Volume tells all

exactly......... expectations..... from the markets and others.. maybe its best to expect nothing from them just manage yourself and your trading. They do what they do.....beyond your control, how will you manage that? that is worth chewing over maybe.

pttrader said:

To say that price preceeds volume is meaningless as the only price that means anything is the price where volume occurred. It is like the case of the chicken and egg. Which is first? That is not the point! It really doesn't matter which is first but what does matter is "how" the said price was made and volume my friend tells that story. So, it is really a technical thing to say volume is first or price is first what really matters is that a price transacted and did so with volume and that volume tells a story.

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By "volume" I assume you mean more than one trader taking the ask for one share. Of course there has to be "volume" in order for a transaction to take place. The transaction itself is "volume".

However, you misunderstand the nature of volume if you think that substantial volume has to occur in order for price to advance to a "meaningful" degree. And "how" the price was made is completely irrelevant.

But none of this is worth arguing about unless one knows whether or not the participants are full-time traders or recreational traders as each will have his own take on the subject. IOW, whatever floats your boat.

--Db

fxmarkets said:

exactly......... expectations..... from the markets and others.. maybe its best to expect nothing from them just manage yourself and your trading. They do what they do.....beyond your control, how will you manage that? that is worth chewing over maybe.

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I've read Trading in the Zone... chewed mulled integrated

Fader said:

Hey I'd settle for someone getting my joke

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I'm glad it was a joke. Looked like you were getting pretty wound up over a discussion on volume!

dbphoenix said:

By "volume" I assume you mean more than one trader taking the ask for one share. Of course there has to be "volume" in order for a transaction to take place. The transaction itself is "volume".

However, you misunderstand the nature of volume if you think that substantial volume has to occur in order for price to advance to a "meaningful" degree. And "how" the price was made is completely irrelevant.

But none of this is worth arguing about unless one knows whether or not the participants are full-time traders or recreational traders as each will have his own take on the subject. IOW, whatever floats your boat.

--Db

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Is volume important? If so, why? If not, why or why not? Does volume say anything about price? If it does is that important? If how price is made is not important then what is important? Nothing? Just buy in at any price? If there is no way to get a "view" on the market as to what it might do then why analize the market? Can price itself give you a view to forecast? Or is forecasting a useless thing? If so, what is the use of any kind of analysis? Including price analysis.

pttrader said:

Is volume important? If so, why? If not, why or why not? Does volume say anything about price? If it does is that important? If how price is made is not important then what is important? Nothing? Just buy in at any price? If there is no way to get a "view" on the market as to what it might do then why analize the market? Can price itself give you a view to forecast? Or is forecasting a useless thing? If so, what is the use of any kind of analysis? Including price analysis.

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Did you want that in 25 words or less?

If you are waiting for Volume to confirm you entry. lets say on 5 min charts This tells me you are late.

dbphoenix said:

Did you want that in 25 words or less?

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Yes, sounds good!

Fader said:

It's pretty simple, the price that something occurs at is far more important than how many deals got done... you dont buy hoping volume goes up... you buy hoping price goes up... people focus on what is most important to them, for traders it is price, price determines winners and losers, volume does not, it will never be as important as price... this isn't some kind of esoteric secret, the best traders in the world primarily use price/levels/pivots/supp/res with a bit of volume thrown in... so the thread title "Volume tells all" is simply rubbish!

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As far as I am concerned, I've been interested in price and volume for years but I have never fully understood the rationale used by volume expounders. As you say, there is always a reason for why a price up or down on lots, or little, volume. Because of that, I hardly ever look at volume in practice, although I feel that it must have a place, somewhere. I'm going to try to put Pttrader's explanation to work next week but have spent a lot of time today looking at shares and, frankly, it doesn't seem to work- not some of the time- but most of the time. I know that a lot of the shares in the FT100 index are going to move one way or the other next week but I suspect that volume activity will not show me much light on the matter.

Anyway, Pttrader, thanks for your time and trouble. If I have some good trades by using volume, I'll be sure to let you know.

Split

Going back to the original discussion, I have dabbled in volume spread analysis (I have TradeGuider) and found while the subject is deeply fascinating, it is far from easy to master. I have also found it quite difficult to translate it into a trading plan. For day traders I can see it why it can be very useful. For an EOD trader like myself, I tend to miss the big picture by doing a bar-by-bar analysis. If you are a day trader, bar-by-bar is exactly what you do.

This doesn't mean I have stopped trying. Hopefully one day I will be able to combine both the bar-by-bar VS analysis and the big picture into a viable trading plan. My current trading plan does not include VSA.

One main hurdle is the lack of information. The only sources of information are Tom Williams' book and TradeGuider manuals, neither is famous for being articulate. Very often you will find fuzzy definitions, patterns that are very similar (with no discernible differences) but have different names, and patterns that are in TradeGuider but not in Tom's book. Also TradeGuider support is not exactly earth-shattering, so if you are expecting an explanation for a pattern you didn't understand, that's just tough.

To master VSA, you really need a mentor who is a successful trader and uses VSA for a living.

Some people study a convoluted system until they are finally successful without realising all they have done is become an experienced trader that uses good money management, risk assessment and strong discipline, you cant tell these people that their system has very little to do with their success because most of it occurs at a subconscious level

OpenMind said:

One main hurdle is the lack of information. The only sources of information are Tom Williams' book and TradeGuider manuals, neither is famous for being articulate.

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I wouldn't say "only". All of this began with Richard Wyckoff, and the more of his stuff you read, the better. He didn't get all bound up with bars and PV bar pairs. Rather he focused on the context and on buying and selling pressures. Any given bar or bar pair, after all, is largely irrelevant. What matters is what comes before and after. Therefore, futzing with what this bar or that bar "means" is beside the point.

This may make more sense to you if you get rid of the bars and replace them with lines for a while. This will help distract your attention from when and where a particular bar "closes", or from what volume "bar" goes with what price "bar". Or it may be of no help at all. Worth a try, though.

--Db

Splitlink said:

As far as I am concerned, I've been interested in price and volume for years but I have never fully understood the rationale used by volume expounders. As you say, there is always a reason for why a price up or down on lots, or little, volume. Because of that, I hardly ever look at volume in practice, although I feel that it must have a place, somewhere. I'm going to try to put Pttrader's explanation to work next week but have spent a lot of time today looking at shares and, frankly, it doesn't seem to work- not some of the time- but most of the time. I know that a lot of the shares in the FT100 index are going to move one way or the other next week but I suspect that volume activity will not show me much light on the matter.

Anyway, Pttrader, thanks for your time and trouble. If I have some good trades by using volume, I'll be sure to let you know.

Split

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Split
Your welcome

split,

Have you traded only price?

These would likely be easier to remember if someone were to explain why they are true (if they are).

--Db

dbphoenix said:

These would likely be easier to remember if someone were to explain why they are true (if they are).

--Db

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Maybe I will do that. In the meantime if you want to explain why they are true or not true from your perspective I would welcome that.

Remembering them is not difficult. I am going to give them a try.

Regards Split

You said it! You guys certainly like to make life difficult! What is it- intellectuality?

Split

chump said:

Fader,
Incongruity ....the reason your attempt at humour passed without recognition is it lacked the above. There was nothing in it that would have alerted the reader that you were anything other than serious.

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It was not an "attempt" at humour, it was perfectly executed comedy gold, stop making excuses for the dull witted... and speaking of dull witted, your insight into volume was breathtakingly superficial

Remembering is not the same thing as understanding. A great many beginners employ rules they don't understand, which is one reason why their results are so patchy, and why they so often insist that what they're studying "doesn't work" and "has no value".

The "bar" is a purely artificial construct. Why, for example, does it matter whether or not price "closes" in the middle (or above or below) the "bar"? Are traders worldwide alerting each other that your bar is about to close, prompting them to postpone their trades for a few seconds in order to throw you off?

The impulse of the novice is to find rules to follow. The impulse of the professional is to achieve understanding. The "rules" are nothing more than a convenience.

--Db