# Volume-Price-Patterns-Context & Catalysts, an Application to Trading Stocks



## tech/a (14 June 2018)

Further to Greggles discussion on DYL
*This is a fascinating topic* that I have
researched and refined over at least
10 yrs.

It really needs to be presented in its entirety as charts and
explanation are really necessary to show a complete picture.
To gel everything together.

*Topics

(1) Volume Control Bars
(2) Range
(3) Context
(4) Subsequent Bars
(5) Subsequent Volume
(6) Patterns, type, length, Context price and volume within
(7) Context, When and Where,Time frames
(8) Catalysts
(9) Trading examples both past and **live*.
*

Covering both long and short aspects of trading stock.*

This will take some time and the post/s will be lengthy.
I'm sure it will be worthwhile and I'd like it to be something
people can take away and use in their own trading.

Perhaps when I publish it here we could leave it here for a month then
move it into the members section.---or not?

I'm sure you will find this topic as fascinating and practical as I do
when trading stock.----could be a week or so---sorry for the delay.

*I've added a poll.*
People like me who take a good chunk of our time putting helpful topics together like to have feedback at least for our time and effort.
This is my way of finding out if people have an interest. Thanks.


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## greggles (14 June 2018)

I'm very interested tech. I agree it's a fascinating topic and I hope that others think so as well.

Surely there are plenty of learner traders here at ASF?


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## Joe Blow (14 June 2018)

Register your vote folks if you'd like to see a thread like this on trading. As tech/a said, it does take a lot of time and effort, so some support and expressions of interest would really be appreciated. Thanks!


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## dutchie (14 June 2018)

Great topic tech/a. Very interested. I've tried a few times to get my head around this.


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## debtfree (14 June 2018)

Tech/a, looking forward to your thread on this subject. A valuable resource for all and ASF for years to come.
I always like seeing your views on charts through your eyes, seeing things that are there for all to see but only a few take notice.

Wishing you all the best and thanks for putting this together, appreciate it very much.

Cheers ... Debtfree


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## Triathlete (14 June 2018)

This will be a valuable topic to all, should bring out some interesting conversations.....Thanks Tech/A


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## hallph (14 June 2018)

Definitely interested, I'm sure we can all learn a thing or two (at a minimum)


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## galumay (14 June 2018)

It is of absolutely no interest to me, the whole approach is totally contrary to anything I believe or understand about how the world works. None the less I voted in favour of the thread being useful because there are many who are interested in TA and trading and from what i have seen tech/a is of the most enthusiastic and experienced proponents of it.

Its a generous and extremely time consuming offer to the ASF community, we should encourage anyone who is willing to put this much effort into documenting their personal approach and strategy.


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## tech/a (14 June 2018)

Ha Galumay I love the raw honesty 

I’d be surprised if in the coming weeks you don’t have at least a genuine curiosity.
Even a fascination!


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## So_Cynical (15 June 2018)

Im with galumay, pretty much zero interest from me as it has little to do with what i do, however voted it up as i do appreciate the effort and think its a great subject for others.


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## Triathlete (15 June 2018)

I think it is going to be an interesting thread to see how others use T/A there are so many different  ways to use it and especially across the broad spectrum of trading and investing and also over the different time frames from intraday to long term....I still use a combination of TA/FA myself......Looking forward to the many discussions and ideas......


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## HelloU (15 June 2018)

tech/a said:


> Ha Galumay I love the raw honesty
> 
> I’d be surprised if in the coming weeks you don’t have at least a genuine curiosity.
> Even a fascination!



yes, I suspect most will, due to
(3) Context
(7) Context..
(8) Catalysts
I for one will be reading and (keep ur legs closed) looking under the table........and am pleased that with our new found ability to express our diversity of rationales that we have gained some greater tolerance...


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## tech/a (15 June 2018)

HelloU said:


> yes, I suspect most will, due to
> (3) Context
> (7) Context..
> (8) Catalysts
> I for one will be reading and (keep ur legs closed) looking under the table........and am pleased that with our new found ability to express our diversity of rationales that we have gained some greater tolerance...




Donald/Kim--- is that you?


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## Parse (16 June 2018)

Got my vote, definitely interested in volume. To me it's a big pointer at the lower end of the market. Being able to understand it better would be good.


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## tech/a (16 June 2018)

*FORMAT
*
After chatting with Joe I think the best way to present this is as Joe suggests.
I will write each section and present it as a unit. While I'm putting together the next unit if there is any discussion it can happen during that process. I'm hoping there will be a flow and the thread will not become disjointed.

*BACKGROUND
*
I was first introduced to price volume and pattern through Candlestick charting.
With the advent of Volume Spread analysis and Tradeguider with Tom Williams and Gavin Holmes
introduced through Nick Radge my interest became even stronger.

I realized that in technical analysis there is a great deal of information on Volume,Price,Patterns,Time frames 100s of books countless seminars,millions of charts but I couldn't find anywhere where it was all
put together---showing how *everything in its individual setting influenced or contributed to the future on a chart.

It was soon apparent that as an isolated bite of volume or a pattern or a group of bars ---as individuals they at best were "INDICATIONS" of "Possible" Future price action.*

To me a chart is a story--a book of crowd behavior played out bar by bar in all time frames. 

Much of what you will see here is my own observation and implementation,hopefully filling a lot of blanks --- blanks that are left in much of the texts and analysis presented to all of us.

Tech


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## tech/a (16 June 2018)

*Tradeguider* have put out a great deal of excellent material.
For those of you who dont have this here is a download.

An excellent source of information.

http://www.tradeguider.com/mtm_251058.pdf


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## tech/a (16 June 2018)

*Volume Control Bars *an introduction Short and Long Examples.
This is daily time frames
They play out in a very similar fashion in ALL time frames.
If your trading longer time frames this will be helpful on daily or weekly charts.
Shorter time frame Hourly/30min/15/min.
The more volume the more influential the bar and the zone.

These bars equate to effort (Generally) as do gaps and multiple High Volume bars.








Long Side








*Next topics*
Around Volume control Bars.
*Discussion
A look at time frames weekly to 15 min
Some to follow
Whats the thinking here?
RANGE
A look at individual bars
A look at Clusters/Patterns
Context and catalyst.*


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## Newt (16 June 2018)

I'm in.  Thanks for taking the time to do this Tech.


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## investtrader (17 June 2018)

How about 10 live trades. Just day of entry and then day of exit. Otherwise just theory.


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## lindsayf (17 June 2018)

Re what is likely to happen here....I will have a go.

Very high volume indicating institutional involvement, perhaps profit taking.
Looks like ther is a lot of selling in that bar.
I would now wait to see how price responds to that volume control bar High and low.
If price drops under it a short side trade using the box low as resistance might be viable.
If price pushes back up then a buy using the top of the box as support may be viable.
It would depend how it looked, which levels had been testsed ie context and structure would be a big factor in How to use this vcb.


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## tech/a (17 June 2018)

investtrader said:


> How about 10 live trades. Just day of entry and then day of exit. Otherwise just theory.




Great idea
I’ll post up ( over time ) more than 10 in the thread Charts of Interest
In the members section.
The trading methodology may not be clear this early on.

Even though this is volume 1 of a number of posts on this fascinating topic.

My trading of Price,volume,pattern,context and catalyst is more 20 yrs of observation and implementation than theory.
But to everyone else it’s theory and hypothesis —- understandably


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## tech/a (17 June 2018)

*Volume control Bars --- *have BOTH Range and Dis-proportionally high volume. 5+ x Average volume
*Volume absorption Bars --- *have Dis-proportionally high volume but little range. 5+ x Average volume
*Continuation Volume Bars* --- have average volume and average range. .5-3 X average volume moving in the one direction.
*Spot Volume Bars* --- have well below Average volume and below to average range the most powerful of these follow V/A or V/C bars
*Flat Bars *--- Have average volume and range and are not indicative of anything in range and volume.
Found in consolidations

*Note ---- GAPS*
The width of the gap and the range of the bar should be added together to form any support or resistance ZONE.

I personally like a stock to have an average liquidity of $300,000 over 10 days.

Combined with Volume *ALL *bars have a story. Many of these bars have been given various names by practitioners,in particular exponents of *VSA*. I have found all fit into the types of bars above.
http://www.tradeguider.com/mtm_251058.pdf
Read the above link for individual Bar interpretation,they are worth knowing.

Below is a chart showing examples of how I would be reading this chart with regard to Range and Price.
Clearly not every bar is marked.

This should give people a *" Feel "* for the price action in this chart.

*If you find yourself* trying to read a chart which doesn't give you a clear feel for its Price action and Volume---leave it and move to another. There are plenty which tell clear stories.




Finally all price and Volume analysis is an *INDICATION* of what is happening with the stocks participants and supply and demand. Every indication has to be Proven or Discredited.
This is where everything else that we will look at comes into play.


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## greggles (17 June 2018)

Thanks for this tech/a. You're posting some very educational content that I'm learning a lot from.

I have a question about volume absorption bars. In your chart above, it is clear in hindsight that the volume absorption bar in late February was buying pressure that was absorbing sellers. I assume that it can also be selling pressure that is being absorbed by buyers. How can you tell? Do you watch the market depth or can the previous bars (or other indicators) give you information that you can use to determine whether it is likely that an imminent move will be up or down? It appears as though these bars tend to immediately precede, or form the early part of, a change in trend.


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## tech/a (17 June 2018)

Great question and will be answered in the next instalment


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## tech/a (18 June 2018)

Hi Lindsay
Thanks for having a shot. AMI 

Your right about into involvement ( catalyst ) 36% of a single holding were sold 
On that day to other instos and individuals.

But the subsequent bars are interesting in particular the last bar on the chart 
We can see weakness after the sell off. My point with this chart is that there is an indication of a top and the last bar is testing this.

One to watch and follow the analysis.


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## tech/a (18 June 2018)

*
SUPPLY or DEMAND
*



explod said:


> Interesting chart there Tech, any increase in volume without price increase one needs to be ready with a tight stop here in my view.






greggles said:


> Thanks for this tech/a. You're posting some very educational content that I'm learning a lot from.
> 
> I have a question about volume absorption bars. In your chart above, it is clear in hindsight that the volume absorption bar in late February was buying pressure that was absorbing sellers. I assume that it can also be selling pressure that is being absorbed by buyers. How can you tell? Do you watch the market depth or can the previous bars (or other indicators) give you information that you can use to determine whether it is likely that an imminent move will be up or down? It appears as though these bars tend to immediately precede, or form the early part of, a change in trend.





This question is one I see every time this topic is discussed and one I battled with myself.
Over the years I have adopted the following when I look at any chart in any time frame and
any bar or clusters of bars of interest.

*SUPPLY controls PRICE
*
*Without supply price will not fall*
*Without supply being with drawn price will not rise.*

*DEMAND* will win or lose --- the landscape of a chart----- is *SUPPLY* dependent.

For *ME* this has made reading charts and price action so much easier.

First question I ask when looking at a bar or a chart is 
What is Supply doing---in all time frames.

I dont think in terms of *DEMAND.*


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## lindsayf (18 June 2018)

tech/a said:


> * SUPPLY or DEMAND
> *
> 
> 
> ...



Your view of this has always confused me as clearly price is about both supply and demand...one overcomes the other at different locations and times.  However I am willing to see if thinking just in terms of supply can be useful.  Thanks Tech.


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## tech/a (18 June 2018)

lindsayf said:


> Your view of this has always confused me as clearly price is about both supply and demand...one overcomes the other at different locations and times.  However I am willing to see if thinking just in terms of supply can be useful.  Thanks Tech.




And clearly it does.

The only difference is I'm not trying to identify demand.
If price rises then demand is winning as it will chase price higher to get filled
as SUPPLY WITHDRAWS.

If Price Falls then Supply will accept lower prices as DEMAND Withdraws.
If supply stops then price will steady or rise. Only continued strong supply
will see price continue to fall.

I'm only looking at the consequences of *ONE* the other *follows*!

May not suit all but suits me.


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## greggles (18 June 2018)

Does it matter whether it's a one minute chart or a daily chart or a monthly chart? How do different time frames alter the analysis, if at all?


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## tech/a (18 June 2018)

greggles said:


> Does it matter whether it's a one minute chart or a daily chart or a monthly chart? How do different time frames alter the analysis, if at all?



*
Volume (Liquidity) is the key.
*
Highly liquid Indexes are pretty good down to 15 minute--DAX
But say the SPI is hopeless at that lower time frame.
Higher timeframes are ideal for stock.

For stock I prefer daily and have traded 2 hr timeframes ok with very liquid stocks.
Lower than 15 min in what I trade for me is too low in volume to be indicative of anything. but Currency traders may find it useful at say 5 min (I Haven't watched it).


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## lindsayf (18 June 2018)

tech/a said:


> *Volume (Liquidity) is the key.
> *
> Highly liquid Indexes are pretty good down to 15 minute--DAX
> But say the SPI is hopeless at that lower time frame.
> ...



Didn’t you look at 3 minute charts on the Dax for a while?
Did you conclude that vsa on that timeframe was unreliable?
Of course my memory could be dodgy.


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## tech/a (18 June 2018)

Sure do but I don't apply this form of analysis to it.
And yes I would not use it in a timeframe that low.
Your memory is pretty good from what I see.

I can and do set a basis from the analysis though.
Smaller timeframe charts are used for timing in the direction indicated by the higher timeframe.
Which can alter during a session.
I'm generally in and out in 30 min but could have 2 hrs screen time.


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## lindsayf (19 June 2018)

Thanks, looking forward to learning more.  Context for low time frame directional bias in particular.


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## tech/a (19 June 2018)

tech/a said:


> I'm generally in and out in 30 min but could have 2 hrs screen time.




Just to clarify--when trading the DAX.

For the live examples I will work through (Currently)

MYX--had a day where Supply was present and while volume was low range was on the high side (Weak) Ill show the lower time frame charts for this.
Expecting Support and further distribution or accumulation.
SHV
WGX

Pressed for time but will comment and mark up charts when I can.


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## tech/a (4 July 2018)

OK I just wanted to post up a chart showing V/C bars all the way through a period.
You can watch any number of charts do similar.













Other things to notice is that Range of bars increase as they move from Accumulation to trend
and Distribution to trend.
Tops and bottoms are marked by volatility. Quite often this will signal movement when volume is not as evident.


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## tech/a (7 July 2018)

Lets look at other important aspects of a chart.

Absorption Volume
What happens within Consolidations
Good moves and where they normally occur
A look at a pattern
Super low volume tells us as much as Very high volume. (No Supply).




More coming after lunch!


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## tech/a (7 July 2018)

A quick intro to patterns behavior
Consolidation *IS* a Pattern!
But small tight patterns are very powerful.
Charts are littered with them.
Consolidations hold their own stories which can be
easy to interpret and to *ANTICIPATE*.


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## barney (7 July 2018)

Hi Tech …. Great info as always ……

With your permission and for the benefit of ASF and Joe's endorsement for more involvement in the individual Stock threads in mind ………

Are you happy if myself or any other ASF member screenshots your work on this thread and its corresponding thread … and pastes it on the appropriate Stock thread? …..

I think this would be a win win for all ……. there is no need for you to do any additional work as the screenshot can be done by myself or others as they see fit …..

Hopefully you are happy with the above idea …  ….. Cheers.


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## tech/a (7 July 2018)

Sure


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## barney (8 July 2018)

tech/a said:


> Sure




All good thanks Tech …..  You've done a lot of work which will give the individual stock threads some substance. Cheers.


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## tech/a (14 July 2018)

A look at
*
CONTEXT



*


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## tech/a (15 July 2018)

bngood said:


> Is this system used to buy and sell or do you still stick to your usual buy/sell plan and just use this to confirm?




*Firstly* I'd like to clear something up.

What I'm showing here is *NOT *a system or a method of trading.

Its an *Introduction to Charting.
*
The ability to *anticipate* future price action of participants trading Stocks and Shares.

*If your a discretionary trader*
Regardless of what you use as a buy/sell or hold strategy,having the ability to look at a chart before or during a trade and be able to anticipate with some degree of accuracy the next hrs/days/weeks trading
with the view of risk mitigation and trade management, I have found charting to be very beneficial not only to my trading balance but also to my peace of mind.

Whatever you adopt as a chart reading tool or methodology it in itself isn't a trading plan or method.
It can certainly be seen as --- at best a story of past and even real time participant behavior with the view of acting upon your own analysis by buying/holding or selling.
Reading a chart can become a valuable tool---certainly in managing and in particular *putting together a MEANINGFUL watch-list.* It also gives you indications of* when* and *why* to cull it.

Whether trading 
Breakouts,pull backs,value stocks
outliers moves,----and some of these can be incorporated into systems.


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## bngood (15 July 2018)

Great thanks Tech/a so it's an indicator like support and resistance and fib lines.

So if you look at IMC which has held above the box that is good as it is being used as support.  Is that right?

And NAN has gone down through the box but stayed within it and has gone out through the top again.  Would you expect it to retest the box (like a support/resistance line or just continue from here?


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## tech/a (15 July 2018)

What do you mean by IT


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## bngood (15 July 2018)

tech/a said:


> What do you mean by IT




Sorry I didn't make myself clear:

Volume control bar box is an indicator?

IMC the top of the last VCBox?

NAN's last VCB and then the price action?


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## tech/a (15 July 2018)

VCB creates a zone defined by the range of a bar including any gap
As it clearly moves past congestion.
This bar is where supply is defeated leaving price with less resistance.
If trading falls back into this zone we are looking for accumulation if price is to continue forward.
Volume and range are key


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## tech/a (24 July 2018)

I want to really show this important price movement
that you will see often in a chart. Something that can
look innocuous but see it often enough in similar incarnations
and you'll be able to take advantage of moves *BEFORE* they
occur with minimized risk.

Its really important to be able to *SEE *whats happening.





Do people prefer the larger Image or the thumbnails
that take up less space on a thread?


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## barney (24 July 2018)

tech/a said:


> I want to really show this important price movement
> that you will see often in a chart. Something that can
> look innocuous but see it often enough in similar incarnations
> and you'll be able to take advantage of moves *BEFORE* they
> ...



Thanks Tech …. Personally, I like to see larger pics at a glance …. We are all lazy and like immediate gratification

PS On a slightly different tack, I think your interpretation of the Price movements in CAG either on this or its own thread would/could be invaluable … Cheers


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## tech/a (24 July 2018)

Have already on the CAG thread.
Anything in particular other than 
When is it going to double in price
A few days before it does?


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## barney (24 July 2018)

tech/a said:


> Have already on the CAG thread.
> Anything in particular other than
> When is it going to double in price
> A few days before it does?




All good Tech …

I was thinking in relation to "micro managing" the current price action on CAG for eg... 

ie.  It has risen exponentially …. 

todays price action has dropped 10% (normal) but very little Supply or Demand in either direction …

How do we read the daily price action from here forward??

ie. ie. … I think it could be a good learning example irrespective of where it heads from here 

....  If you are happy to give a daily commentary on it from this point, I 'm sure many would appreciate your thoughts … Cheers.


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## tech/a (24 July 2018)

Ok will do in the morning 
There is a way to look at this


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## barney (24 July 2018)

tech/a said:


> Ok will do in the morning
> There is a way to look at this



Thanks for that ….


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## tech/a (28 July 2018)

Hi

Placed a heap of charts up in the sister thread.
Managed to very nearly complete this topic but managed *80% of the basics* and 
touched on most of the aspects for finessing. 

There has been great discussion here and on some individual threads.
I note some of you have cottoned on to this chart reading stuff and the way I approach it.
Not only that but you can see the merit in it and some are actually finding some great
prospects and learning how to cull their *Watch list *and get IN FRONT of some great trades.

Further they have seen and had a go at *managing* their trade by reading the right hand edge 
price action which has lead to further opportunity in some cases.
Patience in others,and closing of trades in some as well.
Its not a perfect science but this refinement I have made ---I think makes it pretty reliable.
Reliable then makes it a valuable tool.

*Off for 2 mths *of adventure and wandering around Italy and the UK and a few days in Singapore.
Ill visit from time to time but no charts and no trading. Happy to help if I have time--not likely!

*Will continue* when I return.
I encourage you all to have a go (Those interested) Throw out those calls and have confidence
in the charts
*EG CAG* my *personal bias* was not supported by the chart and as such I missed out!!

Be safe keep well and see you soon.


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## bngood (28 July 2018)

Have a great trip tech/a.


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## Country Lad (28 July 2018)

tech/a said:


> Hi
> *Off for 2 mths *of adventure and wandering around Italy and the UK and a few days in Singapore.
> Ill visit from time to time but no charts and no trading.




Have a good trip tech, we are off soon for 3 months - maybe I'll run into you in Italy or England.  Or maybe not, that's inviting a car crash.


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## barney (28 July 2018)

Thanks for your insights Tech …. Very much appreciated by all and sundry …. Have a good trip … See you when you return to the Dark Side


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## Wysiwyg (28 July 2018)

Heightened awareness, spatial awareness and good listening helps make for an enjoyable foreign land adventure. See you on the rebound.


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## tech/a (29 July 2018)

Country Lad said:


> Have a good trip tech, we are off soon for 3 months - maybe I'll run into you in Italy or England.  Or maybe not, that's inviting a car crash.




Anytime mate !


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## statmech71 (2 August 2018)

All the best for your travels Tech. And thanks again for all your efforts in this and your other educational threads. I have found them to be invaluable.


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## xorrox (1 February 2022)

Hello @tech/a 

You added a poll to this thread and I thought of also adding few words - yeah 3.5 years later
I'm relatively new to trading and I started reading this forum seriously about 3 months ago.
It took me a while to sort out the useful from the trivial information but your writings bring me great joy.
I have a visual ability like you describe and I wondered a long time whether it was useful for anything, thank you for this epiphany.
I relate to your writings the best and appreciate you freely sharing all that you can, helping people that ask for it and even tolerating the disruptive ones.

Personally, I prefer to read and search rather then pollute this cyberspace with trivial questions, but please know you're making a difference to my share trading education.

All the health in the world to you.
Cheers
Jon


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## Joe Blow (1 February 2022)

xorrox said:


> Personally, I prefer to read and search rather then pollute this cyberspace with trivial questions, but please know you're making a difference to my share trading education.




Hi Jon, just wanted to make a quick point here. Questions are vitally important parts of threads like this one. Some of the best posts come in response to questions from other forum members. Questions help flesh out and expand a topic and help not only the person asking the question but also those who read the thread afterwards who may have had the same, or similar, question.

So if you have any questions don't hold back from asking. I am sure that @tech/a would be more than happy to respond when he has the time to do so.


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## Ann (2 February 2022)

I for one would really like you to keep this thread going @tech/a. I struggle to see the relationship between chart movements and volume. I can work profitably with all the other indicators, trendlines and horizontals but volume eludes me. I think it could add another weapon to my arsenal if I was able to relate volume and price.


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## tech/a (2 February 2022)

Ok I’ll do some more when I get some time 
Guppy was in your boat as well 
To me it’s an indicator of supply and demand in fact I’ve found very low volume in some circumstances to be a greater leading indicator than high volume 
Supper high volume is generally climatic 

a bit to this as an indicator but handy for me all the same


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## Joe90 (2 February 2022)

Hello Ann
Re volume and price, I am also a follower of @tech/a and his substantial contributions to this forum. His studies follow some of the Volume Spread Analysis (VSA) ideas and there are a number of books available online on this subject. The one by Anna Coulling is a good place to start.

And this software manual is another, a bit more advanced.  https://www.aussiestockforums.com/threads/vsa-free-master-the-markets-by-tom-williams-pdf.13804/


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## peter2 (2 February 2022)

In the same context, is Mark Minervini's VCP (Volume Contraction Period). It worth looking for these after high volume price spikes. 

Two examples in this chart. Note after the high volume price spikes, volume drops off significantly while price drifts sideways with hardly any range (small tight bars). then BOOM




It's not just a tactic for short term traders only. You will see this pattern on all timeframes, weekly, monthly, qrtly etc
Once supply is depleted (or withdrawn, which is a good suggestion from @tech/a) price has to go higher quickly. 

It's a good timing tactic to get into a new trend near the start and not have an awkward drawdown at the start of a trade. 
If you do experience the awkward drawdown then perhaps your timing isn't right. Take the small loss and keep watching for the next opportunity.


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## peter2 (2 February 2022)

Another chart example of a VCP (Volume Contraction Pattern). 

Weekly chart of *TIE* ( soon to be gold producer Cote d'Ivoire)




A VCP can form anywhere in the range, top, middle (like this example) or bottom. It's an opportunity to start a trade with a small initial SL which maximises the R:R outlook.


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## Ann (2 February 2022)

tech/a said:


> Supper high volume is generally climatic



I have been working on this for a part of the day. Very interesting! As you say it appears at the very top or the very bottom generally and drawing support resistance horizontals from these particular points can be very beneficial, which is not earth-shattering as some  charting programs have horizontal volume, which sadly IC charts do not have. I pleaded with Colin Twiggs back in around 2005 to please put in horizontal volume, sadly he just told me to look at the Equivolume chart. It is just not the same.



tech/a said:


> To me it’s an indicator of supply and demand in fact I’ve found very low volume in some circumstances to be a greater leading indicator



This is interesting I will spend some more time looking at low volume. I have noticed generally my existing horizontals marry very closely to the 'new lines' the volume levels bring. Small adjustments may make the difference between a buy or sell before it is appropriate. As in CQE, not that it was a small difference in the horizontal, on this occasion my fail line was $3.57 and the volume level was $3.70. I felt my fail line would take too much profit off the table so I sold after it broke a rising trendline at $3.73. Had I had that volume horizontal I would never have sold. $3.70 would have been a better decision point.


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## Captain_Chaza (3 February 2022)

Studying Volume IMHO is like watching a game of Swaps in the school yard
One BUY is cancelled out with One Sell
I call this a DRAW
100,000 Buys is also cancelled out by 100 ,000 Sells
I call this a DRAW also

The fact is that on the ASX  you can only have a Sell if there is a BUY
'Tis like a perfect match as is made in heaven
ONE (1) BUY + ONE (SELL)

Volume analysis started  off in the beginning because it was an easily documented statistic
and the only stat  in those days
AND still is  to this day

I don't care how many kids are playing SWAPS in the schoolyard  or what their parents are SWAPPING on the Sharemarket
It gives me no insight as to who SWAPS best

VOLUME studies in "OPEN INTEREST" is another story
This is not a game of SWAPS

I hope this helps
AND 
It is only My Opinion

Bon Voyage and Stay Well


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## tech/a (4 February 2022)

Captain_Chaza said:


> Studying Volume IMHO is like watching a game of Swaps in the school yard
> One BUY is cancelled out with One Sell
> I call this a DRAW
> 100,000 Buys is also cancelled out by 100 ,000 Sells
> ...




In the majority of trading I couldn’t agree more..

But that’s not where the gems are.
They appear as extremes. They appear as outliers in some cases.
They appear as anomalies where you just have to say —- that’s not normal and
the combination of this and that commands my attention.

Why —- because I’ve seen it countless times before and it is generally an opportunity which needs to be investigated.

It could be beneficial or costly .

Its like reading people.
Most can’t —- some can. It’s not an exact science but in the hands of those who are good at it —-insights are invaluable.

Later—-


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## Ann (5 February 2022)

Captain_Chaza said:


> Studying Volume IMHO is like watching a game of Swaps in the school yard




Ah yes, swap cards at school. The only thing that would draw me out to have contact with other children, trading!  I started with a few cards maybe five or six and ended up with so many I couldn't hold them in one hand. Bloody loved trading, it was my only pleasure at school. I still have them, there are some awesome cards there, I probably should have them valued, there may be a bob or two of value there.



Captain_Chaza said:


> Studying Volume IMHO is like watching a game of Swaps in the school yard




I couldn't see anything in volume, it seemed just short of a wank to me!



Captain_Chaza said:


> VOLUME studies in "OPEN INTEREST" is another story
> This is not a game of SWAPS




Yes, it is Captain, when there is a swap over it is really time to pay attention.



tech/a said:


> But that’s not where the gems are.
> They appear as extremes. They appear as outliers in some cases.
> They appear as anomalies where you just have to say —- that’s not normal and
> the combination of this and that commands my attention.




Exactly what I have discovered, or believe I have discovered with volume spikes and horizontal support and resistance. No more guesswork, no more simply eyeballing it, now I can have volume precision with my lines. I feel I can see already where I can make money using volume spike horizontals.



tech/a said:


> Its like reading people.
> Most can’t —- some can. It’s not an exact science but in the hands of those who are good at it —-insights are invaluable.




I am pretty good at reading people. There were a number of people I communicated with on the IC forum. Some were the real deal and some were losers who had little else in their lives and made 'big men' of themselves and told others how to trade. When I finally met them in person, I was so, so right about all of them.



peter2 said:


> Another chart example of a VCP (Volume Contraction Pattern).
> 
> Weekly chart of *TIE* ( soon to be gold producer Cote d'Ivoire)
> 
> ...




Thank you very much for taking the time to draw a chart and show me what you are looking at Peter. I have spent a little time looking at low volume days and I notice when the VCP section is rising or creating a rounding top then a fall tends to follow. A level pattern as you have illustrated tends to lead to a rise. Most interesting!

However, I am now very interested in using volume spikes as a point at which I will draw a horizontal support/resistance line. The short term VCP reading would be a real boost for a day trader, this is not me. This seems to be the missing ingredient I have been looking for, for years!  I still have many, many more hours of work on this before I am satisfied I am correct. I am very excited by volume and horizontal support/resistance now! 🥳

Looking at the same weekly chart example of TIE with a volume spike and horizontal support. Let's see how it goes.


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## frugal.rock (5 February 2022)

tech/a said:


> But that’s not where the gems are.
> They appear as extremes. They appear as outliers in some cases.
> They appear as anomalies where you just have to say —- that’s not normal and
> the combination of this and that commands my attention.
> ...



An example, if I may @tech/a

On 30th August, 2021,
I noticed a random single huge volume trade on GMD. 30 million in volume.
Off the back of this anomaly, I bought some but sold after around 2 weeks or so (mid September) as no event occured.

Around a week after I sold....
this... grrr.




I've now adjusted my anomaly expectation horizon to 4 weeks rather than 2 weeks.

GMD is now trading at $1.70...
(I nearly fell over backwards seeing this today.... and yes, found it consolidated 10:1 in January)


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## Ann (5 February 2022)

Interesting to see how this travels. I absolutely hate consolidations, I have been burned so badly, I call them legalized theft. I am sure some of them work out but I don't want to be there when it happens.


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## tech/a (6 February 2022)

Greetings.

It takes quite a while to mark up a chart for people to digest.
This is a fascinating and very profitable topic so it's worth in my view
the effort. I've decided that the best way to bring people up to speed is to first show
what it is they should look for.

Each chart is NOT exhaustive I can only show a little at a time otherwise you'll have trouble putting it all together.

*THE KEY, in the END, is to be able to READ A CHART with a good deal of accuracy GOING FORWARD*

Bear with me as I continue to add charts when I get a chance.
Practice on charts you may find yourself and see if you can read what is happening *NOW


*


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## tech/a (6 February 2022)

Joe90 said:


> Hello Ann
> Re volume and price, I am also a follower of @tech/a and his substantial contributions to this forum. His studies follow some of the Volume Spread Analysis (VSA) ideas and there are a number of books available online on this subject. The one by Anna Coulling is a good place to start.
> 
> And this software manual is another, a bit more advanced.  https://www.aussiestockforums.com/threads/vsa-free-master-the-markets-by-tom-williams-pdf.13804/




Yes I agree I have her two books one on FOREX.

As time goes buy youll see some of my own slant on most things Volume and price.

Here is another excellent free source (185 Pages will keep you busy until I get back!)


			https://www.tradeguider.com/mtm_251058.pdf
		


Please post your own findings and prospects for us to look at Long and or short!


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## tech/a (6 February 2022)

Ann said:


> Ann said:
> 
> 
> > Interesting to see how this travels. I absolutely hate consolidations, I have been burned so badly, I call them legalized theft. I am sure some of them work out but I don't want to be there when it happens.
> ...




Just a few observations. Consolidations are best served FRESH!


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## Ann (6 February 2022)

This is a quote from @frugal.rock  post "GMD is now trading at $1.70...
(I nearly fell over backwards seeing this today.... and yes, found it consolidated 10:1 in January)"



tech/a said:


> Just a few observations. Consolidations are best served FRESH!




Talking about a different consolidation John, a 1 for 10 share consolidation or 'reverse share split' is when a company for whatever reason wants to appear to increase the value of their company or reduce the number of outstanding shares so for every 10 shares you hold, like magic it all of a sudden becomes 1 share.  The last price was say .71c and let's say you held 10,000 shares which would be $7100. After the share consolidation you own 1,000 shares. Current close is $1.69, my very feeble attempts at maths looks like I now have the grand total of $1690. These figures are subject to correction. However I think I got it right, if I did then you can see at a glance the kind of daylight robbery this is. From memory, I think the consolidation I was caught up in was a 1 for 80. Decimated!


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## Ann (6 February 2022)

Nup, not what I thought, ignore the above...this happened in January, nothing much happened, which seems strange the huge lift in price happened back in September 21.

......No idea, I just spent more time than I want trying to read notices. It almost seemed like the directors did a 1:10 dunno. I will leave this for someone else to figure out. However, with all this sideways consolidation (not share split) there are going to be powerful numbers added to this $1.50 to $1.80 level added to the massive spike of 21 million in September 2021 and 13 million in November 2021. It will be interesting to see how it travels once it is above 1.80 ish.


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## brerwallabi (6 February 2022)

Wow, never been involved in anything like that, if my 10000 at .71 were to become consolidated I would expect 1000 at 7.10. The last consolidation I was involved the share price was about 4 cents (1 for 5) so they went to 20 cents and then promptly fell to 13 cents over the next month.
Try to avoid the small companies with billions on issue, although I do hold one at 1.5 cents expecting some consolidation in the not to distant future.


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## peter2 (6 February 2022)

Just for the record I was holding *GMD* when they consolidated the number of issued shares.
I held 46,600 and they were trading at 0.175 (Value = 8155).
Post consolidation I held 4660 at a price of 1.75 (value = 8155)
There was no "robbery". When trading resumed the MD was very thin and I sold as drifted down not wanting to get stuck without any buyers. The MD thickened up soon after I sold.

A few companies seem to be consolidating their shares in order to raise the price, prior to listing on another exchange (eg. US).

Consolidations of the bad kind happen in the micro cap sector as CEO's try to hide the fact that the price has gone nowhere for years and yet need to raise capital once again. Reducing the number of issued shares hides this ASX enabled thievery.


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## Ann (6 February 2022)

tech/a said:


> Here is another excellent free source (185 Pages will keep you busy until I get back!)
> https://www.tradeguider.com/mtm_251058.pdf
> Please post your own findings and prospects for us to look at Long and or short!




Too many words for a dyslexic John!



tech/a said:


> THE KEY, in the END, is to be able to READ A CHART with a good deal of accuracy GOING FORWARD




Shall be done, dear boy! READ MY CHARTS!


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## Ann (6 February 2022)

peter2 said:


> A few companies seem to be consolidating their shares in order to raise the price, prior to listing on another exchange (eg. US).




Yes ABR 1:10 is one heading for the NASDAQ I think I remember reading. I thought I would just sit back and watch for a bit.


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## tech/a (6 February 2022)

My comment about reading a chart going forward was not directed at DW8 specifically but the hope that people can be analysing any chart they find of interest with some new insights. Right hand side of any chart!

Later


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## Captain_Chaza (6 February 2022)

Beware of the Politically Incorrect Financial Speak
A correction is at least a 20% loss
"Learn to live with it" They say
AND
Most do as they know no better

"Consolidations " are just a share split
An therefore an adjusted share chart should not move in any direction

It just makes it cheaper to buy a share but the market cap is still the same 
EG; Apple and Tesla and soon to consolidate/reconstruct is Google I hear
These are not CONSOLIDATIONS
They are merely RECONSTRUCTIONS

A consolidation in Seamanship terms is called the DOLDRUMS

This often occurs  around the Equator when travelling from South to North
It is very taxing on ones patience and even puts some sailors into horrible despair
Particularly when they don't have enough Water and Fishing line on board

Forget about the Sauerkraut
This is the least of their problem

Stay Well , Stay Safe and Bon Voyage on the Criptos at dawn
'Promises to be a Windfall opening on my CRYP


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## Ann (6 February 2022)

tech/a said:


> My comment about reading a chart going forward was not directed at DW8 specifically but the hope that people can be analysing any chart they find of interest with some new insights.



Do it forward John, I want to see you read a chart using volume as it moves forward, after the fact knowledge is little more than fresh cowpats, not even good for the garden yet!


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## tech/a (6 February 2022)

Go to charts of interest where I’ve read charts going forward many times 
ive been asked to continue the topic to do that I was under the impression people would like to know how and what I look for as a chart develops.

but if people don’t want that I’ll post up charts and put into practice the analysis I see. If people don’t understand please ask away!

Its a pretty good way to see first hand how to trade 
Winners, Losers, and Wowsers. In fact probably the very best way to learn anything 

I’ll pick some from watchlists and work the right side of the chart with commentary leading up to and decisions to trade.
Which maybe Entries, Exits or holds.

I’ll get a couple up .


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## Captain_Chaza (6 February 2022)

IMHO
If you cannot place a Technical "BUY or SELL ALERT" on any Technical Indicator it is not worth having onboard 
Once it gets to reading the Tea leaves It is time to leave
We all read them differently and Some may read them better than others 

This not Technical Analysis

This is  Sweet and Sour Fundamental Analysis to me 
IMHO


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## tech/a (6 February 2022)

Captain_Chaza said:


> IMHO
> If you cannot place a Technical "BUY or SELL ALERT" on any Technical Indicator it is not worth having onboard
> Once it gets to reading the Tea leaves It is time to leave
> We all read them differently and Some may read them better than others
> ...




Can you clarify what it is your alluding to 
Anne’s Charts or My intro to my form of VSA / T/A ?
Im. Not following any cohesion to your post particularly 
the Fundamental Analysis reference?


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## Captain_Chaza (6 February 2022)

Can you set an ALERT on the VSA /TIA on  any or a few stocks to study
Or
Do you have to watch the screen all day and sometimes even all night on all your favorite Stocks and Shares?

 Technical Analysis gives you the ability to Set ALERTS

Fundamental Analysis is in the Domain of Cowboys  IMHO
How much they know is questionable and how little they know is Criminal

 All They Say is 

"She'll be right in the LONG TERM because we have a diverse Portfolio

That says to me  That they hold all the loses and hold all the winners

(INFLATION is GOOD)

It proves to me that they have no BUYING or SELLING ALERTS

Mainly Because it can't be done with Sweet FA
It is based on their personal readings of the Tea Leaves


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## tech/a (6 February 2022)

Captain_Chaza said:


> Can you set an ALERT on the VSA /TIA on  any or a few stocks to study
> Or
> Do you have to watch the screen all day and sometimes even all night on all your favorite Stocks and Shares?
> 
> ...




Yes of course.

All analysis including F/A and T/A isn’t an exact science.

The best result of any analysis is giving us the ability to anticipate a profitable trade or an Exit which Diminishes
Risk of loss .

Failure of analysis doesn’t mean it’s useless it’s what you do with the information that determines it’s value. 
What you do with wins and losses How you handle Risk 
Even determining risk at entry exit and hold!

Its worth the journey.


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## tech/a (7 February 2022)

peter2 said:


> Just for the record I was holding *GMD* when they consolidated the number of issued shares.
> I held 46,600 and they were trading at 0.175 (Value = 8155).
> Post consolidation I held 4660 at a price of 1.75 (value = 8155)
> There was no "robbery". When trading resumed the MD was very thin and I sold as drifted down not wanting to get stuck without any buyers. The MD thickened up soon after I sold.
> ...




PEN 
A classic example


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## Ann (7 February 2022)

John, could you do me a favour when you are writing on your charts, please don't use red, I can barely see it on the black perhaps a lighter grey would be easier for me to see...On reflection, now I see how you are trying to explain this, any old chart will do, no need to forward chart.

I don't understand what you mean by using the term 'supply'. You say running out of supply meaning quantities of shares are becoming less plentiful, I am sure there would be millions of shares available if someone wanted them, the market makers would always be hovering.

When you say anomaly, do you mean a lift in trading volumes? Or is it more extensive than that?


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## tech/a (7 February 2022)

I'll use white to notate.
Supply are sellers.
Demand are Buyers.

Basically, if sellers withdraw then Buyers are forced to bid higher to make a sale attractive to a seller. (Think Gaps UP.)
If sellers want to move large amounts NOW they will accept lower prices to quit their holdings  (Think Gaps DOWN.)

Anomalie ---- out of place not normal---bit like myself!


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## Ann (7 February 2022)

tech/a said:


> I'll use white to notate.




If it is not too late, I would prefer grey, white hurts the eyes, damn dyslexia is a bugger!


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## Ann (7 February 2022)

tech/a said:


> Basically, if sellers withdraw then Buyers are forced to bid higher to make a sale attractive to a seller. (Think Gaps UP.)
> If sellers want to move large amounts NOW they will accept lower prices to quit their holdings (Think Gaps DOWN.)




Right, got it!



tech/a said:


> Anomalie ---- out of place not normal---bit like myself!



Yeah, there is usually only one or two like you in any forum!😏


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## tech/a (7 February 2022)

Ann said:


> If it is not too late, I would prefer grey, white hurts the eyes, damn dyslexia is a bugger!




That's interesting My wife is a long time member of the

A.D.N.


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## Ann (7 February 2022)

tech/a said:


> That's interesting My wife is a long time member of the
> 
> A.D.N.



This is a bit off topic but it is your thread so you get to lead the way...

How long has she known she's had dyslexia, how well did she cope with her school days? Does she feel it has impacted her life negatively or positively?


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## tech/a (7 February 2022)

A.D.N

National Dyslexia Association.


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## tech/a (7 February 2022)

This is a very good example of how extreme volume over a short period (3 Days) can have a strong bearing on future prices.
Just by buying and selling  at or very near the extremes of the V/C area, there is some profit to be made.

I hope the grey is better for you too see ANNE

If not Try -----Speck Savers.


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## Ann (9 February 2022)

tech/a said:


> This is a very good example of how extreme volume over a short period (3 Days) can have a strong bearing on future prices.
> Just by buying and selling at or very near the extremes of the V/C area, there is some profit to be made.
> 
> I hope the grey is better for you too see ANNE



The grey is awesome, I can read it no trouble, the blue, on the other hand, causes mucho pain! Not to worry, I know what the chart looks like!

However this was an entirely worthwhile exercise, I now know the amazing truths volume can tell me. I have been in total concentration for two days absorbing my belated discovery. I do wish I had looked at volumes years ago, it makes the whole exercise of reading a chart a total dawdle. Keeping it so simple, volume spikes, horizontal lines a Stairway to Heaven! 💋





I feel a song comin' on....


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## tech/a (9 February 2022)

Getting there 
The basics have made an impact more to come and on that chart 
Remember if a level is blasted through then that is an anomaly and should be highly regarded


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## Ann (12 February 2022)

@tech/a, I am going to put up a challenge for both of us shortly. I have reduced my indicators to only three and intend to focus more on these three, now including the volume. I won't say I have a handle on volume, I see my love affair with volume as still in the 'let's go for dinner' stage! 
Before I used to simply glance at the indicators, which did not include volume, now I am going to attempt to integrate them into my buy strategy.


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## Ann (12 February 2022)

OK, I am looking to buy a small Lithium stock. There are three candidates I have chosen to chart. All three look quite similar. Two are @tech/a choices CXO and LPI and my choice is GL1. All of these are in blue sky territory, other than what is currently above the price over the recent past. They all have their strengths and weaknesses. I am going to ask @tech/a or anyone for that matter... @peter2 or anyone who would like to join in with their opinion using the indicator of volume. What can volume tell me I am not already seeing on my charts? I would have added another stock I am watching which is ABR but that is about to do a 1:10 consolidation and list on the NASDAQ and get a name change. I would rather stand aside while all this happens and I doubt the current chart would give me a true indication of how well it will travel in the future but I could be wrong. I may be missing out on a gem. So be it, I will just buy in higher, or not.

My first choice would be GL1 because it has good money flow of 17%. It is a young stock and has just started on its upward journey with no baggage from past history.

Second choice would be CXO as it is showing a slight lift in the money flow but it is still just sitting above 0%. It has a good percentage difference between the MA and the PV on the PVI. But overall the three stocks all have a good looking PVI. This tells me there is positive market sentiment toward all of them. (Yes I know it is regarded as an indicator of what the dumb money is doing but there is a lot of dumb money out there, I don't care what the fundies are doing, they have their own agendas.)

My last choice would be LPI, it had a volume spike and looking at the money flow it appears to be a sell-out and the money flow is still falling away but now at a slower rate sitting just above 0%. There is a horizontal above the price which was taken from the recent high volume spike of a possible sell-out, I have to ask the question, will market sentiment cause this horizontal to act as a resistance to any further price rises?

Edit.. of course, it is all moot if the lithium price falls!


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## Captain_Chaza (12 February 2022)

I am watching with great interest
Are you saying that they are BUYS and not SELLS?


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## tech/a (12 February 2022)

Ann.
It's clear that these three are Synergistic to Nickel Pricing.




So I won't look at all charts just GL1
Plenty here. enjoy the show!


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## frugal.rock (12 February 2022)

Ann said:


> Edit.. of course, it is all moot if the lithium price falls!



Despite lithium price being exponentially high, unless a huge new supply comes on soon and hard, a fall is unlikely, IMO.
Markets overall are a different story however


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## Ann (13 February 2022)

Captain_Chaza said:


> I am watching with great interest
> Are you saying that they are BUYS and not SELLS?



I am actually waiting for ABR to get itself organized before I make any decisions. I simply thought it was an interesting exercise as all three stocks looked fairly similar to each other.  


frugal.rock said:


> Despite lithium price being exponentially high, unless a huge new supply comes on soon and hard, a fall is unlikely, IMO.
> Markets overall are a different story however



 Yes, I tend to agree with you FR, even if Lithium continues to remain at its current level, if the markets take a further dive, I would think these three would follow it down.



tech/a said:


> It's clear that these three are Synergistic to Nickel Pricing.



I think the Lithium price while a bit smoother is also displaying the rapid rise and levelling off. I am not surprised as they are all battery associated.





tech/a said:


> So I won't look at all charts just GL1



Your chart captions and highlights are ideal, thank you!

I did notice that low volume area at "C" without any falling away of price levels. It feels to me as though people are just marking time before the market tells them one way or another which way it will go.  So we agree, out of the three GL1 may be the best choice? However, none of my indicators or your volume assessment makes me want to enter a trade just yet.


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## tech/a (13 February 2022)

Clearly I meant Lithium!

Ann I’m looking at GL1 because its the one you like most.
The analysis doest show a reason to buy just a story going forward


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## Ann (14 February 2022)

tech/a said:


> Ann I’m looking at GL1 because its the one you like most.
> The analysis doest show a reason to buy just a story going forward



I was and am hoping volume may give me a degree of indication as to which to buy going forward. So far ABR has the best looking volume spikes related to peak and trough price and that would have been the one I would have bought but not in the middle of so much happening to it. Although it is a more expensive stock than the other three speccies. Probably because this isn't a speccie!


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## Captain_Chaza (14 February 2022)

Ahoy Brave and Not so loyal 1st Officer ANN

When I advised you privately to discard the price charts and the volume charts  and sail on instrumentation only
I was not joking

These charts are dated as at Friday 11th


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## stanwell (19 February 2022)

The opposite way is to remove all indicators, only keep a moving average and MACD. 

MA is to know the direction of the trend (or no trend) and the relative distance the price is from the MA. MACD is to see the momentum.

I found volume indicators are quite confusing to interpret. I've given up on them because we trade price, not volume.

From this chart, I wouldn't touch GT1 for the time being.


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