# Volume: How can it be used in trading?



## tech/a

I thought this could be a good topic for discussion and one where chart examples abound.

I personally find extremely low volume in a normally traded (Other than a thinly traded penny) more important and a better signal to the trader than extreme volume.
reaction to tests of both high and lows in close proximity are also great guides.

Having traded VSA now for over 3 yrs I find it extremely important in my day to day management of my discretionary trading.

Anyway interested in how other approach and use volume and even range in their trading.
I'll show some of my own usage as time goes on with the topic.


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## MRC & Co

*Re: Volume as a trading signal*



tech/a said:


> I personally find extremely low volume in a normally traded (Other than a thinly traded penny) more important and a better signal to the trader than extreme volume.
> 
> reaction to tests of both high and lows in close proximity are also great guides.




I'm interested to see these two points.  Thx.


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## tech/a

*Re: Volume as a trading signal*

My topic heading was purely VOLUME however someone has altered it.

If you wish to alter it I would prefer.

Volume---how can it be used in trading.


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## tech/a

*Re: Volume as a trading signal*



MRC & Co said:


> I'm interested to see these two points.  Thx.




I'm interested to see if you have any interpretation of volume at points of Support/Resistance?

I too would be interested in your/others inputs.


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## tech/a

*Re: Volume as a trading signal*

Here are 2 typical consolidations with clear support and resistance boundaries.

We see them every day and the question everyone asks is how can we be sure to the best of our technical ability which way these consolidations will break OR will they just continue to drift.

There are clear clues in both charts based on pure volume and range.
Before I mark them up any comments/opinions/observations?

How would you trade these?


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## Mistagear

*Re: Volume as a trading signal*

Hi,

I use Volume and volume charts as a primary indicator, I see the effect volume has on price/ and equally when volume has lack of effect, as a major indicator of sentiment. 

Reading volume can be similar to "reading the tape" and often will uncover what the wholesale side are trying to hide. Hiding large transactions on a time chart would be quit easy, volume chart can show when the same amount of volume fails to move price as much as has happened in the preceding volume candle.This means there is volume coming from the other side of the move, if price then stops changing but volume continues, you likely have a large player active against the trend.

I dont explain well, nor do i type as fast as I can think, but over the last 18mths reading volume have developed a much greater understanding of where price is likely to go, than I have after 10yrs of looking at time based charts.

If the market opens at 00 seconds and everyone has their favoured time chart close each candle at the same time as everyone else, it becomes easy for major players to buy/sell one direction for part of that minute then reverse for the last few seconds which then appears as good volume and direction opposite to what the biggest volume is actually doing. Repeat the process for several minutes and you have a 5min chart appearing to head opposite to where the major volume is really going. It does not take long to have retail traders hooked on the "apparent" move.

By adjusting the volume which appears in each volume candle it is possible to see this process in action and more easily catch the moment when a move exhausts and price changes direction as well as having a better  understanding what is really happening. 
Tick charts attempt to do similar yet are not as efficient because they count orders not volume and an order can be 1 or 1 million, tick chart sees both as equal when clearly they are not

I use volume analysis and find it valid on long term  periods of daily weekly even monthly timeframes.
I continue to use other indicators in my decision process, although they are playing a smaller part than ever before, at the same time my win/ loss is improving and % win increasing also.
Some of the improvement could be attributed to improved skills due to continued experience in trading but I believe volume analysis is the main factor in my improvement. I will continue to explore volume as a trading tool and expect further results as my understanding increases.

Cheers,M


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## Naked shorts

*Re: Volume as a trading signal*



tech/a said:


> Here are 2 typical consolidations with clear support and resistance boundaries.
> 
> We see them every day and the question everyone asks is how can we be sure to the best of our technical ability which way these consolidations will break OR will they just continue to drift.
> 
> There are clear clues in both charts based on pure volume and range.
> Before I mark them up any comments/opinions/observations?
> 
> How would you trade these?




I would watch to see if someone starts bidding it up in the DOM tech 


But in that first case picture I would buy because of that last volume spike, then once it had moved up, I would buy again on any dips... unless of course it runs into massive volume up there. 

Second case, with the lack of volume, it looks basically like a pennant with its decreasing volatility. I would be likely to buy at the bottom of that range, because it spiked up before it entered that range and didnt move back down quickly.


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## Mistagear

*Re: Volume as a trading signal*

Hi Tech,
Comments on the charts 
Chart 1 .

The first test higher which created the pivot high (beginning of your resistance line) with a wide range candle was on lower volume than prior up candles, suggesting weakening move, next candle failed to extend on higher vol which reads a move lower expected.
3 candles down to test support was on relatively low vol.. reads as does not have enough volume to take it lower
Then 3 candles higher,again not enough volume to take price higher so price again needed to test support.
Next test of support (wide range candle) opened at support, traded lower and then closed up on good volume ..reads bullish
Next 2 candles almost no volume down..reads bullish
I would buy the next close above the pivot low candle's high which had changed the sentiment to bullish.
The last few candles had high volume on the up days, low volume on the down days ..reads still bullish.
The last candle showing had high volume for a short candle which means there was sellers at the obvious resistance so i would tighten my stop to just below the low of the last red candle, but considering the increase in volume in this move up compared to the prior attempt at breaking the resistance, I would say odds were in favour of a break higher through the resistance..

Second Chart...

A high volume attempt failed at the left side of the chart and little interest for me after that with no conviction either way. Small candles and small range = meandering sideways.

Gee, a five second look at a chart takes a whole lot of explanation 

Cheers, M


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## ThingyMajiggy

*Re: Volume as a trading signal*

First chart, would have probably bought on 2nd red bar from the right, the test like bar. Not so sure about higher prices at the right edge, last red bar is a positive sign, but that last bar makes me a bit iffy about higher prices, being at the top of the range, and it hasn't closed higher, narrow range, would have liked to see that last bar break the range. 

Second chart doesn't interest me at all, wouldn't go near it. 

To be honest I don't really pay attention to volume unless its extreme or none, so unless it stands out as something different in other words, otherwise I don't even notice it.

....but that's just me.


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## Joe Blow

*Re: Volume as a trading signal*



tech/a said:


> My topic heading was purely VOLUME however someone has altered it.
> 
> If you wish to alter it I would prefer.
> 
> Volume---how can it be used in trading.




Sorry, that was me. 

With more than 14,000 threads here at ASF I sometimes need to retitle threads to be a bit more specific, otherwise we end up with a dozen threads on volume related topics all called "Volume". 

Have retitled it again according to your suggestion.


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## $20shoes

From an educational perspective this chart is interesting: wide ranging days, closes well off both the highs and lows. 

At first glance, you would say that sellers keep dumping which accounts for the shooting stars and the offloading should weaken the price ( and it certainly does on some subsequent days). 

But are buyer's absorbing this supply?  Why is there an overall upward bias? Are the last few days of trading pointing to a new run - some would say the volume is too heavy and masking supply.


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## tech/a

I look for a few things which *arent exactly text *book in a chart when a stock which is trending (Regardless of timeframe) pauses in consolidation.
I look inside that consolidation for clues---to either continue to hold---Buy---Sell---Or add to a position.

Here is the first.Using the 2 charts initially posted as examples.


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## tech/a

Now the 2 charts above are actually taken from the same chart.
Now I have put them together and introduced the concept of VOLUME Support and resistance Zones.

You can now see how these 2 concepts of volume analysis can be used when analysing a consoildation area---large or small.
You can also see a myriad of ways to trade them from a number of signals.
Next I will comment on $20 sheos chart from my own perspective.

Click on chart to expand


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## tech/a

To $20Shoes chart.
You need a little more chart to see the big picture hope you dont mind shoes.
Wont be long and we will see what happens---my money is on a resistance and continuation of the ranging---unless we get a strong gap and volume to suit above the obviuos resistance.

Click to expand.


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## Timmy

This is a great thread thanks tech.

Re your comments on low volume.  I have a chart I use to highlight low volume events to me, very helpful indeed.


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## marketsurfer

We always rely on research when making trading decisions.  The research has indictated that volume has little to do with price.  However, strong up days combined with high volume-- specifically largest up day in 10 days combined with largest volume the returns over the next day were up .25%, next week up .60% and next month up 1.45%.  This was the only edge the research discovered in using volume


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## tech/a

marketsurfer said:


> We always rely on research when making trading decisions.  The research has indictated that volume has little to do with price.  However, strong up days combined with high volume-- specifically largest up day in 10 days combined with largest volume the returns over the next day were up .25%, next week up .60% and next month up 1.45%.  This was the only edge the research discovered in using volume




To a large degree I do agree on high volumes,however extremeties(High and Low) tend to hold the key.

Any chance of getting that research.I'm interested in exactly what aspect of volume (High.Low,At resistance,at Support after X periods of X volume,on large range days on very narrow range days---its endless)was researched and *who by*. PM me and Ill give you an email address.

*Could you define what "edge*" meant from the research.You often hear "edge" bandied around without an explaination as to what edge actually is?

I think I'll start a thread on this topic alone.




> We always rely on research when making trading decisions.




That we do and all we can do is anticipate from our analysis how a trade will perform.
Frankly if my anticipation is in correct 3 out of 4 times and when its correct I have a long and successful trade more than covering previous losses---I'm a happy camper.


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## professor_frink

marketsurfer said:


> We always rely on research when making trading decisions.  The research has indictated that volume has little to do with price.  However, strong up days combined with high volume-- specifically largest up day in 10 days combined with largest volume the returns over the next day were up .25%, next week up .60% and next month up 1.45%.  This was the only edge the research discovered in using volume




Hi surf,

What instrument is that test on?


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## professor_frink

Just on the topic of volume, here's a great post by Rob Hanna on volume on breakouts in the US markets:

http://quantifiableedges.blogspot.com/2010/03/testing-common-knowledge-about-volume.html


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## $20shoes

tech/a said:


> To $20Shoes chart.
> You need a little more chart to see the big picture hope you dont mind shoes.
> Click to expand.




Not at all and appreciate your feedback. 
My concern with the last few trading days is that their hasn't been an efficiency in price movement with the commensurate volume that has remained consistently strong last week. 

There is a lower probability of a breakthrough - that is what the volume is telling us right now. 

One thing that is seemingly counter-intuitive to some Tech, and I have seen you mention this before, is that you don't necessarily need volume for a run. It is the lack of volume, or rather the drying up of sellers that allows the demand to translate into higher prices. So where marketsurfer mentions that research, it is rather the absence of volume that can paint the picture ( like your test days on low volume). 
High volume days are a breed of their own and need to be thought about in the context in which they occur.


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## tech/a

$20shoes said:


> Not at all and appreciate your feedback.
> My concern with the last few trading days is that their hasn't been an efficiency in price movement with the commensurate volume that has remained consistently strong last week.
> 
> There is a lower probability of a breakthrough - that is what the volume is telling us right now.
> 
> One thing that is seemingly counter-intuitive to some Tech, and I have seen you mention this before, is that you don't necessarily need volume for a run. It is the lack of volume, or rather the drying up of sellers that allows the demand to translate into higher prices. So where marketsurfer mentions that research, it is rather the absence of volume that can paint the picture ( like your test days on low volume).
> High volume days are a breed of their own and need to be thought about in the context in which they occur.




Exactly.


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## motorway

The research on price volume relationships is interesting.
But not definitive 

The key is in that word relationship...
I think wyckoff was right
It is price ( range ) volume and time that together tell the story..

Have a look at this paper
it mentions some of the models 

http://www.accessecon.com/pubs/EB/2008/Volume7/EB-08G10010A.pdf

Volume can be new information ( leads price )
Volume can be dispersal of information ( lags price )
Volume can just be difference of opinions ( low volume will then lead price )
Volume can be just NOISE ( feedback )

Price leads Volume , and Volume leads Price

But all factors are telling a story together
that unfolds



Motorway


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## tech/a

motorway said:


> The research on price volume relationships is interesting.
> But not definitive
> 
> The key is in that word relationship...
> I think wyckoff was right
> It is price ( range ) volume and time that together tell the story..
> 
> Have a look at this paper
> it mentions some of the models
> 
> http://www.accessecon.com/pubs/EB/2008/Volume7/EB-08G10010A.pdf
> 
> Volume can be new information ( leads price )
> Volume can be dispersal of information ( lags price )
> Volume can just be difference of opinions ( low volume will then lead price )
> Volume can be just NOISE ( feedback )
> 
> Price leads Volume , and Volume leads Price
> 
> But all factors are telling a story together
> that unfolds
> 
> 
> 
> Motorway




Exactly again.
What an interesting and diverse topic to apply to your trading.
Fascinating!


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## Synergy

For the first time I understand every line of a motorway post 

Are you sure you didn't forget to hit the 'encrypt' button motorway?

I use volume as a key part of my entries, but not so much after that. I initially tried to put a condition into my system that allowed the price to break my stop (off market stop), so long as the volume was very low. Interestingly, what I ended up with is a system that exits on extemely low volume (next day), regardless of price. In my case, I suspect this works because I trade rather illiquid stocks, and low volume is not a good sign of things to come. 

The difficult thing i find with volume, and end of day data, is candles don't tell the whole story. Without going to different timeframes it's impossible to tell whether the volume was going down, or up, or all at the open or close.


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## Wysiwyg

Synergy said:


> *Interestingly, what I ended up with is a system that* *exits on extemely low volume (next day), regardless of price.* In my case, I suspect this works because I trade rather illiquid stocks, and low volume is not a good sign of things to come.




That is a bogey in system testing in my opinion. Spread is generally greater with illiquidity hence in ALL my systems testing I have a formula limit (courtesy of H. Bandy).  
So for an n period the average turnover has to be greater than a nominal figure (high enough to allow me to enter and exit without a problem)  and this is calculated by finding an average by *multiplying the close price times the close* *volume over an n period*. Then this average has to be greater than a nominal amount.
It is an approximation of the average turnover for an n period.


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## Synergy

I use a volume filter also, but that doesn't stop low volume days, or a string of low volume days. And I trade relatively illiquid stocks by choice, so not complaining.

Here is a chart for discussion.


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## tech/a

> by multiplying the close price times the close volume over an n period




liquidity filter.

Plus my take on the chart presented
Mostly from a volume /range point of view.
There is a little here on breakouts and tops of Patterns/and Trends.
Next I'll discuss both.
Click to expand


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## Mistagear

Tech, 
Thanks for your comments, and others also for posting.This thread and your explanations are helping to expand my understanding of VSA, much appreciated.
Cheers, M


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## satanoperca

Thanks Tech/A for the explainations.

Just one question, do you also take into consideration the overall market conditions for the day, days or week of volume you are trying to read?

Ie If the market had a strong up day, how did this effect the volume/price on the day of the stock in question?

Or the market has a large down day, but the stock had a low volume tight range up day. Wouldn't this provide a larger clue to the strength of the individual stock than just looking at the volume/price of the stock alone.

Cheers


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## tech/a

satanoperca said:


> Thanks Tech/A for the explainations.
> 
> Just one question, do you also take into consideration the overall market conditions for the day, days or week of volume you are trying to read?




No not generally however you and I will note that some closely correlated stocks will certainly mimic the/an index and as such often Volume and range in a number of stocks will pre empt an index.



> Ie If the market had a strong up day, how did this effect the volume/price on the day of the stock in question?




If strong turns to extreme then all are going to react. Other than that correlation will be the key. Not something I look for.



> Or the market has a large down day, but the stock had a low volume tight range up day. Wouldn't this provide a larger clue to the strength of the individual stock than just looking at the volume/price of the stock alone.
> Cheers




Correlation again.Each on their own merits.


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## WaveSurfer

tech/a said:


> ....Having traded VSA now for over 3 yrs I find it extremely important in my day to day management of my discretionary trading.....




Hi tech,

Would you mind elaborating to this dead head on what VSA is short for?

Searching Google returned everything but the answer I was looking for (http://www.google.com.au/search?q=VSA). Volleyball South Australia, The Victorian Speleological Association.... lol

:alcohol:


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## Whiskers

WaveSurfer said:


> Hi tech,
> 
> Would you mind elaborating to this dead head on what VSA is short for?
> 
> Searching Google returned everything but the answer I was looking for (http://www.google.com.au/search?q=VSA). Volleyball South Australia, The Victorian Speleological Association.... lol
> 
> :alcohol:




Volume Spread Analysis.


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## WaveSurfer

Whiskers said:


> Volume Spread Analysis.




Cheers Whiskers.


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## tech/a

Yeh I know what you mean.

I had a lot of trouble finding the National Dyslexic Association until I looked up *ADN*

This is what I use.

http://www.tradeguider.com/

I know Gavin well enough to have a beer.
But these guys while they have a great product also are the consumate in Marketing.
Extracting every last $$ their clients are willing to part with.
Gavin un fortunately is so passionate about Tradeguider and his company that he takes up 50% of his trading lectures selling it.
This is REALLY annoying.
Not to mention that Gavins Voice send you to sleep---all of which I have told Gavin.

The concept derived from Wyckoff is very powerful and one of my main tools.
Yes I use it in combination with other analysis.


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## tech/a

WaveSurfer said:


> Thanks tech.
> 
> This looks extremely interesting and best of all logical (can't argue with the laws of supply and demand). I just found the book "Master the Markets" in your other thread. Will be reading this one with great interest. And doing some research on Mr. Wyckoff.
> 
> Oh, how does this relate to forex? *I see it is being used; but on tick volume *- is this correct? What are your thoughts on this?
> 
> Cheers again mate




Yes correct.From what Ive seen in some of their live trade webinars it works just as well.

Ive not traded Forex.

But traded the SPI for a couple of months.
Enjoyed it and did ok but dont have the time to trade short term intraday due to a group of people who want to work for me and another lot who want me to build things.

Look forward to trading some currency pairs. Should get the feed and watch the action for a few months to get a feel.

Video after Video here.
Just flick past Gavins Dronning.

http://www.youtube.com/results?search_query=Tradeguider+forex&search_type=&aq=f


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## AzzaB80

I use Market Profile in combination with volume to determine my strategy for a given day. 

When we have a balanced market in that the Market Profile chart looks like a bell curve,  price will normally be attracted to the point of control (which is normally the greatest volume @ price on a balanced day) with any break away needing significant volume compared to average to be sustained. If volume is below average I look at fading for a mean revision trade, if volume is above average I go with the break out.

In a trending market I use volume for looking at directional performance. Volume combined with direction and value area placement can give a guide to strength of the current trend.   This is all from Jim Dalton’s Mind over Markets if anyone is interested.  

Also low relative volume can also indicate lack of longer time frame participants which normally means day/short term traders are in control. I find obvious support/resistance areas are more likely to be respected on these days.


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## tech/a

> Jim Dalton’s Mind over Markets




Great book on a topic I find has high technical merit as a trading platform.
CBOT had a fee E book which I got a hold of and is a tremendous source for anyone interested.

What software do you use to plot profiles?


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## ThingyMajiggy

tech/a said:


> All I can say is Ive watched Sebastian (Forget his last name)





Manby


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## AzzaB80

tech/a said:


> Great book on a topic I find has high technical merit as a trading platform.
> CBOT had a fee E book which I got a hold of and is a tremendous source for anyone interested.
> 
> What software do you use to plot profiles?




I'm surpised it doesn't get mentioned more around here as that and his second "Markets In Profile" are by far the best trading books I've ever read. Even if your not into Market Profile.

I was using the Fin Alg plug in for Ninja Trader but I've recently switched to Investor R/T which is much better if you can get used to the interface. Still use Ninja for execution though.


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## roland

Here is CPL for discussion, a long period of consolidation until an increase in volume pushes it over the resistance level. A slight drop off in volume as the resistance is tested. Once new support is confirmed, volume increases to support the increase in SP, then a blow off with high volume at a the charts high.

Finally volume is dropping off to indicate:

1. New support level?
2. Reversal?

I suppose if we look at the Stochastic, could we assume that we should have a continuation of the rise.

Have I read this correctly?


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## tech/a

Roland

Here is my take.

Firstly the very big picture---Tells us something already!
I'm preparing the now picture.

Daily chart


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## tech/a

My short term take.

Click to expand


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## roland

tech/a said:


> My short term take.
> 
> Click to expand




Well, the volume statistics do help make the chart more readable, but I am not seeing how it could help with predicting an outcome.

If the volume had not of dropped off at the double top on the end of the chart, then most likely we would have breached $0.50, and of course our volume indicator would have looked different.

We could look back into the chart to see what happened last time we topped, and we have a similar occurrance of a drop off in volume followed by a run to the support line.

Maybe CPL is too thinly traded for me to start with....


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## roland

HGG is an interesting comparison to CPL.

It's the opposite, rising volume to support the falling SP with a peak in volume at, or near the support level.

We fall off in volume at we approach resistance. No blow off this time. I would guess at a slight consolidation until a progression further past the resistance level.


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## tech/a

roland said:


> Well, the volume statistics do help make the chart more readable, but I am not seeing how it could help with predicting an outcome.




Not predicting anything just anticipating what could happen.



> If the volume had not of dropped off at the double top on the end of the chart, then most likely we would have breached $0.50, and of course our volume indicator would have looked different.




But it has.



> We could look back into the chart to see what happened last time we topped, and we have a similar occurrance of a drop off in volume followed by a run to the support line.
> 
> Maybe CPL is too thinly traded for me to start with....




We could and it looks like this.
Familiar?

HGG I see very differently I'm afraid to your analysis.
No room for guessing.
Get a hold of "Master The Markets" shown in the link above---it will be a great help.
Your reading of volume will literally be turned upside down.

HERE https://www.aussiestockforums.com/forums/showthread.php?t=13804


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## roland

mmm, I think I may be looking at volume incorrectly.

Correct me if I am wrong, but large volumes are not likely to be the general market. I have been looking at volume as being a collective of general traders 

Aha, we are seeing the market makers !  (if that is the right term)


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## Boggo

This is an example of what my basic Metastock scan is looking for, a volume uptrend associated with a possible breakout.

(click to expand)


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## roland

Am I reading this correctly:

HGG is looking to have a high volume day. A volume spike of around 10% of an average day has pushed the SP to a 3 month high. Would this be an attempt at distribution?

The SP has been rising on decreasing volume indicating a drop off in demand - is this correct? We now have the smart money pumping the high ready for a bail out and reversal.

I thought I was understanding volume until I started to write it down...


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## roland

Also, it's a bit hard watching what is happening with volume when some large trades don't show up in the queue. 575,000 sold at $2.40 without affecting the depth ?????


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## Trembling Hand

roland said:


> Also, it's a bit hard watching what is happening with volume when some large trades don't show up in the queue. 575,000 sold at $2.40 without affecting the depth ?????




Dark pools.

:vader:


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## rnr

roland said:


> Am I reading this correctly:
> 
> The SP has been rising on decreasing volume indicating a drop off in demand - is this correct?




Roland,

Decreasing volume together with increasing prices indicates a drop in supply!


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## rnr

roland said:


> Also, it's a bit hard watching what is happening with volume when some large trades don't show up in the queue. 575,000 sold at $2.40 without affecting the depth ?????




Roland,

Would suggest you have a look at the Course of Sales for HGG (make sure you click on more and then View all Trades).
I believe that any trade that has an XT in the Condition Code column is not reflected thru the depth screen you are watching. Refer to webIRESS help for a description of the Condition Codes.
Also interesting to see the number of trades done in succession where the volume traded is identical........very systematic without hitting the market with one larger order.


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## WaveSurfer

First VSA trade 

I figure that even though FX futures vol is only a very teeny tiny portion of the market, there must be some people trading it who know what they're doing. LOL

Point A - Increase in volume on the breakout (pushing through supply??)
Point B - Here is my long entry (test/no supply is this correct?)
Point C - I chickened out and took my 5 tick gain :dance:

Stop was just below the test/no supply bar (a tick or 2 below it and I would have been out).

I think I get the picture, except for point C. I read it as a wide spread up bar closing well off the highs (sellers stepping in?).


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## WaveSurfer

Well, I guess this shows that I was a weak holder and was shaken out of a good position. The high volume that made me call it quits was in fact not high at all. Black oval is where it all was at before.

Ahh well, you get that. Lesson learned.


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## roland

WaveSurfer said:


> First VSA trade
> 
> I figure that even though FX futures vol is only a very teeny tiny portion of the market, there must be some people trading it who know what they're doing. LOL
> 
> Point A - Increase in volume on the breakout (pushing through supply??)
> Point B - Here is my long entry (test/no supply is this correct?)
> Point C - I chickened out and took my 5 tick gain :dance:
> 
> Stop was just below the test/no supply bar (a tick or 2 below it and I would have been out).
> 
> I think I get the picture, except for point C. I read it as a wide spread up bar closing well off the highs (sellers stepping in?).




Well done WaveSurfer. I would have entered at point C and stuffed it up. I guess the secret was to hit it just as it broke the resistance line you had drawn..


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## WaveSurfer

roland said:


> Well done WaveSurfer. I would have entered at point C and stuffed it up. I guess the secret was to hit it just as it broke the resistance line you had drawn..




Thanks mate.

Yes you are right. I believe there were two clues/chances to get positioned early. The increase in volume leading up to and on the break (possible aggressive entry). And the final confirmation - testing the area of supply which showed absolutely no selling pressure (conservative entry).

From my limited research so far, it appears that forex has a lot of shake-outs. I was just a victim of one of them lol


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## Trembling Hand

WaveSurfer said:


> From my limited research so far, it appears that forex has a lot of shake-outs. I was just a victim of one of them lol




A bit of context is all you needed yesterday. Everything (FX, commods, equity) was green and taking out recent highs. In that type of market its a matter of buying pull backs and hanging on.

Top down trading fundamentals on a short term trading are much under utilised, especially in regards to short term analysis application. IMO.


----------



## WaveSurfer

Trembling Hand said:


> A bit of context is all you needed yesterday. Everything (FX, commods, equity) was green and taking out recent highs. In that type of market its a matter of buying pull backs and hanging on.
> 
> Top down trading fundamentals on a short term trading are much under utilised, especially in regards to short term analysis application. IMO.




Great advice, thanks mate. I sort of came to the same conclusion after reflecting on it last night.

Fundies and I have not seen eye-to-eye as of yet. Lack of expertise on my part - no questions about that. I just struggle to decipher the useful from the useless.


----------



## nomore4s

Trembling Hand said:


> A bit of context is all you needed yesterday. Everything (FX, commods, equity) was green and taking out recent highs. In that type of market its a matter of buying pull backs and hanging on.
> 
> Top down trading fundamentals on a short term trading are much under utilised, especially in regards to short term analysis application. IMO.




Good point TH,

Understanding the overall position & mood of the market is much overlooked by most short term traders.

Since I've been trading the SPI on an intraday basis I've also found most if not all traditional TA patterns that you can use on trading shares EOD just don't work and if relying on those set ups to trade you will get crucified.


----------



## roland

Is API in "Absorption" phase?

- at a >6 month low
- Point A on the chart, a shake out of weak holders and stop loss triggers - marked down to a low finishing on a high, large spread. (maybe not enough volume?)

- Point B, another low test

- C through to D, absorption

- Point E, shake down test, low volume, good spread, finish on a high.


Volume disappearing on the low tests - shake downs finished?


----------



## tech/a

My take.
API


----------



## roland

tech/a said:


> My take.
> API




Hi tech, thanks for that - would you mind drawing in a couple of bars that would show me what absorption, followed by a positive reversal would look like


----------



## WaveSurfer

nomore4s said:


> Good point TH,
> 
> Understanding the overall position & mood of the market is much overlooked by most short term traders.
> 
> Since I've been trading the SPI on an intraday basis I've also found most if not all traditional TA patterns that you can use on trading shares EOD just don't work and if relying on those set ups to trade you will get crucified.




Interesting you say that nomore. I have traded the SPI a couple of times now, only because I recognised certain patterns that I see in forex a lot. More so, the failed patterns which then turn and move in the "pattern forecast" direction. Bit like a shake-out I suppose. Still, I acknowledge and agree 110% with what you're saying there mate; and is the reason why I only play it with chicken feed (axis allows you to trade $1 ticks). Will not be committing some serious dough until I learn the way she moves (I do like the way she moves though ).

I was a little trigger happy with my first VSA trade. My usual trading style had me looking for short opportunities as it was near the top of a range. I was however anticipating a move up first, so I guess there was some confluence in my madness there.

Couldn't agree more on the market mood. My motto for very short term fx trades is to buy when it's up and sell when it's down. Not a sure fire method, but keeps me out of trouble a great deal of the time.


----------



## roland

Fielding for comments, if I have read GBG correctly.

A huge spike in volume hitting a 2 month high with a close below the days high. Would this be considered a "Buying Climax"?

Chart history (as shown) shows a quick drop off on most of these similar patterns.

What did I do?, Well - I sold at a profit expecting a fall off tomorrow.

What would you have done ?


----------



## Wysiwyg

roland said:


> Fielding for comments, if I have read GBG correctly.
> 
> What would you have done ?




I haven't read the billions of dollars deal announcement but if it reads as a solid deal for GBG  I would have hung on. Not only charts in my assessments. Going to read the ann. now.


----------



## chrislp

It looks bullish to me but don't really like the excessive volume. Using my style of trading I would tighten the stop outside of todays price action & see what happens. 

IMO it will go sideways or correct for a couple of days & continue. If however there is a bearish reversal & large volume tomorrow that to me would be the signal it has reached a high for the short term.


----------



## Trembling Hand

roland said:


> What would you have done ?




Waited to see what tomorrows bar looked like. Especially if I was holding already for longer than the last 2 weeks. If the trade was just a quick flip then, mission accomplished I guess.


----------



## Whiskers

roland said:


> Fielding for comments, if I have read GBG correctly.
> 
> A huge spike in volume hitting a 2 month high with a close below the days high. Would this be considered a "Buying Climax"?
> 
> Chart history (as shown) shows a quick drop off on most of these similar patterns.
> 
> What did I do?, Well - I sold at a profit expecting a fall off tomorrow.
> 
> What would you have done ?




Not sure I can read much or anything just out of volume, but there's an evening star on that last peak on the daily and weekly chart.

I think you played safe selling.


----------



## Trembling Hand

Whiskers said:


> Not sure I can read much or anything just out of volume,



You should throw that rubbish EW out Whiskers, as well as the MACD, and jump on board the Volume game. Everyone is playing it now.

EW is so last century.


----------



## Whiskers

Trembling Hand said:


> You should throw that rubbish EW out Whiskers, as well as the MACD, and jump on board the Volume game. Everyone is playing it now.
> 
> EW is so last century.




Not so fast, or I'll go mad... I'm getting sfa to hang my hat on from pure volume alone so far.


----------



## Wysiwyg

Whiskers said:


> Not so fast, or I'll go mad... I'm getting sfa to hang my hat on from pure volume alone so far.



Apart from the drop back in price (usually) I can't read anything into a volume spike either. Sell on a spike for short term holders I suppose would be one way.


----------



## tech/a

> What did I do?, Well - I sold at a profit expecting a fall off tomorrow.




So this wasn't a VSA trade it was a trade governed by fear.

There are 2 close resistance areas.
One where we are now and another "zone" at $1.20ish.
(zone---conglomeration of closes in a price area).

Need to wait for the next few bars.
What you will have if you were still in is an area which makes a good stop.
The Lower part of the gap.
Gaps are thrusts by buyers to get stock at whatever is available.
These holders generally stay around for a while.

Personally I would now be looking to see where the volume ISNT on a test of the high of the bar or the low.
Continuation on average volume will indicate lack of supply.


----------



## tech/a

Resisting at $1.25/28 area on high volume.


----------



## Frank D

tech/a said:


> Resisting at $1.25/28 area on high volume.




And what's that telling you?


----------



## roland

Frank D said:


> And what's that telling you?




A lot of sellers cashing out?


----------



## tech/a

Frank D said:


> And what's that telling you?




Well at a guess I'd be thinking plenty of supply at these levels.
From the hrly chart I'm seeing supply waning.
Waiting for that bar/s where the volume isnt.

Anything to add Frank?


----------



## Frank D

*Looking at price action alone....*


You have a breakout of the February highs (single month)

I would normally look at the price action and already factor in a *‘break
 and extend’ pattern *into higher highs into April.

You have a 3-week sideways pattern above the previous highs in
 February and *last week UP move in the month should extend upwards
 into the next month.*

This verifies the expectation based on the break & extend pattern 
and moving from the previous month (February) into the next month 
(April)

Personally I would think *buyers are in control in this situation*, but I 
would hope the traders would already be long and not trading longs around 
these highs.

Traders should use the previous month breakout as support and trade 
longs and use the 3-week 50% level or 5-day lows as support during March.

If this spike upwards was occurring in April (higher highs) I would
 lean towards the potential of sellers in control, especially if the price
 action was on a Friday & Monday opens lower.

Treat each Quarter as a single cycle. Starting a Quarter (April) around 
the highs increases the risk that prices can rotate back during the next 
cycle.

And today is the last day of the Month & the Quarter.

This isn't based on Volume, as I'm not a fan of volume, just the price
 action alone.


----------



## ThingyMajiggy

Frank D said:


> This isn't based on Volume, as I'm not a fan of volume, just the price
> action alone.




I was going to ask what you thought of volume, as I have never seen it on your charts. Have you done testing or experimented with volume in the past? Or is it something you just haven't gotten on with? I find it interesting, you are probably one of the most accurate forecasters of the market I have seen, yet you don't use volume, I've always gone about it as though its something of upmost importance, but not necessarily it seems.


----------



## Frank D

Volume is subjective unless it’s being optimized with something else.

It doesn’t provide me with an edge, as I will never know when volume will appear, so why would I use something that can’t be known in advance.

The only thing that provides me with an edge is TIME, because it’s the only thing in the market that can be accurately predicted with precise accuracy.

In my opinion Time is the arbiter of probability and risk reward strategies, as it clearly defines the dynamics of the market and allows traders to know where they should or should not be trading in advance.


----------



## tech/a

Frank D said:


> *Looking at price action alone....*




Let me get a handle on your notes.



> You have a breakout of the February highs (single month)




I presume you mean MARCH.



> I would normally look at the price action and already factor in a *‘break
> and extend’ pattern *into higher highs into April.
> 
> You have a 3-week sideways pattern above the previous highs in
> February and *last week UP move in the month should extend upwards
> into the next month.*




Should --not known but anticipated.



> This verifies the expectation based on the break & extend pattern
> and moving from the previous month (February) into the next month
> (April)




A bit confused here the previous month is March.



> Personally I would think *buyers are in control in this situation*, but I
> would hope the traders would already be long and not trading longs around
> these highs.




Again an expectation not known.



> Traders should use the previous month breakout as support and trade
> longs and use the 3-week 50% level or 5-day lows as support during March.




A plan yes.



> If this spike upwards was occurring in April (higher highs) I would
> lean towards the potential of sellers in control, especially if the price
> action was on a Friday & Monday opens lower.
> 
> Treat each Quarter as a single cycle. Starting a Quarter (April) around
> the highs increases the risk that prices can rotate back during the next
> cycle.




So there is a risk then that this may actually rotate off these highs.



> And today is the last day of the Month & the Quarter.
> 
> This isn't based on Volume, as I'm not a fan of volume, just the price
> action alone.




Fair enough I personally think the inclusion of volume with price action particularly WITHIN a bar can be a solid indicator.But like you a personal opinion.


----------



## tech/a

Frank D said:


> Volume is subjective unless it’s being optimized with something else.




Why optimised?



> It doesn’t provide me with an edge, as I will never know when volume will appear, so why would I use something that can’t be known in advance.




You cant know anything with certainty in advance other than death and taxes.Personally I can anticipate price action through volume and price action itself.



> The only thing that provides me with an edge is TIME, because it’s the only thing in the market that can be accurately predicted with precise accuracy.
> 
> In my opinion Time is the arbiter of probability and risk reward strategies, as it clearly defines the dynamics of the market and allows traders to know where they should or should not be trading in advance.




Frank marking a likley 5 day/Weekly/monthly/Quaterly or Yearly anticipated high or low and 50% level hardly guarentees accurately predicted prices.

Right now with the above analysis it is biasing toward long but with a caveat over a possible short move.
Neither will be clear until after the fact---hardly predictive!

As for THIS trade for me I'm still on the fence waiting.
The 20 minute chart is giving me a low risk long opportunity.
Back in a minute with the chart.


----------



## tech/a

20 min GBG chart


----------



## Frank D

tech/a said:


> You cant know anything with certainty in advance other than death
> and taxes.




You won’t know when you'll die unless you kill yourself. And not
 everyone pays the same taxes each time. However, the probability of
 them both happening is extremely high. (100%)

And I didn’t say accurate prices, I said *Time.*

Time is known in advance:- precisely and can be accurately predicted.
Each timeframe ends and begins with precise accuracy. (100%)
There’s no deviation in its accuracy whatsoever.

All I’m interested in is Support/resistance and likely trends:- risk &
 reward strategies, and '*probability' *associated with those levels.

As most probability and risk/reward scenarios are associated with Support/resistance & trends:-known patterns in advance

I happen to use Time to define dynamic support & resistance & trends.


----------



## tech/a

Frank D said:


> You won’t know when you'll die unless you kill yourself. And not
> everyone pays the same taxes each time. However, the probability of
> them both happening is extremely high. (100%)
> 
> And I didn’t say accurate prices, I said *Time.*
> 
> Time is known in advance:- precisely and can be accurately predicted.
> Each timeframe ends and begins with precise accuracy. (100%)
> There’s no deviation in its accuracy whatsoever.
> 
> All I’m interested in is Support/resistance and likely trends:- risk &
> reward strategies, and '*probability' *associated with those levels.
> 
> I happen to use Time to define dynamic support & resistance & trends.




Frank you determine support and resistance on an algorithm based on past price levels then place it from the high and low of that TIME frame.(plus a little more but wont go into it if people are interested they can pay for your book as I did)---but you know I know how you calculate it.
Its a good calc.

Your not using time for anything but a periodicy definition.
Your probability hasnt been tested (as far as I'm aware) but is (as defined by you) a long term personal observation.
I dont have any problem with any of the above but to say your "Using" time is stretching the definition of usage---in my view.



> As most probability and risk/reward scenarios are associated with Support/resistance & trends:-known patterns in advance




They maybe known but will not be proven.To say that you know with ANY certainty other than 50/50 is impossible---unless of course you have statistics (Not personal observation) which support your insistance that your support resistance and trends in any given timeframe (time) can be predicted with any accuracy greater than 50/50.

Not having a go here but your analysis is no different to any other in that it is only a setup which has just as much chance of playing out than any other.
VSA/Elliott/Point and Figure/Conventional analysis.


----------



## Frank D

tech/a said:


> Your not using time for anything but a periodicy definition..




Yes I am:- Support, resistance, trends, probability and Risk reward scenarios.

Whether trading long term trends or short-trerm daily patterns.



tech/a said:


> your analysis is no different to any other in that it is only a setup which has just as much chance of playing out than any other.
> VSA/Elliott/Point and Figure/Conventional analysis.




That’s interesting….

I’m yet to see any other method that provides a template as robust for support/resistance and trend identification.

_*A Dilernia Principle* signifies a point or points of probability on 
a subject, which allows for the formation of a rule or rules by 
interpretation of the expectant phenomena of events that will be created
 or could occur. In this case, the rules of entry are based on 
significant support around the Quarterly 50% and double Monthly lows.  (page 46)_

Recent patterns in 2010 suggest that something written years ago is still
valid today:- double monthly lows (February) and Quarterly 50% level

And lets’ see if my expectation for the 2nd Quarter plays out.

And I already know my high probability patterns in advance using 'text
 book' *orderly patterns.*

However, the market doesn't always operate as text book patterns, but I know what to look for.



tech/a said:


> _To say that you know with ANY certainty other than 50/50 is impossible---unless of course you have statistics (Not personal observation) which support your insistance that your support resistance and trends in any given timeframe (time) can be predicted with any accuracy greater than 50/50._.




Wrong again….

I have stats:- go to chapter 5 and standard deviation techniques.

Over 10 years the market regresses within a *5-day pattern 63% of the time*

That means I can place shorts and longs around the 5-day ranges and 
know that 63% of the time it won’t break out, and on occasions provide
 a rotation towards the 50% level of 8.5 to 14 points on the S&P (400-700US)

I also know when those odds increase:- around Weekly and monthly highs:- *point or points of probability on a subject *

And I haven’t included using 50% levels as entry levels during trends until 'lines of least resistance' are reached.


If you think my work falls into the same basket as VSA/Elliott/Point and Figure/Conventional analysis you are sadly mistaken.


----------



## tech/a

Frank D said:


> Yes I am:- Support, resistance, trends, probability and Risk reward scenarios.
> 
> Whether trading long term trends or short-trerm daily patterns.




Frank all your doing is extending a line from a point forward and anticipating price to move toward it /resist or be supported at it.Its harly using time.
I could argue that if price remains above a 34 day line drawn as an ema of price then I am using time.
Hardly different to yours.




> That’s interesting….
> 
> I’m yet to see any other method that provides a template as robust for support/resistance and trend identification.




I dont know the rest of the world does ok without your method.There are many swing traders who do well without knowledge of your principals.
Your support and resistance fails just like most others its certainly not fool proof.
Oh and the reason your trends look so orderly is you have standardised Bar range to 22 pts.
Standardise anything and thats what you'll get a nice 45% ----looks good though.



> _*A Dilernia Principle* signifies a point or points of probability on
> a subject, which allows for the formation of a rule or rules by
> interpretation of the expectant phenomena of events that will be created
> or could occur._



_

Are you sure you dont have a penchant for politics---this is Brilliant!

expectant=anticipated




			In this case, the rules of entry are based on 
significant support around the Quarterly 50% and double Monthly lows.  (page 46)
		
Click to expand...


_
Fair enough a point of analysis which will be proven correct or incorrect---so if trading by your principal would you be waiting for confirmation or trading into or away from this?



> Recent patterns in 2010 suggest that something written years ago is still
> valid today:- double monthly lows (February) and Quarterly 50% level




No different to a statment of "divergence has shown to be a good indicator in the past and still would be seen as a good indicator now and in the future"



> And lets’ see if my expectation for the 2nd Quarter plays out.
> 
> And I already know my high probability patterns in advance using 'text
> book' *orderly patterns.*
> 
> However, the market doesn't always operate as text book patterns, but I know what to look for.




We all look for different things you look for your things and I mine we both believe we read our charts and take action based upon high probability setups that we know from testing or observation to be "High probability"
Our initial risk and then trade management takes care of the rest.





> Wrong again….
> 
> I have stats:- go to chapter 5 and standard deviation techniques.
> 
> Over 10 years the market regresses within a *5-day pattern 63% of the time*
> 
> That means I can place shorts and longs around the 5-day ranges and
> know that 63% of the time it won’t break out, and on occasions provide
> a rotation towards the 50% level of 8.5 to 14 points on the S&P (400-700US)
> 
> I also know when those odds increase:- around Weekly and monthly highs:- *point or points of probability on a subject *




Ive not seen any papers from academics who have tested your claims rigorously---simply stating a statistic doesnt make it factual---not to me at least.



> And I haven’t included using 50% levels as entry levels during trends until 'lines of least resistance' are reached.




Again if there are rigorous methods which support the claim that this inclusion further increases reliability Id love to see them.
Lines of least resistance--what are they!




> If you think my work falls into the same basket as VSA/Elliott/Point and Figure/Conventional analysis you are sadly mistaken.




Yes quite true.


----------



## tech/a

Chart update Daily GDN----worth following.


----------



## Trembling Hand

tech/a said:


> Chart update Daily GDN----worth following.




GBN = GBG


----------



## roland

Hey Tech, what do you read into GRR?

A steady and slow increase in SP on very low volume. Had a couple of very high volume days earlier in the month - the Pro's accumulating??

If the Pro's have accumulated I suppose we could expect a high volume day in the future where they will offload.

There was a huge range spike about a year ago at this level - but no volume to read anything into.


----------



## tech/a

Trembling Hand said:


> GBN = GBG



Dyslexia

I'm trading GRR.
Still looks strong to me.


----------



## Frank D

*GBG:- Weekly bars*

As I mentioned yesterday:- a breakout of the highs of the previous
 month will normally continue towards the highs on the next month.

*In this case April:- 1.32-36*

Current resistance in March @ 1.27 disappears at the end of today.

Around April’s levels the risk increases, because the short term 
breakout pattern will complete, but it doesn’t mean the price will 
reverse down.

It’s simply a completion pattern:- break & extend pattern during a 
Quarterly cycle from 1 month into the next.

The 2nd Quarter Target remains 1.48


----------



## tech/a

Frank D said:


> *GBG:- Weekly bars*
> 
> As I mentioned yesterday:- a breakout of the highs of the previous
> month will normally continue towards the highs on the next month.
> 
> *In this case April:- 1.32-36*
> 
> Current resistance in March @ 1.27 disappears at the end of today.
> 
> Around April’s levels the risk increases, because the short term
> breakout pattern will complete, but it doesn’t mean the price will
> reverse down.
> 
> It’s simply a completion pattern:- break & extend pattern during a
> Quarterly cycle from 1 month into the next.
> 
> The 2nd Quarter Target remains 1.48




Thanks Frank thats clear.

Minor I know but


> Current resistance in March @ 1.27 disappears at the end of today.



End of yesterday?

So what your saying is the line drawn using the TIME of March now extends using the line derived around the March high into the TIME of April.Which has its own TIME resistance of ----

Have I got that?


----------



## Frank D

tech/a said:


> End of yesterday?
> 
> So what your saying is the line drawn using the TIME of March now extends using the line derived around the March high into the TIME of April.Which has its own TIME resistance of ----
> 
> Have I got that?




Yes to the 2nd part.

First part...

Yes March has ended, but I always treat the market using a 
weekly timeframe based on the Weekly timeframe close, which is still 
inside March.

Therefore I would still view the market is going slightly higher, but it can
 still remain 'capped' under the March highs today.

If today rallies on the close and closes much higher, then the upper target 
in April will be higher.


----------



## roland

Volume spike on LYC today looks like a buy signal.

Big volume spike, off near lows on a wide spread, finishing on the day's highs.

Gotta be a good sign


----------



## tech/a

My take on LYC.

While it is a good sign it is also one which comes at a point where timing 
may not YET be the best.
There could be 2R in it currently---a bit of patience may see a setup where
5 or more R could be achieved.
Id be a little patient and will follow if you like.

I like the longer consolidation prior to this bar that the other noted.


----------



## weird

Find it interesting that FD is posting so much in this thread ... whatever his strategy is.  

Volume is an interesting topic, yes many traders do trade without it ... so no points to be added by posting non-volume strategies.

Lets see how it can be used.


----------



## roland

A little glimmer of  "Essence of Volume" with PLA - one of my sleepy holdings.

Thought I picked it last 29/1/2010 on a nice volume spike 

Still held though ....


----------



## tech/a

> "Essence of Volume"




Care to elaborate.


----------



## roland

tech/a said:


> Care to elaborate.




a bit like sniffing the cork


----------



## Wysiwyg

Have been experimenting with low volume/low range for several days to come up with something that may be useful. Within the low vol./low range periods there are several opportunities to change criteria for experimenting. This is good for finding higher probability entry points. Knowing that any trade is only as good as the next bar. 

Since Roland brought up LYC and PLA, I have two images that use low volume/low range markers as examples. The top half markers of each stock image are  unfiltered.

Click on image to expand from blurry.


----------



## Frank D

weird said:


> Find it interesting that FD is posting so much in this thread ... whatever his strategy is.




I only posted in this thread because Tech/A commented on an increase
 in volume at a particular level (resistance).

And his response was an increase in supply at resistance, which is stating the ‘obvious’.

My response was,  'buyers were in control' because of the ‘patterns’ in the market and ‘not the obvious’.



weird said:


> so no points to be added by posting non-volume strategies..




Fair enough, no more comments from me in this thread.


----------



## tech/a

Frank D said:


> I only posted in this thread because Tech/A commented on an increase
> in volume at a particular level (resistance).
> 
> And his response was an increase in supply at resistance, which is stating the ‘obvious’.
> 
> My response was,  'buyers were in control' because of the ‘patterns’ in the market and ‘not the obvious’.
> 
> 
> 
> Fair enough, no more comments from me in this thread.




Frank

Your comments are as valid as any other contributor.
I have enjoyed our exchange and hope you continue to comment on this particular trade and continue with any further exchange.

Thanks.


----------



## Boggo

tech/a said:


> Frank
> 
> Your comments are as valid as any other contributor.
> I have enjoyed our exchange and hope you continue to comment on this particular trade and continue with any further exchange.
> 
> Thanks.





+ 1


----------



## tech/a

Wysiwyg said:


> Have been experimenting with low volume/low range for several days to come up with something that may be useful. Within the low vol./low range periods there are several opportunities to change criteria for experimenting. This is good for finding higher probability entry points. Knowing that any trade is only as good as the next bar.
> 
> Since Roland brought up LYC and PLA, I have two images that use low volume/low range markers as examples. The top half markers of each stock image are  unfiltered.
> 
> Click on image to expand from blurry.




These comments and notes shouldnt be overlooked.
EXTREME low volume bars are a favorite of mine and will take some time later to post up some of what I have discovered.
They are infact an alert and indicator of VSA --- in context---No Supply or No Demand.
Good work Wysiwyg


----------



## roland

Following on with PLA.

Today saw another medium, but increasing volume day with a good spread. Closed quite weak. Good volume with a weak close nearing the resistance level of $1.10 - are we yet into absorption stage of weak holders?

The last attempt at breaching resistance had a much shorter consolidation period, so we may have a better shot this time, but if the volume is not there tomorrow - then I am worried that the weak close today may give us a down candle next session.


----------



## Trembling Hand

roland said:


> are we yet into absorption stage of weak holders?



What does that mean?


----------



## roland

PNA looks much nicer.

Slowly increasing volume with the last 2 x sessions on good volume pushing the SP through the resistance level of $0.54. Definate uptrend since 2nd week February looks to me to be a pretty fair chance of continuation.

Last candle finishing on the high for the day with slightly better volume than the day before. 

My guess would be a slightly higher volume day tomorrow with a better than average spread finishing the day off from the highs but still in the green for the day.


----------



## roland

Trembling Hand said:


> What does that mean?




Hi TH, not sure if I am being baited here, but the follow is an excerpt from Masters of the Markets from TradeGuider:



> If you observe high volume accompanying wide spreads up, this shows that the professional money was prepared to absorb any selling from those locked-in traders who decided to sell – this is known as absorption volume.




I did pose the posting as a question as to whether this could be seen as absorption...


----------



## Trembling Hand

roland said:


> I did pose the posting as a question as to whether this could be seen as absorption...




But it fell from the open. I have never read Masters of the Markets from TG or any other VSA stuff but IMO something thats open at recent highs and fallen on largish vol is weakness.

I would of thought if the big nutz were "adsorbing" any selling the close would not have been as tardy?


----------



## roland

Trembling Hand said:


> But it fell from the open. I have never read Masters of the Markets from TG or any other VSA stuff but IMO something thats open at recent highs and fallen on largish vol is weakness.
> 
> I would of thought if the big nutz were "adsorbing" any selling the close would not have been as tardy?




Good point, probably not enough volume to suggest big wig involvement anyway.

PNA does look better though


----------



## tech/a

*Roland.*
You need to revisit "Master the Markets" and pour through a few 1000 more charts.
Whats your seeing in PLA is massive selling.
You also need to look at overhead resistance at $1.10
Clearly this is an up thrust bar.Enthusiastic buyers started the day and Sellers certainly ended it.
If you are interested in this stock you would need to watch for testing and where the volume STOPS.
Good effort in having a go at it though.

*PNA*
The 6th sees clearly the bar you should be identifying as Absorption of supply.
Yesterday we didn't know that what we knew was that supply was coming in and resisting strongly at 54c There would have been no reason to expect anything more than resistance. As a Trader interested in this stock a conditional buy at say 55.5c would have been a play I would have considered.
(I'm not trading this). Had resistance stuck you would not have been filled.
Your initial stop would have clearly been 50.5c,But again if it was me I would be seriously moving my stop immediately to 53.5c on any close above the high of today.
So we have a clear breakout on even bigger volume with an initial potential of testing the high of 7/1 at around 63-65c 
R/R is a bit measly.


----------



## roland

How does one identify professional volume? It's quite easy to assume that any large volume spike is professional volume, but on news, the hoard can put together a fair amount of volume.....

I'm just studying daily histograms of volume versus time and volume versus price to see if anything clicks in my head


----------



## tech/a

Roland.

My personal view and one held by a few others is that Identifying professional money through volume in the Aussi market is similar to watching pigs fly.
Other than say the top 50 ASX US and European markets Futures and Forex even attempting to identify Professional money is a joke.

Does it matter that you cant identify "Professional" Money clearly in the ASX----NO.


----------



## roland

tech/a said:


> Roland.
> 
> My personal view and one held by a few others is that Identifying professional money through volume in the Aussi market is similar to watching pigs fly.
> Other than say the top 50 ASX US and European markets Futures and Forex even attempting to identify Professional money is a joke.
> 
> Does it matter that you cant identify "Professional" Money clearly in the ASX----NO.




Watching tick trades and the associated volume, it is interesting to note what some of the larger parcels are doing. Can one assume that larger parcels are placed with more expertise?

For example with GRR just now, there is a parcel of 85K gone through at $0.61 - that at least shows some confidence (in their mind) that this level will hold.


----------



## tech/a

roland said:


> Watching tick trades and the associated volume, it is interesting to note what some of the larger parcels are doing. Can one assume that larger parcels are placed with more expertise?




From the view that they know what THEIR plan is quite possibly.
To assume that THEIR plan is the same as yours and that you can ride on the back of single placements is dangerous. Looking longer term than a few minutes we must see how the instrument reacts to volume and just as importantly where there is extremely low volume AFTER extremely high volume.He lies a key to the future.

Im trading GRR so will place up some comments shortly.
When I see something on the chart worth mentioning relative to your observation.

If your T/H you look for volume and ride it---not that easy and only a few are expert at it.(Seconds or minutes max).
Not for me---its way to intense for me.


----------



## Trembling Hand

roland said:


> Can one assume that larger parcels are placed with more expertise?.




NO!!

If the magician shows you his hand then his not a very good magician is he.



tech/a said:


> If your T/H you look for volume and ride it---not that easy and only a few are expert at it.(Seconds or minutes max).
> Not for me---its way to intense for me.



Tech I wish I didn't have to have this conversation every time. I do not chase big volume. 

I FADE IT


mostly


----------



## roland

roland said:


> Watching tick trades and the associated volume, it is interesting to note what some of the larger parcels are doing. Can one assume that larger parcels are placed with more expertise?
> 
> For example with GRR just now, there is a parcel of 85K gone through at $0.61 - that at least shows some confidence (in their mind) that this level will hold.




The chart looks to be telling me that some big dude dumped the stock to lock in profits on a down down day, lots of little potatoes got scared and followed, another big dude - maybe even the same big dude came along and said that's a good price and snapped them up.

Now the potatoes are getting back in.


----------



## Frank D

Sorry I had to Butt in again

*GRR.....*

Breakout of the 3month cycle in January has completed the move into April’s highs.

IMO this puts the stock at ‘risk’ during this cycle:- break & extend pattern complete.

Ideal pattern for the next trend UPWARDS would be to see the stock come back down into .39-49cents….

Stabilizes around the 50% level during April

And then continues higher from MAY using the MAY monthly 50% level back towards higher highs in the 3rd Quarter.

That’s how I would treat the stock at this point, and that's only a 
Technical opinion as I have no idea about the fundamentals of the stock.


----------



## roland

Now this may seem to be a lame comment, but what is the point of the action with GRR and many other stocks that dip and recover on down days?

Is it really a shake out of weak holders?

Seems like a lot of trading for no purpose.


----------



## roland

Frank D said:


> Sorry I had to Butt in again
> 
> *GRR.....*
> 
> Breakout of the 3month cycle in January has completed the move into April’s highs.
> 
> IMO this puts the stock at ‘risk’ during this cycle:- break & extend pattern complete.
> 
> Ideal pattern for the next trend UPWARDS would be to see the stock come back down into .39-49cents….
> 
> Stabilizes around the 50% level during April
> 
> And then continues higher from MAY using the MAY monthly 50% level back towards higher highs in the 3rd Quarter.
> 
> That’s how I would treat the stock at this point, and that's only a
> Technical opinion as I have no idea about the fundamentals of the stock.




Thanks for the input Frank, I'm up 60% with GRR but have been starting to feel like I should be taking profits.


----------



## Boggo

roland said:


> Thanks for the input Frank, I'm up 60% with GRR but have been starting to feel like I should be taking profits.





And that may be the answer to Roland's question above.


----------



## roland

Boggo said:


> And that may be the answer to Roland's question above.




No answers needed, no point studying volume on stocks that you have no interest in.


----------



## roland

HDF's volume today so far is higher than an average combined month!

Disclosure for boggo: I hold this stock


----------



## roland

Looking at HDF's chart, it seems that the volume spikes don't seem to affect the SP as much as most others. I guess being a Stapled Infrastructure Security it tends to be more stable. Although the alltime record volume today has lifted it 7%


----------



## Wysiwyg

roland said:


> HDF's volume today so far is higher than an average combined month!
> 
> Disclosure for boggo: I hold this stock




How often are these news spikes the end of a swing? Buying on an announcement is extremely high risk because the majority of the time  price will drop back next bar or soon after. Buying on news is a phenomenon I have been drawn into several times. Stupid in hindsight.


----------



## roland

Actually, taking out APA's trade - the volume is pretty average


----------



## tech/a

Anyone watching ICN.
Saw the spike at 52c and out now waiting for Supply to dry up (If it dries up) before taking another position.
10 min chart is interesting


----------



## roland

tech/a said:


> Anyone watching ICN.
> Saw the spike at 52c and out now waiting for Supply to dry up (If it dries up) before taking another position.
> 10 min chart is interesting




looks like the horse has already bolted to me


----------



## Wysiwyg

Re: ICN

One of the contributors to trading failure is this phenomenon. The *desperation* to make a quid from a volatile price move invariably leaves several learners holding the hot potato. This mob at the top straight into on an instant large loss or stopped out near after.


----------



## roland

Wysiwyg said:


> Re: ICN
> 
> One of the contributors to trading failure is this phenomenon. The *desperation* to make a quid from a volatile price move invariably leaves several learners holding the hot potato. This mob at the top straight into on an instant large loss or stopped out near after.




Makes for a good resistance level


----------



## roland

MAH's rumour volume has spilled over to today. Interesting to note that MAH denied any rumour of contracts and yet the volume has persisted and the SP has held.


----------



## Boggo

Keeping an eye on NBS at the moment, some continous buying in 6681 lots, volume up today.

Would be interested in your VSA view tech/a

(click to expand)


----------



## tech/a

roland said:


> looks like the horse has already bolted to me




Sorry I have held this since 26c
Been trading it live on "That other Forum".
On the VSA Elliot Thread there.


----------



## Boggo

roland said:


> MAH's rumour volume has spilled over to today. Interesting to note that MAH denied any rumour of contracts and yet the volume has persisted and the SP has held.




Also being traded on "That other forum" on the EW Scans thread, in at 0.73.


----------



## roland

Boggo said:


> Also being traded on "That other forum" on the EW Scans thread, in at 0.73.




Not sure what "The Other Forum" is but feel I am missing something.

I was in at .74 and pulled my pants a little early at .80


----------



## roland

Boggo said:


> Keeping an eye on NBS at the moment, some continous buying in 6681 lots, volume up today.
> 
> Would be interested in your VSA view tech/a
> 
> (click to expand)




are we looking to see a selling climax spike, or is the long consolidation enough to hold the bottom? There were some nice selling climax spikes earlier in the chart


----------



## roland

Let's see if I can read the volume correctly with AWE

Re last 3 bars:

1st bar, wide spread on good volume finishing strongly - has all the small potatoes buying - Distribution?

2nd bar, wide spread on good volume, opens higher than previous day, but closes lower - Buying Climax?

3rd bar, wide spread, good volume, opens weak, a quick up test and then a stock dump.

4th bar (hypothetical), wide spread, flat open, good volume, more selling - close just below $2.70


Onward: - slow trickle down to to find support at $2.60. Will consolidate at $2.60 on narrow spreads and low volume (absorption phase). A quick blip downwards to ferret out the stop losses and weak holders before an improving Oil price assists with getting us back above $2.90


----------



## tech/a

> Would be interested in your VSA view tech/a




NBS view.

CLICK to expand.


----------



## tech/a

AWE 
View.

CLICK to expand


----------



## tech/a

My update on GRR which I'm trading.

Click to expand.


----------



## $20shoes

Some charts for consideration

First is PLV. Not enough liquidity for some, but it is on alert for me. 

Has been sideways for some time, but volume seems to enter as it drifts down to the 41c mark. The last few trading days suggest a renewed interest and the week before showed little supply. My concern is why is the volume so high today when the supply should have dissipated? that is, after a ranging period one would hope that an up day ( that wasn't overly wide) would not need such a forceful amount of volume to shift it. How do you read today's bar?



Second is concerning a gap up in EWC. If you are not on the right side of these trades before the thrust, the less risky play says be patient and see if the supply drys up and possibly wait for signs of demand. This one looks like the supply is dissipating. I would be looking for a test of 46c on small volume.


----------



## tech/a

My take.


> How do you read today's bar?




Ill tell you tommorow---seriously!

EWC
Gaps generally lock buyers into their trades below the gap.
This has all of them holding positions and not adding to supply
The bar which gaps and 50% of the gap itself generally creates a trade zone in which trading is enveloped until supply is either exhausted or halts.
Those participating are generally the weak hands or those who take profit from below the gap.
Id be waiting for volume to dry up which it is and take note of tests

31/3 supported by strong buying
7/4 Lack of buyers evident so still in limbo.


----------



## roland

OZL is interesting.

Sellers decided that $1.25 was enough.

High volume, low spread, weak close. Not really a selling climax ?

Last bar looks like we want to hold this level. Average volume, low spread, high close after a low test.

Is $1.20 our new support?


----------



## LKR

Hi everyone,

I am a big fan of VSA, there is defeninetely an art to it though.

From my studies, i have found that analysing charts on lesser time frames will often reveal hidden buying or selling.

Looking at volume bars on dailys can sometimes mirepresent what is actually occuring. Often i will zoom to 5 min charts or less just to check where the demand is kicking in, and at what level supply comes in, and the volume relative.

Also, volume on price levels can often help to represent where weakness lies. Ultimately this is the key, where is the weakness and where is the strenght?


----------



## LKR

tech/a said:


> NBS view.
> 
> CLICK to expand.




P.S i agree with your view.

IMO a strong base is forming, and finally after a long time of following this stock, some strong demand is comming through, finally some support.

Though as tech said it could be months before anything of great importance happens, there has been alot of supply to dry up, alot of locked in sellers.

Also of interest, this stock when it was known as ETC, had previously formed a strong base for many many months, and showed all the charateristics of following through, but failed. I held when it was 38 cents, went to 50 and got stopped out on its way back down. Im happy to hold again now though.


----------



## Boggo

This is another (IFE) that has had a good run but is now running into resistance. Last couple of days showing a positive effort IMO.

(click to expand)


----------



## Frank D

*NBS*

Ideally a Friday close above 17.5 cents today can help verify further
 gains...

Weekly close above April 50% level and breakout of the March 
highs....


----------



## Boggo

Thanks Frank.
It seems to be making an effort today so far.


----------



## WaveSurfer

I managed to get a hold of a few disks of trading tools for a reasonable price. It has a copy of TG real-time v3. The guy whom I bought it off transferred his license over to me so I'm currently going through the bootcamp on the TG website. Very interesting stuff indeed.

I'm not using TG with real-time data as of yet, just an EOD feed.

Going through a few charts I came across this one (AXM). I am trying to figure out if it's in an accumulation stage. It seems there was a bit of climatic action back in Sept 2009 and has gone sideways ever since. I'm not too sure what to interpret with the big spikes of volume in Nov 2009 and March this year on each move up. I'm not that convinced it's SM selling into the rallies considering it's only ranging between 2 and 6 cents, lol. But what would I know anyway.

The monthly is a little more interesting with the increase in volume at this level which makes me think the herd is bailing out and the Pro's are buying (very narrow spread bars).

What's your opinion on this one tech? I'm not going to trade it, just spending some time in the charts to identify accumulation/distribution.

First chart is the daily, second is the monthly.


----------



## tech/a

Id call this DYING.

Ill go through some Accumulation /Distribution charts when I have some time to present them
First hint I can give (as you need to identify this when its happening no good in hindsite) Is look for high volume and then work out what its doing.
in the chart above its clearly selling. Do accumulation here--- no distribution either---If you pull up a weekly chart you can see clear distribution in 07/08 at the top. Customary failed double top re test.

Then look right of chart to volume and notice the MASSIVE increase in selling from May 09 till now.
This(AXM) is being DUMPED!


----------



## Trembling Hand

WaveSurfer said:


> The monthly is a little more interesting with the increase in volume at this level which makes me think the herd is bailing out and the Pro's are buying (very narrow spread bars).




WaveSurfer you also have to apply a bit of common sense to a stock that has traded from $1.20 down to $0.02.

The volume is always going to show an increase. $1000 worth @ $1 is 1000 shares. $1000 @ $0.02 is 50,000 shares. Its not comparable. Different people now playing a completely different game.


----------



## roland

I haven't been able to quickly find a good example of accumulation, but here is one of the examples from Masters of the Market:
*
Point (a)*
We have a wide spread down on high volume, which is normally an indication of weakness (selling pressure). 

However, over the next few days the market has not fallen – in fact it is up. If the high volume seen at point (a) had been selling, how can the market drift upwards?

To be more accurate, there was selling at point (a), but for the market to have gone up, the selling must have been 'absorbed' by professional traders. 

They will only do this if they have become bullish. In this particular chart, we see the beginnings of an accumulation phase.

*Point (b)*
We observe an up-bar, but look at the volume: It is low. The market is unlikely to go up on low volume (no demand), which is why the market now moves sideways.

Low volume shows that either:
1. There is a shortage of stock at this price level due to the absorption volume seen at point (a),
OR
2. The professionals who are accumulating stock have withdrawn from the market, as they do not want higher prices – it is too early for them, as the floating supply has not been removed.

You have come to these logical conclusions because of point (a), which had to be absorption of the supply, by professional traders (an indication of strength).

*Points (c) & (d)*
Are small tests. Note the low volume at these points, which is an indication that the tests were successful and that supply has been removed. 

The market cannot go down on low volume. Taken in isolation the actions at (c) & (d) mean little, but because you have seen absorption volume in the background, they now become strong buy signals.

Once you have seen very high volume on a down-day (or bar) on your chart, this shows high activity in the market. 

If a rally starts due to the market-makers buying (or absorbing) the selling from weak holders who are being shaken-out on the lows, the market will frequently re-test this high volume absorption area, bringing the market back down into the reversal area (where the high volume was first seen) to make sure that all the selling has, in fact, disappeared. 

You will know immediately if all the serious selling has disappeared because the volume will be low as it penetrates back into the old high volume price area. You would be wise to pay attention to this observation because it represents an excellent buy signal. 

In summary, to mark a market down challenges the bears to come out into the open. 

The low volume of activity shows that there is little selling left from the bearish side of the market. 

There is now an imbalance between supply and demand caused by the recent shake-out (at point (a)). If there is little or no supply left in the market, this clearly shows that the trading syndicates and market-makers have been successful in their attempt to absorb selling from the weak holders, and that prices are now set to rise.


----------



## roland

Looks like Apex still has plenty of holders at this level wanting to sell. Small tests down are still giving us heaps of volume.


----------



## roland

OZL may be a reasonable example.

Point A, wide spread down with plenty of volume - indicates supply at this level. A couple of tests down after point A still brings in plenty of volume. Not ready yet!

Point B, same test but nearly no volume. Down test at Point C again shows no volume. No bearish supply left at these levels.

After Point C we have the SP drifting higher on low volume.

Then we get back to the resistance level at $1.25


----------



## tech/a

> Small tests down are still giving us heaps of volume.




Other way around

Small tests UP are still giving plenty of volume.
Takes a while to get your head around it!

Here is a good example of what apperas to be one thing is in fact the complete opposite.
Go check out the chart for the remainder of the story.


----------



## WaveSurfer

WaveSurfer said:


> .....I'm not too sure what to interpret with the big spikes of volume in Nov 2009 and March this year on each move up....




Cool, thanks guys/girls. Dumping of the stock certainly makes sense in regards to my observation above.

A quick search on the company returned this. 

Yeah TH, I understand. Thanks mate. Although.... 10,000 shares for a couple hundred.





LOL


----------



## tech/a

Thought Id delve a little deeper into how I use volume and in particular answer this question posed by "Client" on his thread.



> OK, let it be zones. So why do you think that those zones are much better then my lines or some other stuff? The price can break those zones and then unexpectedly turn back.. As well as in my cases. And?..




I use support and resistance zones something I have developed over 15 yrs.
These zones are made up of different criteria.

But there is one criteria I find excellent as a Support or resistance ZONE and that's extreme volume. I look for extreme volume and then decipher what it is telling me. If its telling me its buying then we see---support and of course selling --resistance.

To ascertain this we need to look at the bar/s prior to the Extreme volume bar and immediately after the bar this will determine the true meaning of the EXTREME volume and its likely affect on the coming trading.

Below is a random Chart from Tonight's scan.
Ive just looked back and found extreme volume and drawn in the zones.
I think you'll agree they are pretty useful particularly when you see a batch of them either at a base (In this case) or REVERSE at a top.

CLICK TO EXPAND

RED Resistance BLUE Support


----------



## tech/a

And here is the current chart from the Scan.

Care to attempt to interpret this chart?
(mind you to be sure youd need to wait a day or so but what do you think Im seeing?)

Its not one I'll have on the long watchlist.

CLICK TO EXPAND.


----------



## tech/a

Or how about this chart?


HGO 
Click to expand.

These examples are of course only one (Different) way to use volume---Ive not seen it in any book including VSA.


----------



## roland

suspect that the last resistance level has not been reached yet


----------



## $20shoes

IMHO, I'd be trading HGO on the next bar.  Not the best one from a stop perspective but sometimes you have to follow the volatility and jump in when the market is buying. 

The test was stepping over the 36-40c range, and taking note of the ensuing participation. It is clear the buyers are moving in. To me it is too early to say whether there is hidden selling. If there were, the market wouldn't have likely gapped over the range and elicited such buying support. 

In your other chart, what looked like a promising move has stagnated into a series of failed "up" tests. The volume on the last day fails to push up to new highs. That said, it is not yet breaking down. However, the overall feeling to me is that moves higher elicit some supply which could make for a choppy trade ( perhaps one worth avoiding?)


----------



## Trembling Hand

HGO. Very strong day but I wouldn't be trading it tomorrow morning no matter what. Not with my money. :

Nowhere there to put a logical stop IMO.

Missed the boat on that move waiting for a entry/better setup.


----------



## tech/a

Roland

You still havent grasped the concept of VOLUME support and resitance.
Youve maket your chart with conventional support and resistance pivot levels.


----------



## roland

tech/a said:


> Roland
> 
> You still havent grasped the concept of VOLUME support and resitance.
> Youve maket your chart with conventional support and resistance pivot levels.




mmmmm, trying a bit harder here:


----------



## tech/a

Its pretty simple.
Where a bar or Bars show Extreme volume Buyers see this as Support 
OR Sellers see it as Resistance.
Depending on wether the Volume is identified as Supply or Buying.
Extend forward the zone (The range of the bar) and there is your ZONE.


----------



## Frank D

*HGO:-* 

Breakout pattern:- Target 56 cents during 2nd Quarter.

Breakout of April high:- extension into MAY high:- exact target unknown 
until April 'closes' & May levels are defined

which means it can continue to trend into higher highs and move beyond 56 cents...

Or it can move in an odrely pattern:- stall @ April's highs @ 50 cents 
and then continue towards 56 cents in MAY


----------



## tech/a

Frank 
Thanks for your analysis.
It could well turn out to be correct.
Current Volume analysis is showing (and this morning proving to be correct)
Supply into the market at the level shown on the volume resistance chart.


----------



## Boggo

This (ALY) is another IADSI highlighted candidate that may have potential.

Last couple of attempts failed but the next bar in each case would have kept you out anyway.

(click to expand)


----------



## Frank D

*ALY:- *

Same pattern as first Quarter but no follow through on the Upside then.

Minor breakout of the 3-week highs @ .72 cents

Same pattern would need to see a breakout and monthly close above .86 cents and then
 continue higher from the MAY 50% level.

2nd Quarter target 1.39

*Support .72 cents*


----------



## WaveSurfer

LKR said:


> ....Looking at volume bars on dailys can sometimes mirepresent what is actually occuring. Often i will zoom to 5 min charts or less just to check where the demand is kicking in, and at what level supply comes in, and the volume relative....




I missed your post over the weekend. Nice one mate.

Is this what you're sort of getting at? 

I was looking at a wide spread high vol up bar on the daily. Zoomed to the 5 minute to find the bulk of that volume kicked in at the lower end of that bar, suggesting it was mostly buying and not hidden selling?

Makes perfect sense if I'm on the right track.


----------



## WaveSurfer

tech/a said:


> Its pretty simple.
> Where a bar or Bars show Extreme volume Buyers see this as Support
> OR Sellers see it as Resistance.
> Depending on wether the Volume is identified as Supply or Buying.
> Extend forward the zone (The range of the bar) and there is your ZONE.




Do you use the entire range of the bar (high to low) as the "zone"?

And would this be similar to volume profile in a sense?


----------



## Boggo

Frank D said:


> *ALY:- *
> 
> Same pattern as first Quarter but no follow through on the Upside then.
> 
> Minor breakout of the 3-week highs @ .72 cents
> 
> Same pattern would need to see a breakout and monthly close above .86 cents and then
> continue higher from the MAY 50% level.
> 
> 2nd Quarter target 1.39
> 
> *Support .72 cents*




Thanks Frank
Some of these tend to tease for a while and then go, just got to be ready to hit them when they move. AZM was an example in mid March and recently IFE was an example of this behaviour, IFE may now starting to show some life.

Cheers


----------



## tech/a

WaveSurfer said:


> I missed your post over the weekend. Nice one mate.
> 
> Is this what you're sort of getting at?
> 
> I was looking at a wide spread high vol up bar on the daily. Zoomed to the 5 minute to find the bulk of that volume kicked in at the lower end of that bar, suggesting it was mostly buying and not hidden selling?
> 
> Makes perfect sense if I'm on the right track.




Yes but your ahead of whats been presented here.
Having said that the more volume IE an entire day or entire week if its still way above average---has more weight than a 5 min bar as far as Volume Support and or resistance goes---well thats what I've Found.



WaveSurfer said:


> Do you use the entire range of the bar (high to low) as the "zone"?
> 
> And would this be similar to volume profile in a sense?




Yes
And 
Yes.


----------



## tech/a

Trembling Hand said:


> NO!!
> 
> If the magician shows you his hand then his not a very good magician is he.
> 
> Tech I wish I didn't have to have this conversation every time. I do not chase big volume.
> 
> I FADE IT
> 
> 
> mostly




Sorry T/H just saw this. Apologies.
GRR is behaving nicely.
Frank whats your view further on from your original analysis.


----------



## Frank D

*GRR*

completed the 2nd Quarter high @ 73cents.

Whilst above this there is no reason to cover longs, and you would focus 
on the next highs in MAY:- unknown at this stage.

Support:- 48 cents.

If Weekly timeframe closes below 73 cents and starts trading below 
66 cents, I would personally wait until price retests support.


----------



## roland

HGG has just pushed through what I have surmised is the supply area. 

I am of the understanding that a rise on low volume is a sign of weakness.

My first blue area showing a rise on high volume is much more healthy. 

The supply test gave us some pretty good selling volume that brought about some weakness and had us going sideways for a month.

Since we don't have decent volume on the latest push up, does that indicate a roll over is imminent?


----------



## tech/a

There has been a lot of VOLUME Analysis given here so I thought Id look back and see how it went relative to then---the comments--and now.
*
Not* to beat chests but to make a point that learning how to chart read with volume is a very worth while and can be profitable skill.(There are other ways to read charts) Franks for instance.

HGO
GRR (I now expect a pause (inside day) and have tightened stop.)
NBS
AWE
EWC
All as analysed pretty spot on.

LYC as analysed and still cooking.

Imagine what happens when you combine them with sound Money Management and Trade Management!


----------



## Trembling Hand

roland said:


> HGG
> 
> Since we don't have decent volume on the latest push up, does that indicate a roll over is imminent?




Roland, two Parts to moves and volume to my thinking you are looking in the wrong direction.

_First part_ the move. Prices have risen due to people willing to pay higher and higher prices - Good

_Second part _That move has had less and less volume. That, IMO, is good in this context. Although prices have risen, less are willing to take advantage of that and sell - therefore requiring buyers to pay higher prices - good. (see part 1)

With that said If I was holding I would continue to hold with tight trailing stop BUT because of the highs that turned it around back in Sep - Oct 09 @ $2.50 -60 I wouldn't chase this at these levels.


Tech?


----------



## tech/a

roland said:


> HGG has just pushed through what I have surmised is the supply area.
> 
> I am of the understanding that a rise on low volume is a sign of weakness.
> 
> My first blue area showing a rise on high volume is much more healthy.
> 
> The supply test gave us some pretty good selling volume that brought about some weakness and had us going sideways for a month.
> 
> Since we don't have decent volume on the latest push up, does that indicate a roll over is imminent?




Roland

Your chart notations are getting much better.
I'm not going to analyse this chart just yet.
The area you have noted as "Supply Area" is in fact a consolidation Zone

Have a go at working bar by bar through the zone and mark on it what  the bars in it are telling you.
In particular
March 17/22/26/29/30
April 7/9/12/13/14


----------



## roland

tech/a said:


> Roland
> 
> Your chart notations are getting much better.
> I'm not going to analyse this chart just yet.
> The area you have noted as "Supply Area" is in fact a consolidation Zone
> 
> Have a go at working bar by bar through the zone and mark on it what  the bars in it are telling you.
> In particular
> March 17/22/26/29/30
> April 7/9/12/13/14




Here goes:

A. Very high volume, large spread. Breaks $2.40 resistance and pulls back to close on the resistance line. We have a lot of sellers coming in to pull profits from the rise up from the high volume day on the 3/3/2010 seeing the resistance line of $2.40 as a target. The bounce over the $2.40 mark are the small potatoes wanting to get in on the action. These guys are now trapped and will either hold or sell at anything above $2.40 - hence the sideways movement that follows.

B. Lower open with a probe down on diminished volume. Most are locked in above $2.40 with the sellers having already sold.

C. Low open caused by panick sellers and possibly clearing out some stop losses. Confident buyers happy to pick up stock below the resistance.

D. Extreme low volume day, no supply, no demand - everyone just hanging around to see what's going to happen.

E. A probe above the $2.40 has the sellers back that got stuck at point A

F. Higher open, volume up from previous day. Probe above $2.40 clears out more of the weak holders that bought above $2.40. Maybe a 3rd probe above $2.40 have some buying expecting a breakout.

G. Probe up through the $2.40 and down gives no volume. Weak holders gone

H. Rises above the resistance of $2.40 with low volume, sellers gone, first close above $2.40

I. High open has the profit takers coming in. Starting to lock in buyers above the $2.40 mark which caps the selling to above $2.40

J. Low volume up move - no supply. Sellers have dried up. Resistance well breached. Next resistance levl of $2.50 on everyone's mind.


----------



## tech/a

T/H has it in simplistic form.
Will comment on the bars when I have some more time.


----------



## tech/a

Exited GRR on Trailing stop.

Strong supply entered at 78.5c has been no demand since.(60 min chart)


----------



## WaveSurfer

tech/a said:


> Yes but your ahead of whats been presented here.
> Having said that the more volume IE an entire day or entire week if its still way above average---has more weight than a 5 min bar as far as Volume Support and or resistance goes---well thats what I've Found.
> 
> 
> 
> Yes
> And
> Yes.




Thanks tech. I understand and agree with what you're saying about the higher time frames being more significant for the volume S/R. I thought it was a good point from LKR to use that "honing" method for general volume interpretation.

Keep posting away, I'm learning a lot


----------



## tech/a

Frank D said:


> *GRR*
> 
> completed the 2nd Quarter high @ 73cents.
> 
> Whilst above this there is no reason to cover longs, and you would focus
> on the next highs in MAY:- unknown at this stage.
> 
> Support:- 48 cents.
> 
> If Weekly timeframe closes below 73 cents and starts trading below
> 66 cents, I would personally wait until price retests support.






tech/a said:


> Exited GRR on Trailing stop.
> 
> Strong supply entered at 78.5c has been no demand since.(60 min chart)




Interesting I exited due to lack of support at 75.5c
So far with the pivot reversal now in for today this has played into Franks senerio ---  so far.


----------



## tech/a

HGG 
My take on your comments.

Here goes:

A. Very high volume, large spread. Breaks $2.40 resistance and pulls back to close on the resistance line. We have a lot of sellers coming in to pull profits from the rise up from the high volume day on the 3/3/2010 seeing the resistance line of $2.40 as a target. The bounce over the $2.40 mark are the small potatoes wanting to get in on the action. These guys are now trapped and will either hold or sell at anything above $2.40 - hence the sideways movement that follows.

*Supply swamps demand (we dont know its going to go sideways---YET)*

B. Lower open with a probe down on diminished volume. Most are locked in above $2.40 with the sellers having already sold.

*No supply.
Next bar confirms.*

C. Low open caused by panick sellers and possibly clearing out some stop losses. Confident buyers happy to pick up stock below the resistance.

*Test.*

D. Extreme low volume day, no supply, no demand - everyone just hanging around to see what's going to happen.

*No demand---we know its no demand as this bar is higher than the previous bar.*

E. A probe above the $2.40 has the sellers back that got stuck at point A

*Test*

*So now we have a high and low test in this consolidation. Trading below is bearish above bullish.*

F. Higher open, volume up from previous day. Probe above $2.40 clears out more of the weak holders that bought above $2.40. Maybe a 3rd probe above $2.40 have some buying expecting a breakout.


G. Probe up through the $2.40 and down gives no volume. Weak holders gone
*Test again --actually the 1st and 6th are also tests with support to the low side. No hint that sellers have yet gone or dried up.*


H. Rises above the resistance of $2.40 with low volume, sellers gone, first close above $2.40

*Breakout on low volume no supply left*

I. High open has the profit takers coming in. Starting to lock in buyers above the $2.40 mark which caps the selling to above $2.40

*Sellers coming in*


J. Low volume up move - no supply. Sellers have dried up. Resistance well breached. Next resistance levl of $2.50 on everyone's mind.

*Low volume Up day confirming breakout.*

*Today
Supply coming in --- Break away gap.
60 min chart is helpful here to see what actually is happening inside this bar.*

So what do you think this is telling us about todays bar?


----------



## roland

tech/a said:


> HGG
> So what do you think this is telling us about todays bar?




Well, it looks like there was some heavy buying temporarily soaking up supply - then the supply kept coming back.


----------



## tech/a

roland said:


> Well, it looks like there was some heavy buying temporarily soaking up supply - then the supply kept coming back.




Do you think $2.55 may have some significance?


----------



## roland

tech/a said:


> Do you think $2.55 may have some significance?




Resistance on 21/10/2009 was around this level and it bounced off $2.50 on 18/11/2009, so that would be significant. 12 month high is $2.67, so each of these levels would have locked in holders wanting to cash out. The $2.55 mark would give holders that bought at highs on the 18/11/2009 a small profit with their exit.


----------



## tech/a

Wow.
Pretty in depth there!

Simply yesterday we see strong support at $2.55.
A break here would be significant.

Just a hint with volume analysis in any periodicy minutes to a month---a single bar remains valid for 2-5 bars in which time the analysis will be proven as either true or false. So when we look at a bar its information is proven true or false within 5 bars beyond that other bars will have control.


----------



## ThingyMajiggy

Just a question for all you hardcore volumers, have you noticed any signs/hints that an up move will end, it seems(for me, anyway) that it is a lot easier to see when support comes in rather than when its going to sell off, like I have attached, chart of Gold the other night, see how its pretty obvious when support was coming in, yet when it tried going up, volume would just die out, then big push down again- big volume comes back in, bounces it back up, but there doesn't seem to be any real obvious signs in the other direction, theres nothing that stands out(other than the fact of drying up volume on the up moves) that the up move will end, like it does with the down moves. I thought could that big volume still be in the move, Gold did have a reasonable rally after this, back up to about 1154-56. 

Its just something I thought I would run by you guys in here, sometimes it does do the same as the down movements, big volume will come in and it will fade but it just seems far less obvious and less common on the ups than the downs. 

Because of this, I find it harder to determine exits when going long compared to when going short. 

Also to those that fade volume, how does that work on break-outs, say there was strong resistance @ $5.00(just for this idea). It had been drifting up there, then it bursts above on huge volume into new ground, but didn't close on its highs, how would you handle this? Still fade it? or see it as strength because of the break-out?


----------



## tech/a

Sam

Good questions I have sometime to answer.
I don't have futures from esignal but will get it re launched (I must get into Forex!) But I'll re label your chart and ask you to then have a look at a session with the info I give you and report back with what you found.

Firstly there are 2 volume tags I look for.
(1) Extreme Volume > 4 x 10 period volume the > the better!
(2) Extremely low volume < .25 x 10 period volume the < the better!

These tags are the flashing lights on a chart that warn ---- Take action---soon.
All other bars combined with volume tell paragraghps of the story un folding--they arent the HEADLINES!

So lets move to your gold chart. All in hindsite and hopefully youll report on R/T next session.
The story is told in ANY timeframe.

Ok Now to CONTEXT.
Where the story has been headlined by the 2 Tags.
Firstly we look FIRST for EHV (Extreme High Volume bars) then we look for ELV Tags.

We know that Markets hate extremely high volume---it pulls the instrument out of equilibrium and will attempt to return to equilibrium before defining value at THAT point.
Remember VSA is only valid on a bar or group of bars for 2-5 more periods
after that time other bars show the way.
However EHV bars are control bars and act as volume Support or Resistance.
(Areas where price will come back to or acts as resistance going forward)

Sams chart look a bit of a mess after Ive noted everything on it but if you take your time to read all the bits I'm sure it will make sense. Let me know how you go Sam next session ---wether it was easier to read. try a 2-15 min time frame--more info. 3 min seems to be the VSA Futures guys.

There are TEST bars which are very important but due to the chart looking so over run I havent marked them on this one.
We look for tests after lows and highs are made to see if they succeed or fail.
Ill explain more if people want to go through them.

CLICK TO ENLARGE


----------



## ThingyMajiggy

tech/a said:


> Sam
> 
> Good questions I have sometime to answer.
> I don't have futures from esignal but will get it re launched (I must get into Forex!) But I'll re label your chart and ask you to then have a look at a session with the info I give you and report back with what you found.
> 
> Firstly there are 2 volume tags I look for.
> (1) Extreme Volume > 4 x 10 period volume the > the better!
> (2) Extremely low volume < .25 x 10 period volume the < the better!
> 
> These tags are the flashing lights on a chart that warn ---- Take action---soon.
> All other bars combined with volume tell paragraghps of the story un folding--they arent the HEADLINES!
> 
> So lets move to your gold chart. All in hindsite and hopefully youll report on R/T next session.
> The story is told in ANY timeframe.
> 
> Ok Now to CONTEXT.
> Where the story has been headlined by the 2 Tags.
> Firstly we look FIRST for EHV (Extreme High Volume bars) then we look for ELV Tags.
> 
> We know that Markets hate extremely high volume---it pulls the instrument out of equilibrium and will attempt to return to equilibrium before defining value at THAT point.
> Remember VSA is only valid on a bar or group of bars for 2-5 more periods
> after that time other bars show the way.
> However EHV bars are control bars and act as volume Support or Resistance.
> (Areas where price will come back to or acts as resistance going forward)
> 
> Sams chart look a bit of a mess after Ive noted everything on it but if you take your time to read all the bits I'm sure it will make sense. Let me know how you go Sam next session ---wether it was easier to read. try a 2-15 min time frame--more info. 3 min seems to be the VSA Futures guys.
> 
> There are TEST bars which are very important but due to the chart looking so over run I havent marked them on this one.
> We look for tests after lows and highs are made to see if they succeed or fail.
> Ill explain more if people want to go through them.
> 
> CLICK TO ENLARGE




Thanks for that tech  

Not sure I understand what you mean with the: 



tech/a said:


> Firstly there are 2 volume tags I look for.
> (1) Extreme Volume > 4 x 10 period volume the > the better!
> (2) Extremely low volume < .25 x 10 period volume the < the better!




Is this the calculation you use in your program or something? 

Also, why would you recommend a larger timeframe chart? I prefer the 1 minute as it shows more detail, I have attached a 1 minute and 2 minute chart of Oil on Friday night, I think the 1 minute shows better entries, more "ELV" bars giving off more indication of future direction? 

Could you do your analysis on these charts? I haven't put anything on them, blank canvas for you  My VSA has gone a bit rusty but I still keep an eye on volume as I said earlier in this thread I think, mainly the extremes, extremely high or low volume as you do tech, otherwise I don't take much notice of it, but I think a good entry long would be the ELV candle just after the "00:47" area and also the ELV after the "1:10" area, those 2 up candles. But back to my original question about determining an exit from longs, as its not as obvious when an up move will end compared to when a down move will end, it is a little more obvious on these charts, around that 1:10 area on the 1m chart, reasonable volume came in on that wide range up candle, then you got the no demand up candles just after it, that is a nice entry short IMO, would you agree tech/others? 

But that is probably the only obvious entry short or exit long by rising volume on an up move, earlier, where that huge volume spike is(referring to the 1m through all this), it had that nice little bounce up, then there wasn't any real noticeable sign that that move was going to end, that last up bar(00:29 area I'm talking) had less volume, then the low volume down bar, doesn't seem weak to me, yet it come off pretty hard, plus...average volume on an up move is quite a good thing I hear? 

The only sign that it was going to come off I think is the fact that the low(er) volume down bar following that last up bar was a test bar, that failed(following bar closed lower)? 

Then as you can see it came off hard again, then once again the high volume came back in and support was found and the process starts again


----------



## tech/a

Sam I have completed analysis on the 1 min chart

Could I have a 5 min please
Private mail it if you wish.


----------



## Trembling Hand

tech/a said:


> Could I have a 5 min please
> Private mail it if you wish.




Here are two. Because Crude is 24 hrs with a cash or day period were 90% of the volume is done I've include two charts to better compare volume. First one day session only, second a 24 hr.


----------



## tech/a

Thanks Sam and T/H.

I will use T/H's as it shows a little more of the chart than Sams (Sent Private mail).

Longer timeframes tend to give clearer signals where range and volume have more time to manifest.

However in this instance the 1 min chart has more info than the 5 min.
Each however would have picked up similar ticks.I'll sign up for Data tommorow and get involved in these.
Will take a while t get the "feel" of Crude/Gold Etc.


----------



## ThingyMajiggy

Alright here is one for discussion. 

Thoughts on ABY? 

I have highlighted the range of the high volume bars, that latest bar looks like a test? (remember- rusty on my VSA)

I have also attached the weekly.


----------



## tech/a

Sam

In my view this has some work to do.
Looks like distribution with wider range bars being characteristic of this.
If you scroll your weekly chart back to march last youll see the pattern below nice and tight.


----------



## ThingyMajiggy

So something like ABP is a better candidate then?


----------



## tech/a

Its one that Id have on the watchlist looking for something that says its awakening.
Have a look at the charts on the other thread


https://www.aussiestockforums.com/forums/showthread.php?t=19396


----------



## $20shoes

I have tried to map some volume zones onto BLY daily. Still trying to get the hang of this. 
I'm interpreting the large drop on 19/2 as supporting volume because the price action halts all of a sudden at this level and goes sideways. This coincidentally or not, happens to be in the same range as the 13/11/09 bar. Low volume test affected yesterday followed by a positive move today.


----------



## tech/a

Shoes.

Charts like this have massive resistance zones to battle through as you have marked.So any forward movement is going to be a slog.

I look for opportunities at extremes.
Long at the exhaustion end of a corrective move or short (If I traded short) at the end of a strong trend (usually clear).

Or in *smaller* consolidations (up to 10 bars) within trends.

Its quite likely there will be plentiful on going shot opportunities rather than long coming up.


----------



## $20shoes

tech/a said:


> Shoes.
> 
> Charts like this have massive resistance zones to battle through as you have marked.So any forward movement is going to be a slog.
> 
> I look for opportunities at extremes.
> Long at the exhaustion end of a corrective move or short (If I traded short) at the end of a strong trend (usually clear).
> 
> Or in *smaller* consolidations (up to 10 bars) within trends.
> 
> Its quite likely there will be plentiful on going shot opportunities rather than long coming up.




Thanks Tech. Appreciate the feedback. 
Shorts - certainly shaping up that way isn't it!!


----------



## tech/a

So after the ig BANG thought Id go back over a few charts and have a critique on how they went relative to the analysis which was done here.

Good time to have a look dont you think.
I went back to HGG chart.

This is how its been going from BLY backwards.
 to HGG

*BLY* Respecting the lowest zone in our ZONE resistance and support analysis.
*ABT* as expected in analysis
*ABY *Distribution as we expected.
*CRUDE* Crapped itself No demand as we pointed out.
*GOLD* Still long?
*HGG* $2.55 had significance
*HGO* Came off as expected.
*RSG* the only slight blemish not spot --- but the next 3 bars set the scene.


----------



## Kryzz

VSA opinions for the XJO anyone?


----------



## tech/a

Pretty obvious that the lack of volume is heralding a rally of questionable conviction.


----------



## Kryzz

tech/a said:


> Pretty obvious that the lack of volume is heralding a rally of questionable conviction.




Yeah, I gauged that much, was just seeing if there was anything more to it... guess not.


----------



## It's Snake Pliskin

Kryzz said:


> Yeah, I gauged that much, was just seeing if there was anything more to it... guess not.



It'll be interesting to see how the stopping volume has held up if the pullback comes quickly.


----------



## lenny

Hi Kryzz, What data provider do you use?

The reason i ask is that i use paritech data and it doesn't provide volume for the indexes.


Regards
Lenny


----------



## tech/a

Kryzz said:


> Yeah, I gauged that much, was just seeing if there was anything more to it... guess not.




There is a bit more but not on that specific day.
the analysis is an on going book with a new chapter each day.
We can clearly see the "history" analysis. no demand and no conviction and Friday proved this--the high of Thursday was clearly tested and price retreated from the old high of Thursday.

So far today the gains of the previous 4 sessions have been wiped out.
We are now going to test the low of 7/05/10

According to Elliott analysis we will see the low minor support level exceeded as price moves down toward 4100

The combination of the 2 anlaytics gives more likely alternatives as the price action takes place.
We can anticipate ahead. Which is what we did when suggesting short back 4 days ago.


----------



## The Edge

Sunday  16 May 2010

Shaunkris 89:

The sharply increased volume going into the lows, culminating with the peak volume at the low, the low a wide-range bar, [and it is difficult for me to see
exactly where the close was...it looks like it could be under the 4,500 level],
begins a compelling story.

The increased volume as low was made reflects a likely transfer of risk, from
weak to strong hands.  What we know about smart money is that it does not
sell lows or buy highs.  What we know about the public is that it is prone to
selling into lows, buying into highs.  That appears to be the process here.

Two considerations, for now.  The first is the speed with which the decline
occurred.  That is was so fast usually means a relatively weaker recovery. Actually, three considerations.  I just noticed the position of the last high
prior to this low.  The second consideration, now added, is the fact that
XJO, [do not know what that is, but a chart is a chart], has been in a broad trading range, and this last low has had to clear out a lot of stops under the previous November '09 and February '10 swing lows.

My guess is that the function of the low was to wash out all the stops under the market, get rid of any weak holders, and make XJO look unappealing, at least for now.

Note how the last high occurred on small range bars, symptomatic of a lack
of demand, and a lack of demand can lead to sellers coming in..which did occur.  Contrast that with the wider range bars at the lows, coupled with the increased volume.  I am digressing a bit, but it stems from the fact that the low and volume you question is better viewed when taken in context with the surrounding activity.

The third consideration is the quality of the rally off the low. As was already
pointed out, the volume diminished, not totally unexpected given the speed
with which the decline occurred.  We do learn a few things from it, however.
The position of the close at the low, on the highest volume since December,
suggests there were buyers, not only on that day, but the other high volume days preceding.  This goes back to putting your day in question in context to other market activity, for it is an evolving process, and in this portion of the chart, the more active transfer of risk.

This current rally should/will lead to a retest of the low, and it is the quality and character of HOW the retest develops that will provide the important clues for market direction.  If the low is retested on smaller range bars with  declining volume, this tells us that supply, [selling] has dried up.

If the retest shows wider ranges and increasing volume, the low may not hold.  Given HOW the low occurred, and where, it would appear the odds favor it holding.  All you need now is confirmation from watching the retest.

From my perspective, there is a lot moreto it than was initially surmised here.

Cheers!

Apologies for the lack of line consistency.  I am not familiar with how the lines end/begin for the next one.  Subtance over style, if there be any substance to be found.


----------



## Kryzz

lenny said:


> Hi Kryzz, What data provider do you use?
> 
> The reason i ask is that i use paritech data and it doesn't provide volume for the indexes.
> 
> 
> Regards
> Lenny




Lenny, the data is from norgate premium data: http://www.premiumdata.net/.

Cheers for replies The Edge and Tech/A.


----------



## tech/a

Edge.

Nice summary.

The XJO is the Index of the ASX 200
Interesting developements so far today.

The sell off has been so dramatic I favor a break of long term support.


----------



## The Edge

Sunday  16 May 2010

Thank you, Tech.  I had one more comment to add after signing off that pertained to the quality of the current rally.  With your added information that XJO is a stock index, it makes my added comment more relevant.

The current rally, lacking volume, is somewhat weak.  One important aspect about weak rallies is that they most always lead to lower prices.  Again, the speed of the decline is an important tell.  How price responds will comfirm its importance, and the read of developing market activity will support the primary market activity.  

Not mentioned, an error on my part, is acknowledging the trend, which is obviously down, at least on the daily chart shown.  THAT dictates one's overall strategy.

My main focus is the S&P, and that index trend as been confirmed down, and short positions were taken at 1158 with half covered on Friday at 1129, staying short the balance.  Good that I was unaware of XJO.  It might have made my analysis more aggressive, but from an existing bias.

FWIW, no stock index will remain unscathed.  The "too big to fail" epidemic, rash and an economically suicidal mentality is now spilling over countries that are deemed worth trying to save.  "Paper money will always reach its intensic value, which is zero," paraphrasing Voltaire.  It is fiat paper supporting all efforts to save companies, banks, now countries.  Oh, dear.  I lapsed into an editorial opinion.  

Cheers, all.


----------



## tech/a

> It is fiat paper supporting all efforts to save companies, banks, now countries.




https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

You may find this as interesting as I do.
Note World Debt V GDP.


----------



## ambika123

Thx for the info.I Will keep that for future reference.
dexterity.in


----------



## tech/a

XJO has been pretty well spot on to the analysis shown above.


----------



## hotqld

Has anyone been using Turbo    Trader  for identifying intraday volume increases and doing any good from it?
I dont mean the FX one this one has live streaming data from the ASX.
Thanks


----------



## tech/a

This isnt Turbo Trader But Tradeguider

Fading volume is a good earn
These are some old charts I have on file but common with all of them.


----------



## ThingyMajiggy

Got a query with any volume followers out there, how would you read the following chart, its a 2 minute of CL, I have hidden the latest few bars at the time I took the screenshot, because I want to see how you would read it, what do you expect price to do from here on? I'm interested to hear what the candle traders have to say about that too, that would be an bearish koala butterfly doji engulfing swallow candle or something wouldn't it? (all you guys that look at or watch crude probably know what its done since this but try not to peek : )


----------



## Dracuu

ThingyMajiggy said:


> Got a query with any volume followers out there, how would you read the following chart




I think it will take out the top of the last bar shown within 12 minutes. Did I win?


----------



## Timmy

ThingyMajiggy said:


> engulfing swallow




African or European?


----------



## ThingyMajiggy

Dracuu said:


> I think it will take out the top of the last bar shown within 12 minutes. Did I win?




You cheated : but yes you win, it took out the top in the next 4 minutes though, so I'll deduct some points for that. 



Timmy said:


> African or European?




Definitely African, much more effective, its when you get a mixture of them both that its a real gem, The Afripean, winner through and through.


----------



## tech/a

I dont trade crude so havent looked we know it has taken out the high.
The last bar shown shows a great deal of selling.
Youd then be looking to see if the next bar or 2 were inside bars and/or very low volume.If this is the case then selling had ceased and the low of the last lowest bar would become the trailing stop. 

So I would say volume dried up
and range.
It would be likely that any rise then came from lower volume.


----------



## ThingyMajiggy

tech/a said:


> I dont trade crude so havent looked we know it has taken out the high.
> The last bar shown shows a great deal of selling.
> Youd then be looking to see if the next bar or 2 were inside bars and/or very low volume.If this is the case then selling had ceased and the low of the last lowest bar would become the trailing stop.
> 
> So I would say volume dried up
> and range.
> It would be likely that any rise then came from lower volume.




This is what it did after that candle, the candle itself looks different for some reason, must be a fault in the data or something I dunno.


----------



## tech/a

So next bar the one after the arrow.
Volume dried up and range tightened
Old resistance became support and there was a wide range thrust to create a new high.
So there was a good entry signal and a perfect stop at the low of the bar after the arrow.


----------



## Dracuu

ThingyMajiggy said:


> You cheated : but yes you win, it took out the top in the next 4 minutes though, so I'll deduct some points for that.




I didn't cheat. I have just been trading for a very long time. 

In my early days I did a lot of Gann type analysis and that taught me to put a lot more weight on time rather than price. 
In this case a market had been trending up for a long time but the retracement was very quick so I thought it would most likely just continue up and due to the strength it has already shown the continuation would be strong. 
Strength is shown in time not price. I don't look at volume all that much.


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## ThingyMajiggy

Dracuu said:


> I didn't cheat. I have just been trading for a very long time.
> 
> In my early days I did a lot of Gann type analysis and that taught me to put a lot more weight on time rather than price.
> In this case a market had been trending up for a long time but the retracement was very quick so I thought it would most likely just continue up and due to the strength it has already shown the continuation would be strong.
> Strength is shown in time not price. I don't look at volume all that much.




Interesting, obviously works for you if you've been doing it for a very long time? 

At what point determines whether its a fast or slow pullback? eg. you said that was a fast pullback, how many more bars would make it a "slow" pull back and make you think things aren't quite so strong? Just curious 

You are one of the Gann believers obviously? You think he was a successful trader? I'm not having a go, just noticed there is a split camp as far as Gann goes, I haven't looked into it, never really interested me much, looked like a load of rubbish in my opinion, yet to be proven that it works....but thats just me. Happy to be proven wrong.


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## Dracuu

ThingyMajiggy said:


> At what point determines whether its a fast or slow pullback? eg. you said that was a fast pullback, how many more bars would make it a "slow" pull back and make you think things aren't quite so strong? Just curious




I look for previous ranges to repeat. The previous retracement lasted about 3 bars and then the last bar on the chart did slightly more than that previous range but it did it in one bar. I see that as a strong market where most people would see that as weak market especially if you give a lot of weight to volume (which I do not).
If it went down for say 5 bars and the same or more distance in price then I would say it is weakening and probably wouldn't expect as strong a move up. 



ThingyMajiggy said:


> You are one of the Gann believers obviously? You think he was a successful trader? I'm not having a go, just noticed there is a split camp as far as Gann goes, I haven't looked into it, never really interested me much, looked like a load of rubbish in my opinion, yet to be proven that it works....but thats just me. Happy to be proven wrong.




I have studied pretty much every single bit of information I could get my hands on regarding Gann. I purchased all original copies of every single thing he published and studied every aspect in depth for about 6 years. It actually consumed me but that is a long story and for that reason I actually try to keep out of all the Gann discussions.

Do I think it works? I don't believe the mystical or planetary aspects have any credibility at all and forget about 1x1 lines and 1x2 lines etc. or 33%, 50% retracements etc. but I believe the basic stuff like counting time periods or measuring distances in price (all the market cycle stuff) is without a doubt very useful if done correctly.

There are heaps of other things that are really useful like recognising leading and lagging markets and seasonal cycles etc. Overall I would recommend to anyone that they become familiar with his basic techniques as I am sure it will help them.


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## satanoperca

Can I ask why is volume always looked at in isolation of the individual stock being analysed and not in relation to the over volumes of the market?

So XYZ has a large volume day and so does the XAO, is this different to the XYZ has a low volume day while the XAO does not? Or XYZ has a large volume down day while the XAO has a high volume up day.

Just been researching and trying to get a feel for VSA, but finding that it is only looking a one face of the coin.

Cheers


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## tech/a

satanoperca said:


> Can I ask why is volume always looked at in isolation of the individual stock being analysed and not in relation to the over volumes of the market?
> 
> So XYZ has a large volume day and so does the XAO, is this different to the XYZ has a low volume day while the XAO does not? Or XYZ has a large volume down day while the XAO has a high volume up day.
> 
> Just been researching and trying to get a feel for VSA, but finding that it is only looking a one face of the coin.
> 
> Cheers




The XAO/XJO is an index of a group of shares.
It is chart is a depiction of the price action of those shares in accumulation.
XYZ share is controlled by the individuals investing or divesting in it.

Commonly both will or will not be correlated.
VSA is the study of supply and demand in various timeframes depicted by volume and bar range (In general terms).
Not a comparison of various constituents.


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## The Edge

Monday  14 June 2010

Santoperca:

Volume is an important component that reveals the quality of the supply and demand characteristic(s) of a stock, even an average.  It is to be viewed for each stock selection as a clue in assessing the quality, or lack, as a market move is underway.

If price were at/approaching a point of resistance, for example, you want to see an increase in volume, [effort] that tells you there is strong interest existing in the effort to continue higher.  If volume decreases at an area of resistance, [volume goes with price, so you may likely see a smaller range, indicating buyers' inability to extend the range higher, and/or sellers meeting the effort of buyers, keeping the range narrow], the lower volume tells you that there is not a lot of, or not enough effort to break through the resistance area.  This would also reflect a lack of demand when demand is required to make its presence known.

As this is occurring, what the volume is on the underlying index is of no consequence for the individual circumstance.


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## tech/a

The Edge said:


> Monday  14 June 2010
> 
> Santoperca:
> 
> Volume is an important component that reveals the quality of the supply and demand characteristic(s) of a stock, even an average.  It is to be viewed for each stock selection as a clue in assessing the quality, or lack, as a market move is underway.
> 
> If price were at/approaching a point of resistance, for example, you want to see an increase in volume, [effort] that tells you there is strong interest existing in the effort to continue higher.  If volume decreases at an area of resistance, [volume goes with price, so you may likely see a smaller range, indicating buyers' inability to extend the range higher, and/or sellers meeting the effort of buyers, keeping the range narrow], the lower volume tells you that there is not a lot of, or not enough effort to break through the resistance area.  This would also reflect a lack of demand when demand is required to make its presence known.
> 
> As this is occurring, what the volume is on the underlying index is of no consequence for the individual circumstance.




Hmm dont agree with this.

This i presume is a perfect example??


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## tech/a

And this--perfect according to your description tremendous volume on the breakout!!


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## satanoperca

tech/a said:


> Commonly both will or will not be correlated.




This is the part I will further investigate.

Cheers


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## tech/a

I actually find its not as clear cut as 90% of traders think.


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## tech/a

satanoperca said:


> This is the part I will further investigate.
> 
> Cheers




If one is heavily weighted in an index then it is likley.
if not it may not have an effect.


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## Trembling Hand

The Edge said:


> If price were at/approaching a point of resistance, for example, you want to see an increase in volume, [effort] that tells you there is strong interest existing in the effort to continue higher.



Nah that is exactly what makes resistance; a large amount of supply.



The Edge said:


> If volume decreases at an area of resistance, [volume goes with price, so you may likely see a smaller range, indicating buyers' inability to extend the range higher, and/or sellers meeting the effort of buyers, keeping the range narrow], the lower volume tells you that there is not a lot of, or not enough effort to break through the resistance area.  This would also reflect a lack of demand when demand is required to make its presence known.



Cannot agree either. If price approaches an area of old resistance and there is low volume that indicates a lack of supply. Thats a very good signal. Resistance holds when the buyers are continually overwhelmed by sellers. No sellers to supply the resistance means a good chance that any further buying will push through without any further resistance. thus higher prices to come.


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## Trembling Hand

satanoperca said:


> This is the part I will further investigate.
> 
> Cheers




volume and the indexes are very hard to read as the price of an index is cap weighted yet the volume is not.

Its possible to have a high volume day in the sml/mid-caps of the index yet an average day in the top 20 of the XAO. What would you take from that? The volume will be large but the move or effect on the price of the index will be minimal because the top 20 make up 70% of the index.

Another problem with index volume will for example happen on Thursday when the SPI futs roll and you will have 3 months of arbitrage being unwound on the open. What will you take from that high volume event? It will be the highest volume day for three months yet its not what it seems to be.


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## tech/a

High volumes in an up move generally signal supply.
There are exceptions.
In a down move Buying but there are exceptions.
The secret lies in the next few (2-3) bars.
They will disclose what the volume was.

Note in both examples volume dries up AFTER the move up showing clearly no demand.
The test in the first example is on high volume and clearly shows supply.
The market just then falls away as expected.


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## The Edge

Tuesday  15 June 2010

Sorry gents, we disagree.

TH: Your first negative makes no sense to me.  If volume is weak when approaching an area of resistance, the market activity is saying there is not sufficient buying effort to break through the overhead supply.  If the volume is strong and the range size increases, there is a greater likelihood that resistance will give way.  Knowing where the trend is at the time is also important as an aid in
assessing the situation.

To your second comment, price approaching resistance on smaller volume is not necessarily a lack of supply.  It would more likely be a lack of demand, and the size of the range for that day would confirm it.  Supply is already proven by virtue of the existing resistance.  The burden is on buyers to increase their volume effort to break through the old supply.  Less volume = less buying effort.

tech/a:  Increased volume in an up move is a clear demonstration of buyers being in control.  The location of the closes would confirm that, as well.  If high volume were to be supply, there would be no uptrend.

It is agreed that a decrease in volume would be indicative of a lack of demand, in an uptrend, where the range is generally smaller.  The same decrease in volume, but with a wider range bar to the upside would be a lack  of supply, as what buyers there were encountered little resistance.

There are no "secrets" in reading price and volume analysis.  It is a matter of hands on experience, like anything else.

Sorry, but your second paragraph is not clear to me.  

Reading volume is more of an art form that cannot be reduced to a formula.
At times, it can appear to be confusing, but when kept in context with the prevailing trend of the chosen time frame, volume falls into an identifiable intent/meaning.  The higher the time frame, the more reliable the read.  Once one gets into very small intra day readings, there is a lot of "noise" and it can be less reliable.

Cheers!


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## tech/a

The Edge said:


> Tuesday  15 June 2010
> 
> Sorry gents, we disagree.
> 
> TH: Your first negative makes no sense to me.  If volume is weak when approaching an area of resistance, the market activity is saying there is not sufficient buying effort to break through the overhead supply.  If the volume is strong and the range size increases, there is a greater likelihood that resistance will give way.  Knowing where the trend is at the time is also important as an aid in
> assessing the situation.
> 
> To your second comment, price approaching resistance on smaller volume is not necessarily a lack of supply.  It would more likely be a lack of demand, and the size of the range for that day would confirm it.  Supply is already proven by virtue of the existing resistance.  The burden is on buyers to increase their volume effort to break through the old supply.  Less volume = less buying effort.
> 
> tech/a:  Increased volume in an up move is a clear demonstration of buyers being in control.  The location of the closes would confirm that, as well.  If high volume were to be supply, there would be no uptrend.
> 
> It is agreed that a decrease in volume would be indicative of a lack of demand, in an uptrend, where the range is generally smaller.  The same decrease in volume, but with a wider range bar to the upside would be a lack  of supply, as what buyers there were encountered little resistance.
> 
> There are no "secrets" in reading price and volume analysis.  It is a matter of hands on experience, like anything else.
> 
> Sorry, but your second paragraph is not clear to me.
> 
> Reading volume is more of an art form that cannot be reduced to a formula.
> At times, it can appear to be confusing, but when kept in context with the prevailing trend of the chosen time frame, volume falls into an identifiable intent/meaning.  The higher the time frame, the more reliable the read.  Once one gets into very small intra day readings, there is a lot of "noise" and it can be less reliable.
> 
> Cheers!




You maybe interested in learning something.

http://www.tradeguider.com/free/index.aspx

Enter your email then Dowload
"Master The Markets".

Enjoy.--its Free.


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## Trembling Hand

The Edge said:


> Sorry gents, we disagree.
> 
> TH: Your first negative makes no sense to me.  If volume is weak when approaching an area of resistance, the market activity is saying there is not sufficient buying effort to break through the overhead supply.  If the volume is strong and the range size increases, there is a greater likelihood that resistance will give way.
> 
> To your second comment, price approaching resistance on smaller volume is not necessarily a lack of supply.  It would more likely be a lack of demand, and the size of the range for that day would confirm it.  Supply is already proven by virtue of the existing resistance.  The burden is on buyers to increase their volume effort to break through the old supply.  Less volume = less buying effort.




We clearly believe the completely opposite, for that I am very happy. But when a price approaches a resistance level tell me how can extra relative volume be supplied?

Not by buyers it must come from holders/sellers. Only then can volume increase. If they don't add extra volume for the buyers anyone wanting to fill buy orders are forced to pay higher and higher prices resulting in a breakout. If the volume is matched by holders then no breakout = resistance.


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## $20shoes

It would make my life a lot easier if volume were as simple as a two paragraph entry in a trading text ( which is what most texts spend on the topic). 

A lot of the time the story unfolds behind the obvious.

You can see that Post 165 has a clear example ( sucked me in) that volume on an upmove does not necessarily translate to buyer support.  

https://www.aussiestockforums.com/forums/showpost.php?p=546994&postcount=165


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## Wysiwyg

$20shoes said:


> *It would make my life a lot easier if volume were* *as simple as a two paragraph entry in a trading text* ( which is what most texts spend on the topic).
> A lot of the time the story unfolds behind the obvious.




Much gratitude goes to Nick Molchanoff for creating this version of a bullish/bearish volume graph. There are many tails in this picture but the obvious ones are:
A) the divergence of bullish volume from the rising All Ords price
B) the crossing of bullish/bearish volume 
C) the peak of capitulation with the bearish volume
and 
D) above average volume (blue bars)

Bit of a plug for Amibroker and it's versatility.


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## $20shoes

Thank you. I still feel that you have to eyeball volume in the context of what is going on in the market place. So an indicator can "indicate" but it can't "educate". There are some VSA flags etc on some packages that take the guesswork out.
But what is not obvious to many traders trading setups based on volume is the "subtleties" of volume analysis (i'm still a novice).  
Would you mind posting a chart using that volume indicator for HGO from approx March 1st to Jun 1st? Thanks WYSIWYG.


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## Trembling Hand

$20shoes said:


> Thank you. I still feel that you have to eyeball volume in the context of what is going on in the market place. So an indicator can "indicate" but it can't "educate". There are some VSA flags etc on some packages that take the guesswork out.
> But what is not obvious to many traders trading setups based on volume is the "subtleties" of volume analysis (i'm still a novice).
> Would you mind posting a chart using that volume indicator for HGO from approx March 1st to Jun 1st? Thanks WYSIWYG.




I wouldn't think you need much in the way of indicators to figure out this one.

Few other points not marked due to getting too messy but,


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## ThingyMajiggy

Yeah another interesting thing to do is to take a look at a chart but flip everything around as far as the colours of the volume goes, most of the time its green volume bar because the candle is a higher close etc. But if you swap it around, because of the high volume in either direction is a sign of the opposite way(high volume up bars signal supply coming in so expecting down movement, high vol down bars signal support coming in so expecting upward movement, depending on the following action obviously, but basically its that way). 

Just something that can help, you make the red volume bars green and green ones red, can help get your thinking right, so when you get the big spikes, its the opposite colour to help you remember demand or supply coming in etc. like I have done with this 5m ES chart from last night, I thought it might be something to try for those that can't grasp the high volume up=supply and high vol down=demand and fading high volume etc.


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## tech/a

T/H and Sam.
There is some great stuff here.

I dont have the time right now but feel this whole question of confusion needs de mystifying.

I'll do this tonight and under its own thread.
In this Topic area.


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## Wysiwyg

ThingyMajiggy said:


> Just something that can help, you make the red volume bars green and green ones red, can help get your thinking right, so when you get the big spikes, its the opposite colour to help you remember demand or supply coming in etc. like I have done with this 5m ES chart from last night, I thought it might be something to try for those that can't grasp the high volume up=supply and high vol down=demand and fading high volume etc.




That is a good idea because I found high volume made me impulsive and  sometimes a mental wrestle to switch the thinking.


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## $20shoes

Excellent - very helpful stuff. Let me look at it in more detail tonight.


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## Wysiwyg

$20shoes said:


> Would you mind posting a chart using that volume indicator for HGO from approx March 1st to Jun 1st? Thanks WYSIWYG.



From 1 March to 2 June.


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## Wysiwyg

Can't use volume that can't be seen. Watch millions of dollars buy/sell between the visible bid/offer price. I suppose limit orders are the only way to work with dark bid/offer pools but how deep are the pools.


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## tech/a

Volume is visible once it has bought or sold.
Where it lies above below or at the price of little value
in analysing bull or bearish tendencies. It can be added
to or subtracted from with no effect on price.

Once used it can be seen.
Then IN RELATION to the chart it can be analysed.


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## Wysiwyg

tech/a said:


> Volume is visible once it has bought or sold.
> Where it lies above below or at the price of little value
> in analysing bull or bearish tendencies. It can be added
> to or subtracted from with no effect on price.
> 
> Once used it can be seen.
> Then IN RELATION to the chart it can be analysed.



Yes that is true. Are Market Depth traders at a disadvantage regarding invisible volume?


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## tech/a

I don't think so.
As you say set a limit order as you see it and wait to be
filled or not.
A days volume can alter the analysis so a limit order maybe
a wise thing.

I guess if your filled and you see volume being churned without a reaction in price
that tells you supply is definitely evident.


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## pixel

Wysiwyg said:


> Yes that is true. Are Market Depth traders at a disadvantage regarding invisible volume?



I'm not sure what you mean by "Market Depth traders". If you think of them as traders that watch market depth, then I'd contend that they would be most likely to place limit orders - unless one were chasing a stock up or down, desperate to build or liquidate a position. If I know at least roughly where current bids and offers are sitting, I can apply the observed trade direction and momentum to place a lower bid (or higher sell offer) away from "Market" and still be reasonably sure to get a fill. Personally, I always enter limit orders, even if my limit matches the current top line of market depth. That's because I cannot know whether someone else might beat me by a nanosecond, driving my "at Market" away from what I had intended to trade at.

Incidentally, I also place "Best" or "Centre" orders half a tick away from the top level of M/Depth. If such an order is filled or gets a nibble, that fact tells me that there is at least one "hidden" or "dark" counter party willing to compromise. That, too, is a valuable piece of market information.


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## CanOz

Wysiwyg said:


> Can't use volume that can't be seen. Watch millions of dollars buy/sell between the visible bid/offer price. I suppose limit orders are the only way to work with dark bid/offer pools but how deep are the pools.




I'm not sure your understanding of dark pools is correct....


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## Wysiwyg

pixel said:


> If I know at least roughly where current bids and offers are sitting, I can apply the observed trade direction and momentum to place a lower bid (or higher sell offer) away from "Market" and still be reasonably sure to get a fill.



As a relatively small position size market participant, 1/4 cent graduations don't make a huge difference. However all the information isn't on the table regarding orders and importantly their size.
Example, if a 5 cent spread was the standard and there were levels at every cent between with hidden orders then it would be hard to know what price to enter. All one could go with is the last traded price and volume when it appears in Course of Sales.
Another thing I noticed is when I place an order at the 1/4 cent graduation, trades will sometimes leap it to the visible depth. This could be a broker execution issue but ASX market transparency is not now what I expect.


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## Wysiwyg

CanOz said:


> I'm not sure your understanding of dark pools is correct....



Change the word pools to orders if you like but they are hidden from the public.


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## Wysiwyg

So "Dark Orders" is the new word for orders not visible to the public.



> Chi-X
> All Mid-Point Orders are completely hidden, which minimises information
> leakage and market impact when posting liquidity.


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## tech/a

So what happened to full disclosure.
Why not hide the first n levels?
Like a spread.

*which minimises information leakage and market impact when posting liquidity.
*
this is good or bad WHY?


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## Wysiwyg

> ASX Centre Point is Australia's only dark pool matching system which can offer this true integration with the lit market. It's this access which sees around 8% of on-market trading being directed through ASX Centre Point.




Good for large parcel holders as highlighted.
Good for front running.
Good when hidden support is strong.

Annoying  missing fills because orders execute between spread and as I previously stated trades leaping mid point order.


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## Boggo

This "iceberg" symbol is often an indicator of significant interest - in theory.
https://web.iress.com.au/help/Neo 4.00sp1/Content/Core_Help/Orders/iceberg_orders.htm


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