The Basics of Trading

Hi Les and Chartman,

Thanks a lot for your interest. Les, I have done some backtracking on ES futures and am as mystified as ever! It does, as Chartman says, confirm, but that, to my way of thinking, is hindsight. It should work but, in my case, maybe I should leave it alone. The trouble is that I am always looking for an improvement to my trading and will keep going back to double check things.

One minute trading? Mmm! Five minute stuff is hairy enough for me! I have noticed that the volume peaks and rapidly falls away
but, as you say, which way do we trade? Not much of a clue there for me to see. Never mind, I'm still in the game after many years so I must be doing something right.

Regards Split

I find volume very useful as a confirming item : mainly for tops and bottoms.. or for indications of trend size:

I run a scan:
Volume = MAX(VOL,50)
or
Volume +Volume.1 >1.95*(MAX(VOL,50).
(which says volume in this bar is the highest of the last 50 or the volume in this and the last bar combined is > 97.5% of the high of the past 50 bars)

and show the result as a yellow triangle in the chart.....it clearly confirms the top in RS 3 min chart at 852.5 and 19.25pm and the low at 845.3 20.30-20.45pm

Mark,

No problem with the idea. I'm sure you would have covered it in due course.

Now to diverge into semantics rather than use 'stronger' why not change it to 'significant'. That is the more times S/R are tested the more significant they are when they fail. A failure is of special interest as at that point there is a significant change in the supply/demand balance and that will eventually happen. The more times they are tested the more likely they are to fail or everything would be forever rangebound.

Cheers,

Andrew

Volume is a wonderful indicator - yet one that very few people use. Take a look in any TA book and see how much is devoted to volume; very little indeed. There's more written about OBV (on balance volume) than on volume itself.

It does take a lot of practice to be able to 'read' volume, but when you can it is magical. As I trade just ES intraday, my knowledge of volume on EOD charts is limited, although theoretically you should be able to read it as you do on intraday charts.

Those volume bars tell a whole story, from the introduction to the end. It's like a book really, with events and set-ups before you get to the final chapter. If push came to shove I'm sure I could trade very profitably off just a volume chart, with no prices. However, volume does not show you direction; just the events unfolding as you make your way through the book.

Last year I used to trade ES off the 1 minute chart (I don't any more), and in a bull or bear trend it was fantastic to watch the volume predict the breakout of pennants and flag formations.

I used to watch the volume of contracts tick up and time them - at 15 seconds into the one minute bar just multiply the number of contracts x4 to give you an approximation for the end of the bar, and you'll have an idea if the volume for that bar is likely to be double or more of the previous bar. During pennants, flags and triangles on the one minute chart, volume literally dries up (all the traders are sitting out waiting for it to break out).

However, by timing the volume you can tell during the first 15 seconds of the one minute bar if it is going to be 'the' breakout bar. This indicates before the price, and 9 times out of 10 I could get in before the SB companies changed the bias.

RogerM

Thanks for the tip regarding TC2000. Is there a UK supplier for CD? or did you pay the shipping cost to get it?

Thanks

Nick

There is no UK supplier so you have to order it from the website or by calling them. I have been waiting 2 weeks now for it to arrive. I called them on Friday and they told me that it can take 10 business days.


Paul

Thanks Paul

Did you pay the shipping cost?

Nick

Got a mailshot today from something called Champion Trader.Has anybody read this or does anybody know anything about it.
I realise that the general consensus of opinion seems to be not to waste money on such things.
Any opinions appreciated