Day Trading and Your Life.

DionysusToast

Legendary member
5,963 1,498
toastie

I must admit that volume is not relevant to me (probably because I've never been able to make head nor tail of it :() but aren't you comparing apples to pears here?

You have shown volume to price whereas malas seems to be talking about volume to time. It's no surprise that volume was highest at your a and c because that's where the price sat most of the time.

If his observations have validity then I guess he would be looking for high volume on the first of the three long down bars that took price from a to b.

good trading

jon
Actually Jon - he hasn't said anything yet with the exception of an analogy about gasoline and volume.

Now - of course I showed volume to price - how else to show most volume occured at choppy areas and thin volume is what caused the larger moves.

Lack of liquidity can cause large moves and lots of volume can cause a market to churn. Of course, this is not as attractive as "volume is the gas that powers the markets".

I just showed a couple of cases where it is clear that volume does not equal price moves. Citibank has tons of insitutional volume but moves nowhere.

Perhaps the OP will flesh out his argument, or perhaps he will continue with fluff and not get down to the nitty gritty, in which case, he's shurely another 'Expert' :whistling
 
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Splitlink

Legendary member
10,850 1,231
Hello! I'm a new one here. I use volume as my trading strategy and just want to poin out that it is always necessary to wait when big boys accumulate a big amount of volume. They never lose their money.
I doubt whether volume is correct enough to be reliable for intraday trading. Maybe
EOD, but I'm not sure of that either. However, since I don't trade long term, that doesn't concern me. The "big boys" are, normally, too fast, I must be in before them. Getting in afterwards is too late.

I believe that everything depends on direction and entry price depends on being overbought or oversold relative to that direction.

Getting the direction correct is not easy and I am , like many others , often wrong, but that is what it is all about.

Volume is a confusing issue for me. The market can go up on low volume, down on low volume, up on high volume, down on low volume. Good luck to anyone who understands it!.
 

DionysusToast

Legendary member
5,963 1,498
Volume is a confusing issue for me. The market can go up on low volume, down on low volume, up on high volume, down on low volume. Good luck to anyone who understands it!.
The market has 2 sides - buyers and sellers.

When a large number of buyers and a large number of sellers both think it's wise to trade at around about the same price level, you will see volume but you won't see much of a move.

If any amount of buyers exist at a price level but less sellers, then some buyers will get filled against those eager sellers and some will not. Those unlucky buyers that didn't get filled will either walk away or up their offer to trade with other sellers wanting higher prices. If this is a considerable distance and buyers are still keen, then some of those eager sellers may become buyers too as they cover.

If we consider volume and price move here, then theres a few factors:
- how many buyers are there (or how many shares/contracts do they want to buy?)
- at what point will buyers start to become sellers?
- at what point will sellers start to become buyers?
- where is the selling interest above?

If there is considerable selling interest 15c above the current level, then the chances of price moving through that simply depend on the conviction of the buyers and sellers.

For sure, it is not as simple as looking at volume, which is why I showed a volume profile which surely shows where those areas of balance were on prior days.
 
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malaspina

Active member
114 1
Hello,

Thanks for all the responds to my post. I would like to help you understand what I see in volume. I ONLY trade the emini nasdaq-100 Index Future (NQ), the active contract right now is the NQZ0. Would you like that I post a chart so I can explain better the volume and price topic.?

Please let me know.
 

malaspina

Active member
114 1
By the way, Mr. DionysusToast "Legendary Member", I am just trying to help the community, I hope with my ideas you could also improve your trading. Please feel free to ask me, I surely will help you in anyway I can.
 

Gogol

Junior member
32 0
Congestion Areas In Trend Trading.

In day trading there is no point to try to guess where the market will go next, it is impossible. Of course, you can try it but I bet you will blow out your account in no time. But there is a way that can give you an edge, that is waiting. Yes, you have to wait for the market to speak to you. usually when the trend is in place and you see a short pullback you can notice that there are price bars going up and down in a small narrow range (a congestion area), once a price bar closes over (for longs) or down (for shorts) the whole congestion area with high volume it is a sign that price will resume trend direction, you must act quickly and take your position. This is not 100% bulletproof but it has worked for me to reduce risk in my trades.
Hi,
Do you use accumulated volume at each price increment to determine high volume ? Or just watch it on the chart? If on chart what TF (ticks, vol, min.) do you look at?
 

malaspina

Active member
114 1
Hi,
Do you use accumulated volume at each price increment to determine high volume ? Or just watch it on the chart? If on chart what TF (ticks, vol, min.) do you look at?
Hello Gogol,

First, I only day trade the emini nasdaq 100 everyday, so, in someway I have learned how the volume behave daily in this contract, I know what low and high volume is depending on what I see on the charts. I day trade using two time frames, 5 min and 10 min, I look at volume bars in each time frame. If the market is going too fast I use my 5 min time frame and I base my volume observations on that 5 min time frame, if the market is moving slower I do the same volume observations in the 10 min time frame.

I hope this answers your question. I am glad to help.

Regards.
 

Gogol

Junior member
32 0
Hello Gogol,

First, I only day trade the emini nasdaq 100 everyday, so, in someway I have learned how the volume behave daily in this contract, I know what low and high volume is depending on what I see on the charts. I day trade using two time frames, 5 min and 10 min, I look at volume bars in each time frame. If the market is going too fast I use my 5 min time frame and I base my volume observations on that 5 min time frame, if the market is moving slower I do the same volume observations in the 10 min time frame.

I hope this answers your question. I am glad to help.

Regards.
(y)
 

EmotionIsTheBigEvel

Junior member
37 0
I saw the reactions on my question but still I don't have a clue in what way I can have an advantage in my trading descision if I should buy a contract or not looking at volume!

The point is, after the time period, 10 minutes for example I can conclude that there was a lot of volume the last 10 minutes and yes it moved the price during those minutes but I am still not in the trade at this moment! And at this moment, should I still enter a trade at this point? My method will decide what to do, but I have no clue how to incorporate volume! I often hear people say that volume is important but I haven't met anyone who can make it clear that you have an advantage using volume??

So if you can give an example, please!

Regards
 

malaspina

Active member
114 1
I saw the reactions on my question but still I don't have a clue in what way I can have an advantage in my trading descision if I should buy a contract or not looking at volume!

The point is, after the time period, 10 minutes for example I can conclude that there was a lot of volume the last 10 minutes and yes it moved the price during those minutes but I am still not in the trade at this moment! And at this moment, should I still enter a trade at this point? My method will decide what to do, but I have no clue how to incorporate volume! I often hear people say that volume is important but I haven't met anyone who can make it clear that you have an advantage using volume??

So if you can give an example, please!

Regards
Hello EmotionIsTheBigEvel,

I will answer your question in two parts, here you have PART 1, as soon as I get back home I will post PART 2. Part 1 was taken from my homepage (my blog).

PART 1: There are many ways to trade the markets, as I have said before my style is trend trading. From my point of view, it is vital that you can see where the trend is going and where the price has been and how it is behaving at the current time, based on that observation you can have an idea of the price structure. This overview of price behavior can give you a clue where the market will go from an specific price in time if something that is expected happens, once you have green light from the market you have to take the trade. My point is; “Price must be seen as a whole”, this is what I call “PRICE STRUCTURE”, this is a powerful concept in trading, once you get to understand this concept, you will be more selective in taking your trades, you will win more and lose less.

Again, I will post PART 2 shortly (including the volume topic and example chart ).

Take care.
 

malaspina

Active member
114 1
Problem with trend trading is you only know after the event there was a trend.
Hello trading100,

I know this is not easy. But there is a way, it takes time and effort, you must learn about price structure and volume. This gives you an edge to get in the market in the first stages of a trend, the goal is to ride just a part of a trend (the middle), it is impossible to call bottoms and tops. Of course, you won’t be 100% accurate always but in time you will lose less and win more.
 

EmotionIsTheBigEvel

Junior member
37 0
Hi Malaspina,

Good to read your posts! I am always looking to improve my skills. And while I hear folks speak over volume all the time, I can't make anything out of it. So I'm looking forward to your posts! Keep 'm going :)
 

malaspina

Active member
114 1
Hi Malaspina,

Good to read your posts! I am always looking to improve my skills. And while I hear folks speak over volume all the time, I can't make anything out of it. So I'm looking forward to your posts! Keep 'm going :)
Hello EmotionIsTheBigEvel,

Thanks for getting back to me, I am glad to help. You can also find some of my posts in my home page.

Ok, here is the PART 2 of my previous post to try to answer your question. It is all explained in the chart, it is not easy to make it all clear in one post but I tried my best to help you.

I trade with thinkorswim platform and I only day trade the emini nasdaq-100 index future. I use 10 min time frame to spot trends (I also use it during slow market movements), and I use 5 min time frame to select entry and exit areas (I also use it during fast market movements). The active emini nasdaq-100 index future now is NQZ0. The chart I attached here is from a 5 min time frame, here I am explaining what I see in volume & trends, my interpretation, and where I selected my entry and exit points and why. You can see that I only took profit from the middle of the trend, sometimes the market gives you more profits some time it only gives you a small profit, there is no way to know how far it will go. Notice that my trade is purely based on price structure, trend and volume analysis. That is all I use.

By the way, I do not like to post after the fact charts, but I think it is a good way to give an example.
 

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