Firewalker's Journey: A path of discovery in search for enlightenment

This is a discussion on Firewalker's Journey: A path of discovery in search for enlightenment within the Trading Journals forums, part of the Reception category; It is easy to get mixed up with this Volume analysis when viewing different timeframe charts. It is a fractal ...

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Old Aug 3, 2006, 1:49pm   #57
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It is easy to get mixed up with this Volume analysis when viewing different timeframe charts.
It is a fractal effect, and a retracement on say 60min or 120min would appear as a major weakness or reversal on 3min/5min chart. ie. you will observe a down trend with reverse retracement containing No Demand bars i.e selling opportunities, and vice versa

Also terms like high vol, low vol, weakness, strength are relative, best not to dwell on absolute number and then try to transpose those figues from one timeframe to the other. The signals based on Price/Volume or Volume Spread Analysis appear in varying intensities.

You take your cue from the higher time frame and then consider entry from a lower time frame.
eg. when that bozo appeared on the 60min chart, you did not have the hindsight luxury of viewing the retracement on low vol.

At that point you drop down to lower time frames and work from there.

When we see peaks in Volume it is evidence of potential resistance to the prevailing trend, we can never know whether the market will go up or down, it all depends on the strength of the buying and selling forces at the time.

By the way professionals not only look at price actions a few weeks back, some go months and even years.
All I can suggest here is to post your own chart preferably one time frame say 5min and the other 60min for observing longer term trend, and identify your own setups to go long or short which should be from the 5min chart, then we can have a look, otherwise it would lead to real confusion if we all keep pasting different charts

Perhaps Db might have something to add
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Old Aug 3, 2006, 1:52pm   #58
 
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Originally Posted by firewalker99
I'm not sure if I'm following though. You said I should look for points where price interacts more than usual. Then for me this means look at volume and see if it increases, decreases are stays the same for a couple of bars. It also means check if bars are small or widespread, are the wicks long, small in comparison to the bodies and how frequently that point is being passed from the down- or upside.

From my point of view, I'm not seeing a hinge at all, I see an uptrend perhaps at best. Because the lows are higher each time, and the highs keep reaching higher (green line). If they're are so many ways of interpreting a chart, how can I possibly develop an entry strategy if I'm at a loss to distinguish is price is trending up, ranging between S/R or something else?
As you say, for you this means including volume, which I've suggested you set aside for the time being. You're also examining the bars at a microscopic level, attaching far too much importance to any given bar. You're focusing on the trees, not the forest.

As for the hinge, it is drawn according to the action as of October '05. The fact that price breaks out of it in November does not alter its potential importance.

As for how you're going to learn all of this, I've suggested that you not examine so much all at once. And as far as the hinge example goes, I didn't introduce it; you asked about it. If you can't focus on only one or two things at a time, preferably only one, you're going to become frustrated to the point where you abandon the entire effort.

So, again, if you want to learn S/R, set aside volume and any diagonal lines for now. Learn to read charts left to right. Start, if you lke, with the chart I posted to the S/R thread.

Db
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Old Aug 3, 2006, 2:10pm   #59
 
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Originally Posted by firewalker99
I don't know if I can find two charts that look more the same than that...

You said I'm perhaps looking at too many things, so I took volume out of the equation but left it on the chart.
They may look the same, but one of them covers several weeks. The other covers two or three hours. Plus you don't include the context for the second chart, making interpretation somewhat meaningless.

We seem not to be communicating on the volume thing. You're not removing it at all, you're just holding it behind your back. But, it's your journal, and it really isn't my place to tell you how to proceed.

Db
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Old Aug 3, 2006, 2:10pm   #60
 
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Quote:
Originally Posted by SIMA
Wonder who or what basis somebody decided to stick that Rookie label against my name)

Anyway Firewalker if you are really struggling with this Volume business, best to have a look at Pattern Based trading and then gradually incorporate volume analysis later on. Try http://www.rsofhouston.com/
It takes time for this click in place but if you persist , it will be worth it.
Yeah, rookie would be more suitable for me considering my (lack of) progress.
Anyway, keep posting some more

as for the link, I'm being a bit skeptic as the state you can be "making big money in one month from now" and statements in the likes of "Become a Successful Trader – This Will Be The Last Trading Course You'll Ever Need!" I don't think the learning process ever stops...
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Old Aug 3, 2006, 2:14pm   #61
 
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Quote:
Originally Posted by dbphoenix
They may look the same, but one of them covers several weeks. The other covers two or three hours. Plus you don't include the context for the second chart, making interpretation somewhat meaningless.

We seem not to be communicating on the volume thing. You're not removing it at all, you're just holding it behind your back. But, it's your journal, and it really isn't my place to tell you how to proceed.

Db
Indeed they are of a different time frame, but similar patterns occur at whatever timeframe as markets behave in fractal ways? What do you want me to include with the second chart? By context do you mean the day before or...

I appreciate the suggestions and I've been discussing the chart with SIMA hence the volume references. I'm just seeing totally different things. I guess SIMA has a point, but I guess I have several points to in my analysis which makes is next to impossible to have a valid conclusion. I bet a 3rd or 4th person would see other things so this leaves me in the dark.
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Old Aug 3, 2006, 2:21pm   #62
 
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Originally Posted by firewalker99
Indeed they are of a different time frame, but similar patterns occur at whatever timeframe as markets behave in fractal ways?
What makes you say that markets behave in fractal ways?

Db
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Old Aug 3, 2006, 2:26pm   #63
 
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Quote:
Originally Posted by dbphoenix
What makes you say that markets behave in fractal ways?

Db
Ehm, well mainly because the same principles and patterns occur at different time frames.
For me it's like when you see for example the coast line from the sky: it's not straight but goes swirling around looking at it from without let's say a helicopter. As is the same when you look at it standing 100 meters from it.

The concept is also mentioned in several books.
Anyway, apart from my beliefs in don't know how this relates to my lack of understanding?
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