Australian (ASX) Stock Market Forum

Volume good, bad gut feeling (technical)

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highlowlowhigh said:
plan is to make 5% a week (sounds like a newbie plan hey?)

MM is ummm...i need to read more about that too..i just started trading on Monday :)

im reading you website now...perhaps i might learn a thing or two, thanks !
Click to expand...

So thats 260% a year, started trading on Monday, and no MM.

Good luck with that ;)

Use fake money first mate, trust me.
 
highlowlowhigh said:
plan is to make 5% a week (sounds like a newbie plan hey?)
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Mate, I'm a complete newbie and even I can recognise that you have no idea what you're doing.

My gut instinct would tell me that if the volume is going up and the price is going down, that just means that the stock is **** and there are lots of people selling it.

I'd stop trading real money if I were you. You said that you've been trading on paper for a while. How did that work out for you???
 
highlowlowhigh said:
oh no im not asking for financial advise...

dun laugh pls i think im gonna ask a silly question.

but...what things about a share would stop it from increasing in price when buy pressure is higher than sell ?

is this the resistance level ? if it is...doesn't resistant level slow down in demand as it reaches it, then the volume flips ? is it always the case ?

cos right now im really baffled..all the signs are there..and im just trying to understand and write down in my trading log where i went wrong. technically i tried to follow...even to the stochastics..(stochastics was on the higher end...but still not overbought)
Click to expand...

Highlow - In regards to your volume question there are many things that can create the circumstances you describe. Here is an example...

Lets say you are an institutional buyer (or Seller) and you have a large amount of volume to fill. Enough volume that your order alone will move the price action.

Do you a) Make your trade visible to the market and put all your volume on at once, or
b) Hide your volume and have an operator work the order in small lots over a few days or weeks?

Welcome to hidden volume - every broking house around the world does it.

Stochastic oscillators... know how they work? They essentially take the price action and compress all values between a 1-100 range. The indicator therefore cannot go above 100. The price action of the share however is not similarly limited, there are no artificial mathmatical fetters on the price action.

The upshot of this is that a stochastic oscillator will quite frequently give you false selling signals, and will also quite frequently give you incorrect signals to "overbought" shares. The same is not true however on the "oversold" side of the scale. As a rule of thumb, you should never use a stochastic for an selling signal, only to confirm a buy signal indicated by the price action.

Hope that's helpful.

Cheers

Sir O
 
Some very poor responses from some posters i thought better of in this thread.

Sure the guy has no idea but he has admitted that and is asking for some help in the beginners forum, how about at least helping a little or leaving the smart ass stuff out.

When it comes to the market depth and the amount of buy and sell orders listed my advice is for you to try and disgregard that information as it is only those that are in the queue and isn't a reliable guide.

MM stands for Money Management and is a project for you to go away and learn a bit about now as it is very important.
 
Unnamed User said:
Some very poor responses from some posters i thought better of in this thread.

Sure the guy has no idea but he has admitted that and is asking for some help in the beginners forum, how about at least helping a little or leaving the smart ass stuff out.
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Very strongly agreed there.

The vast majority of the population does not have significant knowledge in any given technical field be it medical, engineering, financial markets, mechanics or whatever. It may well seem a simple question to you, but to the majority of the population it's a complete mystery.

As I'm sitting here right now, I am also logged into another forum unrelated to investment / trading where someone is somewhat worried about their TV and fridge going off when they turn a tap on. Now, working that one out is something I can do because I have the required knowledge but to most people it would be a complete mystery. It may well be obvious to me what's wrong, but it sure isn't to the person asking - that's why they've asked on a public forum to find out what's going on.

Manners... :2twocents
 
Unnamed User said:
Some very poor responses from some posters i thought better of in this thread.
Click to expand...

Smurf1976 said:
Very strongly agreed there.
Click to expand...

Guys there is a difference to the situation where someone is asking about something such as an electrical problem. That is a problem that can occur during ones normal activity.

Then there are other problems like for example, "Guys, high I'm not very experienced, I hadn't even got my license yet but I just bought a new 750cc motorbike and went for a ride without a helmet at 150K/h. I just smashed into a tree. Whats wrong with the motorbike?" :eek:

One problem has nothing to do with stupidity the other is almost the definition of it. Thus the replies one receives.

They are two extreme examples just as...... well examples. :D
 
Just to add to my above comment. There is also a fair amount of annoyance with the punters who are in effect running into the casino blinded by the chance to win big while ignoring the downside. And even being completely unprepared for it.

highlowlowhigh I'm not having a direct shot at you just stating that sometimes the replies some get are a result of their actions - to some degree. :)
 
Smurf1976 said:
Very strongly agreed there.
It may well be obvious to me what's wrong, but it sure isn't to the person asking - that's why they've asked on a public forum to find out what's going on.

Manners... :2twocents
Click to expand...

Yes I agree with this 110% and a polite explanation, patience and respect of the poster is the preferred way to go. If someone thinks the question is stupid or naive then simple ....

Don't friggin respond. :mad:

Although as Trembling Hand noted, there are few occasions when posters are deliberately being stupid to attract attention or peeve others but best ignore those silly posts.

Here's to respecting everyone no matter what stage they are at. ;)
 
Smurf1976 said:
someone is somewhat worried about their TV and fridge going off when they turn a tap on.
Click to expand...

I know I am off topic but this sounds like an interesting question. What makes the TV and fridge turn off when a tap gets turned on??????
 
I don't understand why nobody wants to help this fellow? Anyway ill try and have a go.

1. Planning to make 5% a week, is not a plan. The plan is HOW

What will you do to get you to that? What strategies will you employ, and what money management techniques will you employ?

2. Learn about the insturments you trade. How they relate to the price/time/volume. How they interlate. (something im still trying to perfect).

3. DONT USE REAL MONEY YET. Papertrading or using a demo for a week and making fantastic profits, does not mean you can go straight out and translate that into real profits. Demo or paper trade over 6 months. Then see how much money u make.

4. Read this book, its a fantastic starting place. The best Money management book ive read when i was beginning. Its by Nick Radge, and its called adaptive analysis. Go and get it.

5. Dont expect to be making consistent money anytime soon. Could take you years.
 
lukeaye said:
I don't understand why nobody wants to help this fellow? Anyway ill try and have a go.
Click to expand...
:confused:

lukeaye said:
1. Planning to make 5% a week, is not a plan. The plan is HOW

What will you do to get you to that? What strategies will you employ, and what money management techniques will you employ?
Click to expand...

Thats not really even the start of a plan. Or if it is its a good trap. You haven't listed the most important thing. What test to prove your plan is possible/realistic/survivable.
 
High volume with little movement in the direction of the volume (buying or selling)
Can be interpreted as absorbtion of Sellers OR Buyers as the case maybe.
An instrument will not continue to move in a direction until the absorbsion of one exceeds the other.There needs to be in balance in percieved value for price to move.

You will note volume drying up and range increasing once absorbtion is complete.

If you have a more than cursory interest in volume then a read of VSA principals would be of interest.

http://www.tradeguider.com/education/mtm.aspx
 
$99US!!

C'mon Tech - give him the link to download the book for free.
 
highlowlowhigh said:
yes ! that's it ! well...that is one of my indicators. is that wrong ? i mean...if there are more guys wanting to buy than sell...there's a better chance the share price will trend upwards ? than when there are more sellers than buyers ?
Click to expand...

Market depth isn't a bad indicator to use, but it's not that accurate. For example, there may be more sellers and more selling volume, but it might not be at the current price. There may be a lot of sellers waiting for it to hit xxx level.

Also, look at candles and see if the bid has been hit. This would indicate some selling: the candle should be red.
 

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