Volume query

[tech/a]

As a newbie, I'd be appreciative of charts with explanations
Thanks

There are many many explanations with single or multiple bars/patterns within those explanations
I should put them up in the Learning T/A thread and crank that again.

I forget there are people like you watching and not commenting.
Ive been trading the DAX and thought about posting the odd chart.
Then I thought how long it takes and got the why bother's.

Then you posted.

Ill just pop up one tonight with this observation for those who want to include volume in their analysis.

(1) You are looking for EXTREME volume
(2) You are looking for EXTREMELY LOW volume.

Now you have to read it in context of the chart.
EXTREME volume and range throw the equilibrium out---this can happen in a single or number of bars.





Youll notice that extreme volume particularly on single bars with wide range will often see the next few bars correcting at a minimum. Often used by short term traders for counter plays.
This happens with a very high success rate and can often be short term before resumption of the move in the original direction of the initial volume.

So now notice the last 2 BLUE high volume bars.
Price reacts differently to the example shown.
Is supply coming in or is it likely to continue UP?

 

[tech/a]

So now notice the last 2 BLUE high volume bars.
Price reacts differently to the example shown.
Is supply coming in or is it likely to continue UP?

No Takers?

For price to reverse we need to see Supply swamping demand
and demand being withdrawn so that sellers have to accept lower
and lower prices.

What's volume and Range telling us on the bars after the 2 very high
volume bars?

Is it likely to continue up or reverse?

 

[kid hustlr]

no supply

up we go

 

[tech/a]

no supply

up we go

And as I know you know---so It does.

 

[kid hustlr]

can often be short term before resumption of the move in the original direction of the initial volume.

question is do u take the initial long given the above

 

[tech/a]

question is do u take the initial long given the above

It depends on a number of things

(1) The strength of the reversal
(2) The risk in the trade
(3) Where the reversal takes place IE a support or resistance area.

But if it looks like the one shown then it's a very good one.
I'll also check other timeframes ( that's a 3 min ) to see if it's reflected in that as well
Like a 9 min. It won't look the same but will tell me a lot about the longer term.
The low volume no supply bar is a great one to raise your stop to after it is confirmed as
This one was.

Often though you won't get a long reversal before it returns to the initial trend.
The low is often tested. It wasn't here. If it comes back at it on high volume and a down bar then it's likely to be taken out. Lower volume it's likely to hold and often tests the exact same low price.

 

[Muddy71]

There are many many explanations with single or multiple bars/patterns within those explanations
I should put them up in the Learning T/A thread and crank that again.

I forget there are people like you watching and not commenting.
Ive been trading the DAX and thought about posting the odd chart.
Then I thought how long it takes and got the why bother's.

Then you posted.

Ill just pop up one tonight with this observation for those who want to include volume in their analysis.

(1) You are looking for EXTREME volume
(2) You are looking for EXTREMELY LOW volume.

Now you have to read it in context of the chart.
EXTREME volume and range throw the equilibrium out---this can happen in a single or number of bars.

View attachment 59245

View attachment 59246

Youll notice that extreme volume particularly on single bars with wide range will often see the next few bars correcting at a minimum. Often used by short term traders for counter plays.
This happens with a very high success rate and can often be short term before resumption of the move in the original direction of the initial volume.

So now notice the last 2 BLUE high volume bars.
Price reacts differently to the example shown.
Is supply coming in or is it likely to continue UP?

Thanks Tech/a,

Appreciate the time you took to reply.

I'll try to work out how to post a pic of a chart and ask a few questions when I have a bit more time if that's ok.

Thanks again.

 

[tech/a]

Sure

 

[kid hustlr]

Often though you won't get a long reversal before it returns to the initial trend.
The low is often tested. It wasn't here. If it comes back at it on high volume and a down bar then it's likely to be taken out. Lower volume it's likely to hold and often tests the exact same low price.

Agree with everything said.

Also agree that waiting for a test is ideal and probably the safest option

but my experience tells me the test doesnt always come - and the ones where it doesn't are the ones you want to be long for.

 

[tech/a]

Agree with everything said.

Also agree that waiting for a test is ideal and probably the safest option

but my experience tells me the test doesnt always come - and the ones where it doesn't are the ones you want to be long for.

Yes totally agree.

Those are usually pretty clear in the effort expended to stop then reverse the trend.
The lack of supply ( long play ) or demand ( short play ) is often very clear.

 

[Muddy71]

Ok. Had a bit of a crack at volume on this chart and added some comments.
hopefully on the right track??

Anyway, given that the stock is trending up, I'd expect it to continue to do so given that the last high volume up bar is indicating that the buyers are back in control. I'd obviously wait for confirmation for a couple of days before entering.

I don't own this stock or any others for that matter, still trying to get my head around the T/A side of things (which will be awhile) before I look at entering the market.

Thanks in advance.

 

[Faramir]

Hi Muddy71
Tech/a is brilliant. Mind if I make a comment?
4th last bar - Selling Pressure, higher than average volume
3rd last bar - Buying Pressure, pushing price up, higher than average volume
2nd last bar - Very low volume, sellers seemed to have dried up
Last bar - Buying pressure, more buyers, not enough sellers available
Next bar? I think the sellers might come back so that they can profit from this buyer's pressure. Not sure if there will be enough to relieve the buying pressure? I am just guessing here.

PS: I am very much a beginner, I would get low marks in tech/a's class if I was one of his students. Might need to bring an apple to class.

 

[Faramir]

Reading "Master the Markets" - Confused
https://www.aussiestockforums.com/forums/showthread.php?t=28484

I tried answering some of the questions with nearly zero knowledge. Tech/a was very busy at that time but he still took time to post up questions and answer questions.

May not be relevant to this post but it is interesting.

 

[Muddy71]

Hi Muddy71
Tech/a is brilliant. Mind if I make a comment?
4th last bar - Selling Pressure, higher than average volume
3rd last bar - Buying Pressure, pushing price up, higher than average volume
2nd last bar - Very low volume, sellers seemed to have dried up
Last bar - Buying pressure, more buyers, not enough sellers available
Next bar? I think the sellers might come back so that they can profit from this buyer's pressure. Not sure if there will be enough to relieve the buying pressure? I am just guessing here.

PS: I am very much a beginner, I would get low marks in tech/a's class if I was one of his students. Might need to bring an apple to class.

Hi Faramir,

Not at all mate, the more the merrier!

Cheers

 

[tech/a]

My opinion of the chart

 

[tech/a]

Hi Muddy71
Tech/a is brilliant. Mind if I make a comment?
4th last bar - Selling Pressure, higher than average volume
3rd last bar - Buying Pressure, pushing price up, higher than average volume
2nd last bar - Very low volume, sellers seemed to have dried up
Last bar - Buying pressure, more buyers, not enough sellers available
Next bar? I think the sellers might come back so that they can profit from this buyer's pressure. Not sure if there will be enough to relieve the buying pressure? I am just guessing here.

PS: I am very much a beginner, I would get low marks in tech/a's class if I was one of his students. Might need to bring an apple to class.

You'd get an ' A ' as you at least had a go at reading it.

 

[rnr]

Marking up your chart with anticipated support and resistance is also a great help when analysing volume, especially when you scroll back to old areas of support and resistance not immediately obvious on the chart.

This is my take on potential resistance levels which are close to current price action for BBG.

 

[tech/a]

Ah BBG

That's bullish!

 

[tech/a]

RNR makes a very sound observation and its VERY important to consider what happens as price comes into resistance. Youll note in BBG's case that supply comes in as it races toward the resistance area. More about this chart later.

What I really wanted to show you was tonights DAX.

Firstly the 15 min chart and the remaining 3 min charts explaining the trade.

Click to expand any chart







I haven't drawn in the resistance areas but you can see it blew through one clearly
There is another off page. This is very clear volume and range patterns which shouldn't be ignored
1 contract and 35 min and I'm done for the night---more than happy!

 

[tech/a]

This is where we are now.
There is something of great interest here and guys like PAV/The Kid and other futures traders will know exactly what I mean.

Click to expand