Volume tells all

[SOCRATES]

"Require" is your word, Charlton. I'm merely pointing out that one is not required to engage in the sort of analysis you say is required in order to understand the relationship between price and trading activity. You may call it pedantry if you like, but that doesn't make it any less true.

Relax.

What are you saying now, db phoenix for the goodness sake ?

Are you implying that analysys of a given situation is not necessary to properly arrive at a conclusion ?

Or are you guessing at the category of analysis that Charlton mentions in passing but does not, or chooses not to describe for whatever reason ? Are you hoping he will reveal it to you ?

Or do you mean it is not necessary to analyse or properly consider at all, andf just blunder in ?

Which one is it then ?

 

[pttrader]

You are being pedantic again. I don't "require" you or anyone else to do anything.

Frankly I am getting fed up with you trailing myself and others dishing out your pendantry, such that we all have to watch every single word or nuance just in case you decide to jump on the band-wagon.

Charlton

Well..well you told him! I thought this would shush ole legendary db up for a while but i see he immediately responded back.

 

[pttrader]

And, yes, a bar is a representation of what has happened over time. But traders don't trade time; they trade price. Using bars based on time intervals is an elective, not a required.

Sorry db..they don't trade price they actually trade contracts/shares.

 

[SOCRATES]

If one is "required", as you say, to look at the spread of the bar and the close of the bar and the height of the bar, it can be assumed that one is doing so in order to make some sort of trading decision.

And, yes, a bar is a representation of what has happened over time. But traders don't trade time; they trade price. Using bars based on time intervals is an elective, not a required.

Ah !...And by the way, what they are doing is reading the bars, one by one as the market action unfolds, that is what they are doing...in case you don't know what is done with bars....And with the volume...the same.

I hope this is helpful to you.

 

[dbphoenix]

Sorry db..they don't trade price they actually trade contracts/shares.

True. As I said in my initial post, in response to Charlton's contention that one is required to look "at the spread of the bar and also where the close lies within the bar":

What matters is the relationship of price movement to the changes in buying and selling pressure. This has nothing to do with "bars". Traders don't trade bars. Or ticks. They trade price. And they do it by trading shares, or contracts. How one chooses to display their transactions is entirely up to the trader, but price couldn't care less.

Price and trading activity move in waves. Segmenting the activity into bars misrepresents the nature of the relationship between the two.

 

[SOCRATES]

Price and trading activity move in waves. Segmenting the activity into bars misrepresents the nature of the relationship between the two.

I do not agree with you. You are trying to misdirect the discussion.

The ability to read the market bar by bar is a skill, and an art form if you like, but not a dogma.

 

[Charlton]

Wave - In french "Vague"

True. As I said in my initial post, in response to Charlton's contention that one is required to look "at the spread of the bar and also where the close lies within the bar":



Price and trading activity move in waves. Segmenting the activity into bars misrepresents the nature of the relationship between the two.

Actually price and trading activity is the result of millions of individual trading transactions. These are not waves although they may look like waves from a distance. Your wave is an approximation or convenient way of displaying or looking at the individual transactions just as bars are. In fact a bar is truer because it shows the opening price of the first transaction in the period covered by the bar, the closing price of the last transaction and the volume of, say, shares trading during the period covered by the bar.

What is this so-called wave - unless it is waving good-bye to cash !

Charlton

 

[dbphoenix]

Actually price and trading activity is the result of millions of individual trading transactions. These are not waves although they may look like waves from a distance. Your wave is an approximation or convenient way of displaying or looking at the individual transactions just as bars are. In fact a bar is truer because it shows the opening price of the first transaction in the period covered by the bar, the closing price of the last transaction and the volume of, say, shares trading during the period covered by the bar.

What is this so-called wave - unless it is waving good-bye to cash !

Charlton

Whatever bar you choose is a convenience for you. It has no inherent meaning beyond itself.

But if bars work for you, that's fine.

 

[Charlton]

What is your definition of a wave

Whatever bar you choose is a convenience for you. It has no inherent meaning beyond itself.

But if bars work for you, that's fine.

On the contrary it has a very precise meaning. It is a series of transactions during a precise period of time. It is not just a convenience for me but for many traders. I should add of course that I do not look at just one bar.

What is a wave ? You have not answered my previous question.

Charlton

 

[pttrader]

Price and trading activity move in waves. Segmenting the activity into bars misrepresents the nature of the relationship between the two.

I have no problem seeing the wave with bars. So, I see the waves plus the info the bars give which help to see IF a wave will keep on "waving" so to speak.

 

[dbphoenix]

I have no problem seeing the wave with bars. So, I see the waves plus the info the bars give which help to see IF a wave will keep on "waving" so to speak.

And, again, if bars work for you, fine. However, going back to Charlton's original post, one is not "required" to look at the spread of the bar, where the close lies within the bar, or even to use bars at all. Or charts, for that matter.

 

[Charlton]

Is this the Holy Grail ?

I have no problem seeing the wave with bars. So, I see the waves plus the info the bars give which help to see IF a wave will keep on "waving" so to speak.

Precisely, but just in case Db is having difficulty defining his wave, let me help. To trade a "wave" must first require (if I may use that word) seeing it in some way. One of the best ways to see it that I know is to plot it. Db might care to differ. How would you go about plotting a wave. Well you need 2 axes - one, I assume, would be time and the other, I assume, would be price. Db correct me if I am wrong (in your eyes) as I am sure you would. Hmm - problem what would you actually plot on the price axis ? Well the most granular would be the tick - the price of each individual trade, but Db doesn't like ticks !! He said so earlier. Perhaps he thinks that each stockmarket transaction is a bit of a wave. Maybe the transaction between you and me is not a fixed thing after all. Maybe the volume of shares traded between you and me is not a fixed thing after all. Perhaps it waves around in the 5th dimension - wow, is this the Holy Grail !!

I think not - I think you can plot trades (price and volume). Furthermore, if you wish to summarise at higher levels you may do so also and hence plot waves based on minute prices, 30 minute prices or 1 day prices. Alternatively if you don't like waves (may I call them line charts ?) you could choose bar charts. Or if you want both, maybe you could add in an MA.

Charlton

 

[pttrader]

And, again, if bars work for you, fine. However, going back to Charlton's original post, one is not "required" to look at the spread of the bar, where the close lies within the bar, or even to use bars at all. Or charts, for that matter.

Sorry Db but IT IS REQUIRED. I repeat: One MUST look at bar charts to trade.

Providing:
If you are going to trade the way he does..i do..many do..

 

[SOCRATES]

Sorry Db but IT IS REQUIRED. I repeat: One MUST look at bar charts to trade.

Providing:
If you are going to trade the way he does..i do..many do..

Yes, exactly. And I agree with you wholeheartedly.

And this is notwithstanding the order of preference.

Some of us use the bars for reference purposes as to the progression of market action.

Others use the bars themselves to derive up to date progressive information on market action.

So there are two schools of thought on this.

In the end analysis we all look at the bars.

The waves are something we float on when we go sailing.

 

[rols]

Yes, exactly. And I agree with you wholeheartedly.

And this is notwithstanding the order of preference.

Some of us use the bars for reference purposes as to the progression of market action.

Others use the bars themselves to derive up to date progressive information on market action.

So there are two schools of thought on this.

In the end analysis we all look at the bars.

The waves are something we float on when we go sailing.

....not waving but drowning perhaps? :cheesy:

 

[Charlton]

Call for the life-guards

....not waving but drowning perhaps? :cheesy:

Has anyone got a lifebelt to throw out to those who are bobbing up and down in the waves. They need something to cling onto

 

[firewalker99]

Sorry Db but IT IS REQUIRED. I repeat: One MUST look at bar charts to trade.

Providing:
If you are going to trade the way he does..i do..many do..

Hi pttrader, have to disagree with you on that one.

I pay no attention whatsoever to where the bars open, close. I used to do however, I just happened to find something that works fine without. Whether the bars are wide spread, doji, shooting star or hammer don't matter to me at all. Ofcourse I still use bars (or candlesticks) as a means of representing price on a chart, but I've been looking at line charts also occassionaly. The information in it is just the same, it's just another means of representation.

Perhaps there is much more to find in looking at bars - actually I'm positive a lot of people find very useful information in it looking for what the professionals are doing - I just haven't managed to do so. In the beginning of my trading efforts I studied VSA, but (probably because my time frame was too short) I kept putting me on the wrong foot. In my (not so experienced) opinion, there are many ways to trade and whichever one wishes to call it (wave, line, bar, candle, channel,...) doesn't matter.

I'd count myself to those that "use the bars for reference purposes as to the progression of market action" like Socrates so eloquently puts it. For the record: I agree most of us need to look at bars or candles and obviously I'm doing it also.

 

[pttrader]

Hi pttrader, have to disagree with you on that one.

Notice I said IF you trade the way he does..I do..many do. That is: The way I trade I MUST have bar charts. I was not saying one HAS to have bar charts to trade. Actually the only thing you have to have is money, account, tel, and a broker. You don't HAVE to have bar charts or line charts...candles..However, if you trade the way I do and the way i think Char trades then you must have bar charts. That is all I am saying. Actually I was messing with db but he didn't go for it.

 

[SOCRATES]

Notice I said IF you trade the way he does..I do..many do. That is: The way I trade I MUST have bar charts. I was not saying one HAS to have bar charts to trade. Actually the only thing you have to have is money, account, tel, and a broker. You don't HAVE to have bar charts or line charts...candles..However, if you trade the way I do and the way i think Char trades then you must have bar charts. That is all I am saying. Actually I was messing with db but he didn't go for it.

That is absolutely correct.

He has suddenly gone very quiet hasn't he ?

I think we may have all served to unintentionally hurt his feelings.

Come back db....all is forgiven.:cheesy:

 

[Charlton]

You have an open and practical approach

Perhaps there is much more to find in looking at bars - actually I'm positive a lot of people find very useful information in it looking for what the professionals are doing - I just haven't managed to do so. In the beginning of my trading efforts I studied VSA, but (probably because my time frame was too short) I kept putting me on the wrong foot..

FW

It's not easy to take volume into account as well. When you combine price and volume analysis you clearly increase the number of combinations of analytical "patterns" (please note patterns is used loosely). In additon the combinations have to (have to here meaning in the context of what I am talking about rather than infering that there is any obligation for the reader to do this) be looked at in the context of other parts of the chart.

Clearly you have made a success without using volume and without using all the attributes of a bar. Later you may or may not decide to examine these - that is up to you. In a thread entitled Price and Volume if I discuss what is "required" then it is in the context of that thread. This is no different to me posting in an indicators thread (I do not use them myself) and saying that this is the way that the RSI should be used. It doesn't mean that you and I must use them. It merely means that if you happen to choose to use RSI then this is the way to use it.

I will end this message with one final thought - why is volume data difficult to obtain in some situations. Why do you have to pay for Level II, when level 1 is generally free. There are certain datasets that professionals prefer you do not see. Why ?

Charlton