again I'd have gone back in.




Yes wise.      



> As I said I don't know what the chart is but I suspect all you are trying to do is to pick me to pieces because you had it in for me from day 1.  Doing that is counter productive.  I don't care but other traders may lose some benefit from that aspect of your attitude.




Your not the only one involved in this site or this thread. 



> To be honest I don't know how to post a chart here but I have seen that theory borne out repeatedly over the last 20 odd years.  Even recently a stock one of my brothers owned displayed that volume signal and I told him to sell it and lock in a great profit - he wanted more and of course down it came again.  Some months later it gradually groaned its way up again to an even higher profit and spiked again so I told him to sell and he didn't.  Now 6 months later it is worth less than he paid originally and he missed out on $$$$$$$'s profit as he could have had 2 excellent profits already locked in based on volume and my reading of the market depth.




This is a case of trade management. If he had a management plan that he was/is comfortable with then this would not have occured to him--- or anyone else who suffers in decision.    



> Not my problem - but that was a clear case of volume being a give away but my urging him to sell was based on other factors as well but the volume was what hit me between the eyes first.




Ok.



> Anyway enought of that - one chart is not enough to dispute my statement and as I said no one should buy/sell off volume anyway - it is just something else to look at and in trading the only thing that is certain is that nothing is certain.




Nothing is certain but the way we manage all our trades.
We anticipate moves and minimise losses while maximising gains.
Personally I think we can trade off any signal/s Individual OR multiple signals (Confirmations).
Even *RANDOM* entry.

I can post many examples of where the statement falls down and many where it is supported---but thats NOT THE POINT!


----------



## mr. jeff (14 October 2011)

For my 2c I would have been out on the 2nd major up bar (blue) preferably at the top, and would then be waiting and watching for a break of this new region. Probably with a large degree of disinterest after having taken a large percentage gain. 

If it broke out to the upside of the new level, I would re-enter, but as a fresh trade with less than a full quota at the entry, where I would wait for a further gain to confirm my entry and then hit it with further buying.

Hope this is clear. It may be less aggressive than some ( I like to lock in gains when any signs come - in this case this consolidation at the highs is clear enough for me to stand clear and wait) but it's always interesting to see other trading methods.


cheers.


----------



## tech/a (14 October 2011)

A smattering of Indecision,
1 reversal and a couple who think it will continue.

So here we are at resistance again.

*Decision point.
What do you think?*

CLICK TO EXPAND


----------



## pavilion103 (14 October 2011)

Tech, it looked like price dipped on increasing volume and then has risen again on decreasing volume. I'm not sure if in this instance it is a bearish sign. I'd want to see increasing volume on any upmoves from here. I'd also be cautious around the high to see if heavy volume does come which could definitely be a buying climax. 
I'm not 100% confident with this one. I'd be more on the bearish side I reckon. I'll take a stab and say that it will struggle to advance further. 


Also Tech, I find it amusing how many people take offense to your comments. I love them. A number of comments have made me take a good hard look at my methods and hopefully become a better trader. None are personal, just to the point.


----------



## Billyb (14 October 2011)

tech/a said:


> A smattering of Indecision,
> 1 reversal and a couple who think it will continue.
> 
> So here we are at resistance again.
> ...




Is that a weekly chart? Certainly looks weak on the overall impression. From what I've seen that kind of price and volume action rarely leads to higher prices. Rare doesn't mean _never._.


----------



## motorway (14 October 2011)

Always keep in mind "The Technical Position" 
consider how strong or weak are the hands that are holding

This tends to relate to the price that the holding was entered at.
Hence how far above or underwater everybody finds themselves

As a trend like this proceeds ,,, There are those who entered early sitting on more and more profits . There are those who entered later and significant number now who are only at break even or maybe even holding a loss ( Short side is another consideration ).

As the trend proceeds the hands necessarily go from being strong to weak
because those in profit close out positions . replaced by those buying in at the higher and higher prices and those who are showing LOSSES .

THERE IS A ROTATION ... Either Distribution and hence prices FALL
or a Re accumulation ...And this could be what is happening here.
Price could have dropped after the first test of the High
But it has gone back up .. WHY ? ( forget volume for a second )
BECAUSE  DEMAND HAS OVERCOME SUPPLY

ok Why is volume LOW.... lack of demand ( where are the closes in the move up ? )

Or because the move down has flushed out available supply ?

If there is  distribution (now ) why is there not heaver volume on the latest  move Up ?  EFFORT VS RESULT

I would be looking for a shallower retrace with even lower volume ( SPRINGBOARD )
Or Volume to increase as the move Immediately continues Up maybe gaping above Resistance..

If volume starts coming in and SUPPLY is SEEN to overcome demand
with ease ( ease of movement --- large ranges closing on the LOWS )
Then that will change the view ( there has to be EOM though )

THE LAST 5 BARS make a BULLISH CASE



Motorway


----------



## Lone Wolf (14 October 2011)

tech/a said:


> A smattering of Indecision,
> 1 reversal and a couple who think it will continue.
> 
> So here we are at resistance again.
> ...




I was thinking distribution. Then I read Motorway's post. He makes some excellent points. Certainly the recent few bars indicate a lack of supply for now. But I wouldn't expect a low volume move up to break though the previous resistance. How do I trade it? I wouldn't want to trade the breakout into possible supply as I don't see a good low risk place for a stop. 

But as Motorway said, If we now get a low volume shallow pullback from the high, that would interest me.


----------



## toocool (14 October 2011)

motorway said:


> As a trend like this proceeds ,,, There are those who entered early sitting on more and more profits . There are those who entered later and significant number now who are only at break even or maybe even holding a loss ( Short side is another consideration ).
> 
> BECAUSE  DEMAND HAS OVERCOME SUPPLY
> 
> ...




WOW ill go again, as before I would have been stopped out and not really knowing how far that pull back was but its still interesting set up.


I know you gave alot of questions there Motorway but I cut it to what I think has happened although I came to that only after reading your post.

If it does go through,  it would be worth buying on the break as then its back to fresh air and only profit supply.

I also like how the last long range down bar sat on top of the previous resistance and moved away quickly.


----------



## TECM (15 October 2011)

tech/a said:


> A smattering of Indecision,
> 1 reversal and a couple who think it will continue.
> 
> So here we are at resistance again.
> ...




As I said - you have had it in for me from day 1 but tech/a this is not  about us it is about the general good of the posters who want to learn.

If you want to run a test on any specific indicator then pay the posters the courtesy of being explicit about what chart and time frame you are trading.  If you find it difficult to specify the chart then at least pay them the courtesy of speficying the time frame. 

 How are new comers to trading to learn when you only want to point score.

Anyone can be a smart alec when they post a chart which doesn't relate to any stock, index or any time frame.  For all we know that could be a yearly chart.

I posted my analysis on a daily chart only to be castigated because it was subsequently revealed to be a weekly chart you were referring to but there was nothing to indicate the time frame to me or, so far as I can ascertain, anyone else.

If you are insisrtent on running a point scoring competiton then at least make our rules clear.

By my own admission I clearly admit that I did not make myself clear either and should have made it abundantly clear that I was working on a daily chart so Tech/a cannot be unnecessarily castigated  for showing a weekly chart. We are both at fault.

So - the lesson is - if you want to make a random comment then specify the stock or index and the appropriate time frame you are referring to.

How can anyone make any proper or informative comment without the relevant bases being put forward.  I am as as guilty as anyone else becaue of my assumption we were talking about daily charts.

I'm too time poor to be bothered making any further inuput.

All I can say is that I got an alert to go long at 4221 and with a trailing stop in place I'm up around $3,000.

I'm happy to see what I wake up with in the morning. A trailing stop will remain in place.

Sleep well.

E


----------



## tech/a (15 October 2011)

Heavens a one sided jibe here.
We are talking volume and spread analysis,
Where the high and at times resistance is
Playing a part.
There are some very good posts from people who have
Made observations based on the information they have
At hand.The setup occurs in all timeframes.

I along with many of the posters here will be both 
Right and wrong and it's great to see that pretty well
All of them who have been incorrect have rules in place to
Mitigate risk.

Off for a bike ride in a howling gale so more later.


----------



## mr. jeff (16 October 2011)

Looks like a lot of stock changed hands at the retreat, but was supported by some big buys. Large range down bars bad, average volume has increased, then commenced move up to resistance overhead. Last bar relatively low volume up bar, weak buying or sellers dried up. Which one? Would suspect that the move will be a breakout as we haven't seen the profit taking near the highs that you could expect to see. This means I am calling it accumulation and then continuation of strength. Especially when noting the test with the green arrow underneath it, 14 bars back a sign of strength in the background.





Will be looking for a sign of strength to confirm this continuation on the move up.
If resistance holds, not good and looking for more information.


----------



## tech/a (16 October 2011)

Some terrific participation here as we move forward.
I have picked out those observations most pertinent to the current move.

From* Motorway*



> THERE IS A ROTATION ... Either Distribution and hence prices FALL
> or a Re accumulation ...And this could be what is happening here.
> Price could have dropped after the first test of the High
> But it has gone back up .. WHY ? ( forget volume for a second )
> ...




*From Pav*



> I'd also be *cautious around the high to see if heavy volume does come* which could definitely be a buying climax.




*From Jeff*



> Would suspect that the move will be a breakout as we haven't seen the profit taking near the highs that you could expect to see.




All great observations and accurate.


----------



## tech/a (16 October 2011)

And on we go.
Price doubles again to here!
*Things are starting to get interesting.*

*Click to Expand*


----------



## tech/a (17 October 2011)

So we are seeing Volatility for the first time since the start of the exercise.
also the high volume is appearing on a down bar finishing on the low.


----------



## mr. jeff (17 October 2011)

looks like there is some selling down now, a distribution.
Haven't had time to seriously think about it, it appears that the move is finding it has too many players, a lot less buying on the down days making wide ranging down bars. 
Would definitely step aside now and watch.


----------



## pavilion103 (17 October 2011)

tech/a said:


> So we are seeing Volatility for the first time since the start of the exercise.
> also the high volume is appearing on a down bar finishing on the low.




You just beat me to it. 
The first thing that came to mind was volatility is now apparent. This makes me think: be very cautious. 

As for volume, let me have a think about it and I'll get back to you. Haven't had heaps of time recently and will be back on tonight if time permits.


----------



## pavilion103 (17 October 2011)

Another observation is that even the significant volume bar is no where near the volume of the previous highlighted ones. 
Is there enough demand to keep it going?


----------



## motorway (17 October 2011)

pavilion103 said:


> Another observation is that even the significant volume bar is no where near the volume of the previous highlighted ones.
> Is there enough demand to keep it going?




Hey Pav .. what about the depth of the retracement this time.. ground given back !

Supply is seen to overcome supply

In an wyckoff sense ...Preliminary supply ....... RED FLAG

motorway


----------



## tech/a (17 October 2011)

pavilion103 said:


> Another observation is that even the significant volume bar is no where near the volume of the previous highlighted ones.
> Is there enough demand to keep it going?




Excellent observation.
Interesting that the value of the shares traded in this bar is way way more than those traded in he previous very high volume bar.


----------



## pavilion103 (19 October 2011)

I'm getting impatient for more chart!!!


----------



## tech/a (19 October 2011)

Sorry

Im having the Network upgraded here so my charts at work are not up so cant even trade---bugga.
Will have a look tonight or if they complete in time today.


----------



## tech/a (19 October 2011)

tech/a said:


> Sorry
> 
> Im having the Network upgraded here so my charts at work are not up so cant even trade---bugga.
> Will have a look tonight or if they complete in time today.




Just to add some more investigative analysis

"What do you notice happening to the right of the high volume down bar??"

What does this indicate going forward?


----------



## mr. jeff (19 October 2011)

At left in the box there is distribution as there is a buying climax which is followed the next period by selling and little buying. Both wide ranging bars on low-med volume.
The selling continues on medium volume, punishing the prices, before someone steps in and starts buying, pushing the price back up, perhaps the seller has relented to allow some recovery, when the price reaches the previous high levels, selling resumes - in comes the heavy volume, a lot of stock changing hands, before prices start rising on subdued volume.

Weakness shown in the market at start of volatility, selling down of a large holding, you see large volumes passing on the down days and medium volume on the up days. 

Buying is there but is outweighed by the selling. It seems that this distribution is serious enough that it may shake others out during the volatility.


----------



## tech/a (19 October 2011)

So at last the chart is exposed.


----------



## pavilion103 (19 October 2011)

tech/a said:


> So at last the chart is exposed.
> 
> View attachment 44921




I'll give it a crack. 

Price falls on two down bars closing right near the low. Then the ultra high volume bar attempted to move higher but closed in the lower half of the bar, showing supply. Price then moves lower (albeit on less than convincing volume). 
The final bar is the first attempt to the upside since price has settled. 
This is a low volume narrow spread bar = no demand. 

Can't see prices moving higher based on this information.


----------



## tech/a (19 October 2011)

Look up the chart and see how you went.


----------



## Billyb (19 October 2011)

tech/a said:


> Look up the chart and see how you went.




He was right.

As you said the volatility is also a good clue...that investors are getting edgy and ready to sell this thing if need be


----------



## pavilion103 (19 October 2011)

tech/a said:


> Look up the chart and see how you went.




You beauty!! 

Yep that last bar on the chart you posted looked like a good shorting opportunity. Enough information to see that there was no more demand.


----------

