# Decoding Volume: Support/Resistance/Supply and Demand



## tech/a (17 June 2010)

There is a lot of confusion with regard to reading volume.
I'll attempt to make it as clear as crystal for those struggling.
To do so we will have to construct the very essence chart reading and indeed technical analysis---Regardless of the form of analysis---all will be come clear.

All trading is governed by Support and Resistance.
If we trade trends we expect and look for price to break resistance.
If we buy pull backs we expect support to hold so we can jump on a trend.
We sell when we believe resustance will hold and price will not rise further.
If we trade short we look for support to be broken and we look to buy back when we believe support will return.

So whether it be Bollingers,Elliott,RSI Stochastic,trendlines or Volume its support and resistance we seek.

So to Reading volume

Reading volume is all about SUPPLY.
(1) Supply either dries up OR
(2) Supply is overcome by demand.
*
The big problem for everyone is identifying volume as (1) OR (2)*

There are a few ways of doing this.
You can read volume like T/H.
You can look at lower timeframes Daily to 30 min for example.

But for those who cant or dont have access to either of these the answer is simple.

*You CANT tell* if volume is Drying up or being absorbed *until further Bars* show you the answer.

*Remember price CANNOT MOVE UP unless supply has been exhausted--EITHER from being withdrawn OR over powered by buying*

Lets take a look at a classic example




Here we can follow each bar and actually see volume dry up.
Clearly it is absorbed and sellers leave the market---at this level.(Where the volume is)

So now lets see what happens further along in the chart (Its HGO if you hadnt noticed.)




*Is that clearer now??*


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## Whiskers (17 June 2010)

*Re: Decoding Volume---Support/Resistance/Supply and Demand*

That's a good explination, tech/a... but... _"You can read volume like T/H.
You can look at lower timeframes Daily to 30 min for example."_... you mean there are traders who work with only one time frame? 

Maybe that's why I get so tired.  

I use multiple time frames at the same time most of the time. It takes a lot of effort to get focused and comprehend what's happening.


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## tech/a (17 June 2010)

Now lets have a look at what Buying over powering supply looks like and some charateristics going forward.






> you mean there are traders who work with only one time frame?




Yes of course.
I trade in one timeframe myself.
I look for hints at times in others though.
Certainly dont trade a daily trade using a 3 min chart though!


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## $20shoes (17 June 2010)

That's great Tech. I've tried to pull a TH style analysis on BLY (thanks for HGO, TH) which we had discussed over on the other thread. It's a very interesting stock for educational purposes because there's a lot going on with volume.

One thing which you have down pat, and which newbies may struggle with is how volume zones set up points of support or resistance. You can see on BLY that points 5,6 and 9 set up a longer term supply zone that obviously speaks to distribution.

That is, extreme volume often marks a point where a stock is now looked upon differently. Tests of this volume zone can often give us indications of how the market now values this stock. 

As you have shown, low volume can speak volumes ( bad pun).


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## sagitar (17 June 2010)

Hi Tech/A,
A good post! I wanted to add my 2c worth - I think it's important to note that volume itself can also advertise deceptive messages about the trading pattern, particularly if there's a substantial change in price over a relatively short period of time.  This is often prevalent or more noticeable in penny stocks where the volume during this phase of price change starts to decline substantially, thus leading some to wrongly conclude that interest in the stock is waning.  BUT, in reality, what may be potentially occurring is that more money is actually entering the stock despite the lower volume simply because people have to dish out more cash to pay for the rising cost or price of the stock. 

For example, if stock XYZ traded today at around 1.5c with a vol of 10M (equating to a value of $150K worth traded) and then over a short period of time the price reaches 2.8c but with an average volume now down to 8M, a quick calculation of the current traded value would equate to $224K.  So in reality the price is rising (construed as bullish), volume is dropping (construed as bearish) BUT people are willing to put more money into the pot, thus confirming a bullish sentiment is still at play.

So, sometimes bearing in mind the value traded per day can be a bit more informative than simply using volume alone.

That's my 2c worth....
cheers


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## tech/a (17 June 2010)

sagitar said:


> Hi Tech/A,
> A good post! I wanted to add my 2c worth - I think it's important to note that volume itself can also advertise deceptive messages about the trading pattern, particularly if there's a substantial change in price over a relatively short period of time.  This is often prevalent or more noticeable in penny stocks where the volume during this phase of price change starts to decline substantially, thus leading some to wrongly conclude that interest in the stock is waning.  BUT, in reality, what may be potentially occurring is that more money is actually entering the stock despite the lower volume simply because people have to dish out more cash to pay for the rising cost or price of the stock.
> 
> For example, if stock XYZ traded today at around 1.5c with a vol of 10M (equating to a value of $150K worth traded) and then over a short period of time the price reaches 2.8c but with an average volume now down to 8M, a quick calculation of the current traded value would equate to $224K.  So in reality the price is rising (construed as bullish), volume is dropping (construed as bearish) BUT people are willing to put more money into the pot, thus confirming a bullish sentiment is still at play.
> ...




Certainly interesting have you done any testing on the idea?
Any reliability to the theory?
Perhaps an indicator.
Im sure it could be coded up easily enough.

Good stuff shoes.
Will move into some more interesting ideas as time goes by.


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## satanoperca (18 June 2010)

Thanks Tech/A for the write.

It certaintly has become clearer.

You need to be able to see the story of volume and price playing out over a timeframe between the buyers and the sellers with each time unit being a chapter in the book. 

This is fascinating stuff.

Cheers


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## Frank D (18 June 2010)

tech/a said:


> All trading is governed by Support and Resistance.





Finally after all these years you are beginning to make some sense.


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## Trembling Hand (18 June 2010)

satanoperca said:


> You need to be able to see the story of volume and price playing out over a timeframe between the buyers and the sellers with each time unit being a chapter in the book.




Most of its pretty simple stuff when you look at the basics. 

Starting with high volume. The ONLY way you can have high volume is if insiders/existing holders sell - for what ever reason. Thats it (ignoring shorts because if you follow the short sells list you will see they are minuscule).

Look at where the high volume price is in relation to where its came tells you everything about those sellers. If volume comes from insiders the reaction *after *the volume has passed tells you the thinking of those who hold the cash.

<EDIT> Chart is daily BRM


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## tech/a (19 June 2010)

Using BRM

I would like to introduce the concept of EXTREME volume support and resistance.

While not all of the zones marked are EXTREME (Or all possible zones) I have marked up the chart to show the concept.The more extreme the volume to more support and resistance are respected.(I have found).
If you look back over the last 400 bars there are probably 3 EXTREME zones.


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## Garpal Gumnut (19 June 2010)

Pure gold, tech/a.
Keep up the quality of these posts.
support /resistance, vol, bar size, close, strong , weak, buyers , sellers, and that point you made of the difficulty of working out, who is who , until the next bar.
Its easy to forget this basic stuff in the heat of a trade, and its valid over all time frames imo.

gg


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## $20shoes (19 June 2010)

Thanks Tech. 
I've kept some further examples simple, to illustrate the validity of extreme volume zones casting their shadow. These can make for interesting intersects and pivot points in the market. It's not a golden rule, but what should be obvious to traders is the market's perception of a stock on the left side of a extreme volume bar can be fundamentally different to the right side of the extreme volume bar. How that volume is handled ( is it absorbed by demand etc) can set up the direction for new runs and even longer term trends. 

I haven't drawn it in to AJL, but as an example the first extreme volume bar on 18th Dec took the wind out of it and became the onset for 6 months of price decline.


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## tech/a (19 June 2010)

It seems a few here like myself prefer to use support and resistance zones.
These zones work well with consolidation---with or without volume

VOLUME alone in its extreme however tends to create its own zone of support or resistance with or without consolidation (Although it is common to see consolidation after an extreme bar.)

In particular long term past zones can become excellent areas for low risk opportunity.
Using AJL as an example.
I place these zones on my charts during searches for extreme volume.
I also find WEEKLY charts are excellent sources for early LONGTERM signals with volume support/resistance.


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## ceasar73 (6 July 2010)

nice post t/a.
Do you think darvas box and livermore pivot points where simply levels of support/resistance?

cheers.

ceasar73


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## tech/a (7 July 2010)

Yes.
Darvas boxes are simply areas of agreemant with current price levels.
Once there is disagreement then price moves again.
Not familiar with Livermore pivots.


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## white_crane (12 September 2010)

Another excellent thread. Thanks tech/a (and the other contributors too)


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## tech/a (12 September 2010)

Should add to this thread as there is quite a bit more.
When I have time.
Unless others beat me to it.
One really interesting aspect is what happens when volume dries up.
What does it mean in the context of a chart.

I look for sizable volume and then want to see what LACK as in very very low volume (1 bar in my timeframe) going forward is telling me.

Lack of volume generally indicates a lack of demand or supply.
The range and position of the bars close relative to the bar before it will tell the story.

Example


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## Apollo_kk (21 September 2010)

Tech/a 

Nice stuff.  Just one question are the concepts of support and resistance related to accumulation and distribution or are they unrelated?  I guess that when you are talking about supply and demand you are talking about distribution and accumulation is that right and not support and resistance.  Is there an indicator that measures supply and demand?

Thank you in advance
A


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## tech/a (21 September 2010)

Apollo_kk said:


> Tech/a
> 
> Nice stuff.  Just one question are the concepts of support and resistance related to accumulation and distribution or are they unrelated?  I guess that when you are talking about supply and demand you are talking about distribution and accumulation is that right and not support and resistance.  Is there an indicator that measures supply and demand?
> 
> ...




In situations above its more a dump or exhaustion of buyers or sellers which is indicated.
Accumulation and distribution will be seen at resistance or support areas over repeated attempts to break through rather than an isolated case.

There is quite a discussion on this---unfortunately off for a couple of weeks so will return to this thread when Im back---or if I can get it on my I phone i may check in while away---if I have time.


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## Apollo_kk (21 September 2010)

Thanks Tech


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## tech/a (21 September 2010)

Perhaps an example of some short term resistance and Distribution.
on 9 min FTSE Chart.


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## tech/a (22 September 2010)

To continue from last night singular bars of high selling became an area of distribution over multiple bars.


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## Apollo_kk (22 September 2010)

Tech - I must say that you have raised an interesting topic here.  However, I feel that we need to be clear on the concepts, their relationship and inter-relationship.  Concepts, or variables, being Support/Resistance, Supply and Demand, Accumulation and Distribution and today you raised another concept in terms of exhaustion and these being in relation to the variable of volume.  Furthermore, from the discussion I am unclear which is the dependent and which is the independent variable or even if it matters.  Does volume depend on support/ resistance or is it the other way around?  I need to do some thinking on the matter.


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## explod (22 September 2010)

Great thread, the basics are where it is at and it does not come better than what is being espoused here.

Newbies note well.  And do not be afraid to ask questions, sometimes it is something that we all want to know.


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## Boggo (22 September 2010)

Apollo_kk said:


> Tech - I must say that you have raised an interesting topic here.  However, I feel that we need to be clear on the concepts, their relationship and inter-relationship.  Concepts, or variables, being Support/Resistance, Supply and Demand, Accumulation and Distribution and today you raised another concept in terms of exhaustion and these being in relation to the variable of volume.  Furthermore, from the discussion I am unclear which is the dependent and which is the independent variable or even if it matters.  Does volume depend on support/ resistance or is it the other way around?  I need to do some thinking on the matter.




Have a squizzy here Apollo...
http://www.scribd.com/doc/12681451/Basic-Trading-Guide


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## OldFart (23 September 2010)

If you guys are talking stocks, have you ever used L2 quotes?

You probably have, but in case someone didn't....


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## tech/a (30 September 2010)

Apollo_kk said:


> Tech - I must say that you have raised an interesting topic here.  However, I feel that we need to be clear on the concepts, their relationship and inter-relationship.  Concepts, or variables, being Support/Resistance, Supply and Demand, Accumulation and Distribution and today you raised another concept in terms of exhaustion and these being in relation to the variable of volume.  Furthermore, from the discussion I am unclear which is the dependent and which is the independent variable or even if it matters.  Does volume depend on support/ resistance or is it the other way around?  I need to do some thinking on the matter.




sorry O/s at the moment sadly not for a lot longer!
Anyway I dont know that there is a dependancy on all or any.
there is however a tendacy to see clear alterations in volume at points in a trades history.
lets take exhaustion of a move
Your likely to see a dramatic increase in volume and possibly range as traders unload at an old resistance level.
You may also see it in the form of increased volume on a squat (Tight range bar) generally considerable THEN followed by a definate reversal bar---this bar being the key.
IF however that bar is followed by a bar which clearly breaks resistance then it can be seen that there is continued buying and old resistnace is likely to become support.

Subtle but one of the nuences in reading volume.
Personally I believe trading volume is a case of patience.
Only taking trades which clearly correlate to a number of prior---and importantly continued --- confirmed chart analysis.
For instance going long on a bar which bounces off previous resistance (now support) and placing a stop below that new support would be a good trade in my view particularly if there was blue sky above and buying was moderate---not massive.

There are many nore and when I get back will run through charts in the EOD format (along with some others) which demonstrate the topic and variuos aspects we bring to the table.

In the meantime I have  Fiji golf club t time with my name on it.
Bula!


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## hmmm (5 October 2010)

Hi tech/a, 

I realise your charts don't display candlestick bars but do you use these high volume wide range bars as support and resistance zones? or do you look further into the price spread and pull out individual elements like close or high or low individually?

Cheers


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## tech/a (5 October 2010)

Ultra high volume bars are what I describe as volume support or resistance zones.
Regardless of method of charting.
Bar/Candle---
I have posted many charts on this on this thread.


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## hmmm (5 October 2010)

tech/a said:


> Ultra high volume bars are what I describe as volume support or resistance zones.
> Regardless of method of charting.
> Bar/Candle---
> I have posted many charts on this on this thread.




I guess what i was asking is what else do you read from the price spread? how do you value a wide spread as opposed to a narrow spread? do these change the S/R thinking? what about the close? does this come into play at all?

cheers


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## tech/a (6 October 2010)

hmmm said:


> I guess what i was asking is what else do you read from the price spread? how do you value a wide spread as opposed to a narrow spread? do these change the S/R thinking? what about the close? does this come into play at all?
> 
> cheers




Its a good question and one which deserves more time for an answer than I have now. It is in fact the crux of interpretation of VSA a question I'm sure pondered upon by many/if not all who investigate VSA.


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## hmmm (6 October 2010)

tech/a said:


> Its a good question and one which deserves more time for an answer than I have now. It is in fact the crux of interpretation of VSA a question I'm sure pondered upon by many/if not all who investigate VSA.




 Thanks hey, 

i'll see what i can dredge up on the matter and maybe ask you a few questions,

Regards,

James


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## lenny (13 October 2010)

Could someone give me their opinion on BTA chart.

Looks to me that its in basing pattern? Is this in an accumulation phase?

Regards
Lenny


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## tech/a (13 October 2010)

Sadly from a VSA stand point there is distribution rather than accumulation.
This is evidenced by each very high volume bar being followed by a high volume reversal bar indicating the initial very high volume bar was in fact dominated by selling rather than buying.

There is nothing in this chart at this point which indicates accumulation---in my view.
14 to 19 sept was definately selling


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## lenny (13 October 2010)

Thanks heaps Tech/a , Selling prior to a pending lani annoucement cant be good,

Regards
Lenny


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## roland (10 December 2010)

Correct me if I am wrong, but it looks like the sellers in IFN are reaching exhaustion. Seems like every test of  sub $0.51 - $0.495 is producing less and less volume. The daily range is tightening and the depth is nearing equilibrium.

Add to that, that we have touched an all time low of $0.495


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## tech/a (11 December 2010)

roland said:


> Correct me if I am wrong, but it looks like the sellers in IFN are reaching exhaustion. Seems like every test of  sub $0.51 - $0.495 is producing less and less volume. The daily range is tightening and the depth is nearing equilibrium.
> 
> Add to that, that we have touched an all time low of $0.495




Its at an important Support level.
While selling at this level is lacking support buyers aren't exactly stumbling in at this point snapping a bargain. (its not seen as a bargain rather --currently-- seen as fair value.)

It does at this level offer a low risk entry with a tight stop available.
But trading below this level would be seen as very weak.

Would like to see a strong wide range bar boosting price away from the support area.

So while not definitive in analysis at this point not a crazy entry point either.
Risk can be well managed.


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## roland (13 December 2010)

Thinking about SDL, we are getting close to a 2.5 year high. One notes a minor reversal on a high volume spike back in September 2010, then a fall off in volume with a 3 week consolidation period on reducing volume. Since then we have a second longer consolidation period, then interest picked up again mid December.

Looking previously at a longer period of history, there was a big sell off at $0.515. Of course no one can really know what will unfold, but it's hard not to think that $0.515 could be a resistance point.

I guess a warning sign would be a pattern similar to the one indicated at the start of 2nd week  Sep 2010. Looks like a gap up with high volume closing lower on the day.

Interested in thoughts on how a reversal might be forecast based on the charts and volume example posted.


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## tech/a (14 December 2010)

Rolond

There are a few things I look for (in any time frame) when price nears a resistance area.
Its pretty common (In Futures) to see stops placed a tick or 2 above and below the resistance,so you'll see an increase in volume--the question is whether that volume will be greater than selling OR Exhaust selling.
You wont know for a few bars.

For stocks its a little easier.
Volume will either exhaust or push through the resistance area without the added pressure of short stops (generally).
So I look for either a gap through resistance--a wide range bar through resistance or any trading through resistance which ISN'T accompanied by very high volume.


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## roland (14 December 2010)

roland said:


> Correct me if I am wrong, but it looks like the sellers in IFN are reaching exhaustion. Seems like every test of  sub $0.51 - $0.495 is producing less and less volume. The daily range is tightening and the depth is nearing equilibrium.
> 
> Add to that, that we have touched an all time low of $0.495




Interesting day, could see the sellers come in as IFN hit $0.555. The volume bar on the chart shows the sellers happy to offload, but we still ended up on a high for the day. Looking at the volume at $0.495, one can assume that there are quite a few strong holders that may follow the pack and dump on any sign of weakness.

I suspect that we may find some resistance here at $0.555 - $0.56, in fact I have a sell order sitting at $0.56. The depth has certainly swung around and the buyers are stepping up to the plate. If we can get enough volume tomorrow we may see the sellers get over powered.


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## tech/a (14 December 2010)

roland said:


> Interesting day, could see the sellers come in as IFN hit $0.555. The volume bar on the chart shows the sellers happy to offload, but we still ended up on a high for the day. Looking at the volume at $0.495, one can assume that there are quite a few strong holders that may follow the pack and dump on any sign of weakness.
> 
> I suspect that we may find some resistance here at $0.555 - $0.56, in fact I have a sell order sitting at $0.56. The depth has certainly swung around and the buyers are stepping up to the plate. If we can get enough volume tomorrow we may see the sellers get over powered.




Well I'm long!
Took my own analysis!
Stop 49c so will see.


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## roland (14 December 2010)

tech/a said:


> Well I'm long!
> Took my own analysis!
> Stop 49c so will see.




ha ha, I'm long too! You may remember me with OZL, I did the same silly thing with IFN


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## roland (14 December 2010)

I find the 4 highlighted bars quite interesting....

1. long down bar on medium volume, closing low
2. high volume, longish bar ending high
3. smaller bar, testing low, reduced volume
4. volume still declining, with another test of the low, ending the day low

almost looks like we should have seen more weakness than what eventuated? Did we really see enough tests of the volume on the lows?


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## roland (14 December 2010)

Another interesting fact is that the UK Childrens Investment Fund have relentlessly increased their holdings at regular intervals:

Shareholders buying
Date 	Shareholder 	Previous % 	New % 	Shares Traded
06-12-10 	The Children Investment Fund Management (UK) LLP 	22.17 	23.23 	8,255,466
15-09-10 	The Children Investment Fund Management (UK) LLP 	21.09 	22.17 	8,176,155
31-08-10 	The Children Investment Fund Management (UK) LLP 	19.96 	21.09 	1,169,830
28-05-10 	Leo Fund Managers Ltd and on behalf of Leo Capital Growth SPC Funs and Pluirma Fund 	-- 	5.07 	--
21-05-10 	The Children Investment Fund Management (UK) LLP 	18.85 	19.96 	7,918,987
09-02-10 	The Children Investment Fund Management (UK) LLP 	18.37 	18.85 	3,910,397
02-02-10 	The Children Investment Fund Management (UK) LLP 	17.34 	18.37 	8,257,684
20-01-10 	The Children Investment Fund Management (UK) LLP 	16.28 	17.34 	8,498,947
21-12-09 	The Children Investment Fund Management (UK) LLP 	15.00 	16.28 	7,847,097

Having 25% of the shares tied up with a firm holder has to bolster some SP support


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## tech/a (14 December 2010)

Short SPI though!


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## roland (14 December 2010)

tech/a said:


> Short SPI though!




Not sure what SPI is: Share Price Index?

Interesting to highlight the fact that this particular "Fund Manager" has no risk management, one wonders how far down the toilet their equity chart is


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## roland (15 December 2010)

The 6th was quite a noteworthy day for IFN:

- large volume spike
- touched an all time low
- UK Children's Investment Fund buys 65 million
- Macquarie Presentation

Quite boring today, touched 0.56 but was instantly pulled down by sellers. I suspect there are sellers in the wings from the 6th that want a couple of pips above 0.535.  I further suspect that the buyers are looking for a break above 0.56.

If we keep churning for a couple of days, I'd be reasonably confident of a break with some volume once we clear 0.56

What do ya reckon Tech?


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## tech/a (15 December 2010)

Nothing excites me yet.
I took the trade due to a low risk entry so would like to see some good range if its going to rise on medium volume.
High volume and range would indicate possible selling weakness.

ahh its all guess work at this point.
Patience.


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## roland (16 December 2010)

wooh hoo, did you see the opening volume Tech? 2.5 Mil


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## tech/a (16 December 2010)

No wasn't looking.
The only stock in my resources portfolio in the red!
Gotta go there is some lawn growing outside I want to watch!

Good to see some indexes behaving themselves! (as in obeying analysis).


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## roland (16 December 2010)

Well there is some desk trader that wants IFN to go up, constant minimal trades eating up whatever is on offer.


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## Wysiwyg (7 October 2011)

Here is a video showing retrospective trade entries using high volume wide ranging bars in conjunction with MT Predictor's projected decision points and/or prior pivot points.

http://www.mtpredictor.com/help/videos/DP1/DP1.html


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## Wysiwyg (27 September 2016)

Have a stock that although being at support level has a constant stream of sellers wanting to sell at support. Price rises off support a little only to be swamped by supply. Surely the sellers are selling at a loss or maybe there is a majority of short sellers among them. Volume average.


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## cynic (27 September 2016)

Wysiwyg said:


> Have a stock that although being at support level has a constant stream of sellers wanting to sell at support. Price rises off support a little only to be swamped by supply. Surely the sellers are selling at a loss or maybe there is a majority of short sellers among them. Volume average.




Could it be that this support level has transmuted into resistance as they sometimes do?


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## Wysiwyg (27 September 2016)

cynic said:


> Could it be that this support level has transmuted into resistance as they sometimes do?




No the support level hasn't been breached. MSB it is.


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## Wysiwyg (29 September 2016)

Wysiwyg said:


> Have a stock that although being at support level has a constant stream of sellers wanting to sell at support. Price rises off support a little only to be swamped by supply. Surely the sellers are selling at a loss or maybe there is a majority of short sellers among them. Volume average.



Still happening. Price rose off support only to be sold down again. Another observation is the size of the sell parcels. It is like  thousands of home traders are dropping small parcels into the markets throughout the day. Average parcel size 570 and not sitting in the queue but stacking when buyers start eating into a level.


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## tech/a (29 September 2016)

Its a bot.

A good explanation of how it works here.
Good chance big trades are buying OR selling.
Basically done NOT to move the market.


https://en.wikipedia.org/wiki/Algorithmic_trading


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## aBadTrader (30 September 2016)

This thread is Gold - that makes things quote clear and it also goes to show that you have patience to wait for the setup instead of trying to anticipate the setup - definitely a skill a new (bad) trader like me should be taking on board.

My question to you is, what software do you have or have you employed in seeking out those setups? They can occur on so many charts on so many stocks and finding them would be difficult. Any advice on that front?


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## tech/a (30 September 2016)

aBadTrader said:


> This thread is Gold - that makes things quote clear and it also goes to show that you have patience to wait for the setup instead of trying to anticipate the setup - definitely a skill a new (bad) trader like me should be taking on board.
> 
> My question to you is, what software do you have or have you employed in seeking out those setups? They can occur on so many charts on so many stocks and finding them would be difficult. Any advice on that front?




I use Metastock only because I've had it set up for years
Amibroker
Ninja
And there is something new and VERY powerful on the horizon.
Using Python.

But follow Petes thread
Implement notation is so important.
You can have all the potential in the world
And fail because you can't put it into practice
Profitably.


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## minwa (30 September 2016)

aBadTrader said:


> it also goes to show that you have patience to wait for the setup instead of trying to anticipate the setup - definitely a skill a new (bad) trader like me should be taking on board.




I have found anticipating setups is better than waiting for setups. Setups are overrated - they fail just as much (actually more) as they succeed. We scan for setups that worked and draw our attention there ignoring the many same setups that failed previously.  

A confirmation of a setup is usually the breakout of a level. Eg. mid point of double bottom, neckline of head & shoulders, trendline of pennants/flags/triangles. This gives you a unfavorable reward to risk as opposed to anticipating and getting before the setup confirms. 

It really does not have much to do with setups..


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## Gringotts Bank (30 September 2016)

tech/a said:


> And there is something new and VERY powerful on the horizon.
> Using Python.




Who's developing it?  Commercial product?  Machine learning software/?

thanks


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## tech/a (30 September 2016)

minwa said:


> I have found anticipating setups is better than waiting for setups. Setups are overrated - they fail just as much (actually more) as they succeed. We scan for setups that worked and draw our attention there ignoring the many same setups that failed previously.
> 
> A confirmation of a setup is usually the breakout of a level. Eg. mid point of double bottom, neckline of head & shoulders, trendline of pennants/flags/triangles. This gives you a unfavorable reward to risk as opposed to anticipating and getting before the setup confirms.
> 
> It really does not have much to do with setups..




Certainly agree with your findings.
Although there will be more false starts (My findings).
Better R/R if you can minimise D/D On the false starts.


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## aumakler (23 December 2016)

_SECTION_BEGIN("strefa volumenowa");
SetChartOptions(0,0,chartGrid30|chartGrid50|chartGrid70);
mnoznik=Param("krotnosc", 1,0.1,10,0.1);  
srednia=Param("MA",30,20,300,10);
sredniaV=MA(V,srednia);
vol = V > sredniaV * mnoznik;
function GetTop(bars)
{
Top = vol;
return Top;
}
P1 = GetTop(0);
RF1=ValueWhen(P1,H);
Plot(RF1,"",colorGreen,16+40 |styleNoLabel);
RF2=ValueWhen(P1,L);
Plot(RF2,"",colorRed,16+40|styleNoLabel);

function GetVisibleBarCount() 
{ 
 lvb = Status("lastvisiblebar"); 
 fvb = Status("firstvisiblebar"); 

 return Min( Lvb - fvb, BarCount - fvb ); 
} 

function GfxConvertBarToPixelX( bar ) 
{ 
 lvb = Status("lastvisiblebar"); 
 fvb = Status("firstvisiblebar"); 
 pxchartleft = Status("pxchartleft"); 
 pxchartwidth = Status("pxchartwidth"); 

 return pxchartleft + bar  * pxchartwidth / ( Lvb - fvb + 1 ); 
} 

// Szerokosc Bar w pixelach
function GfxConvertBarWdthPixelX() 
{ 
 lvb = Status("lastvisiblebar"); 
 fvb = Status("firstvisiblebar"); 
 pxchartwidth = Status("pxchartwidth"); 

 return  pxchartwidth / ( Lvb - fvb + 1 ); 
} 



function GfxConvertValueToPixelY( Value ) 
{ 
 local Miny, Maxy, pxchartbottom, pxchartheight; 

 Miny = Status("axisminy"); 
 Maxy = Status("axismaxy"); 

 pxchartbottom = Status("pxchartbottom"); 
 pxchartheight = Status("pxchartheight"); 

 return pxchartbottom - floor( 0.5 + ( Value - Miny ) * pxchartheight/ ( Maxy - Miny ) ); 
} 

GfxSetOverlayMode(1); 
GfxSelectSolidBrush( colorOrange ); 
GfxSelectPen( colorOrange,1, 0 ); 

AllVisibleBars = GetVisibleBarCount(); 
fvb = Status("firstvisiblebar"); 

RequestTimedRefresh(1); // ensure 1 sec refresh


endPiwota=  BarCount;
startPiwota=gettop(0);
dlugoscPiwota = BarsSince(startpiwota);
dp=LastValue(dlugoscPiwota);
BarWdth = GfxConvertBarWdthPixelX() ;

kolor1 = colorPlum;
for( i = 0; i < AllVisibleBars ; i++ ) 
{ 
 if (endpiwota[i+fvb])
   {
     dp=dlugoscPiwota[i+fvb];
     if ( i +fvb -dp > 0)
      {
     x2 = GfxConvertBarToPixelX( i ); 
       x1 = GfxConvertBarToPixelX( i-dp ); 
       y1 = GfxConvertValueToPixelY( H[ i +fvb -dp]); 
       y2 = GfxConvertValueToPixelY( L[ i +fvb -dp]); 

       GfxSelectSolidBrush( kolor1 );  GfxSelectPen( kolor1 ,1, 0 ); 
        GfxRectangle(x1-BarWdth/2 , y1, x2 +BarWdth/2 , y2); 
       }
   }  
} 

// exploracja
BUYINGSPIKE= Volume >= mnoznik * sredniaV;
SELLINGSPIKE= Volume >= mnoznik * sredniaV;

buysignal = C > Ref(RF1,-1) AND vol; 
sellsignal = C < Ref(RF2,-1) AND vol; 

Filter  = buysignal OR sellsignal;
AddColumn(V,"Volume", 1);
AddColumn(sredniaV,"30bar Avg Volume", 1);
//VStatus= WriteIf(BUYINGSPIKE,"UPMOVE SPIKE", WriteIf(SELLINGSPIKE,"DOWNMOVE SPIKE", "  "));
//VColor= IIf(BUYINGSPIKE, colorBRIGHTGreen, IIf(SELLINGSPIKE, colorLightOrange, colorPaleTurquoise));
//AddTextColumn(VStatus,"VOLUME SPIKE",1,colorDarkBlue,VColor);
AddColumn (L, "Low", 1.2);
AddColumn (H, "High", 1.2);

signalStatus= WriteIf(buysignal,"UPMOVE SPIKE", WriteIf(sellsignal,"DOWNMOVE SPIKE", "  "));
signalColor= IIf(buysignal, colorBRIGHTGreen, IIf(sellsignal, colorLightOrange, colorPaleTurquoise));
AddTextColumn(signalStatus,"VOLUME SPIKE",1,colorDarkBlue,signalColor);

_SECTION_END();


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