How important is volume?

[Fran8]

I guess that there would be two answers to the question first the one that says that Price is all you need and the other ones that will say that volume is the most important since is what measures demand and supply.

I have this question and I’m not really clear what to answer I have seen many stocks advance a lot without volume confirmation and I have also see many breakouts fail when they did not have enough volume.

Many people will also say trade retracement instead and I could go with the same argument that there are as many stocks that do not retrace to the breakout point as stocks that do retrace so please let’s stick with the argument of volume.
Opinions please

 

[kimo'sabby]

I guess that there would be two answers to the question first the one that says that Price is all you need and the other ones that will say that volume is the most important since is what measures demand and supply.

I have this question and I’m not really clear what to answer I have seen many stocks advance a lot without volume confirmation and I have also see many breakouts fail when they did not have enough volume.

Many people will also say trade retracement instead and I could go with the same argument that there are as many stocks that do not retrace to the breakout point as stocks that do retrace so please let’s stick with the argument of volume.
Opinions please

Volume is very important, if you want it to be. But i suppose it boils down to a question of reliability and risk averseness (see time-frames).

 

[Fran8]

Volume is very important, if you want it to be. But i suppose it boils down to a question of reliability and risk averseness (see time-frames).

My opinion is that for the short and intermediate trend is important for the long term not at all. But we still have the same problem how important it is ?

 

[kimo'sabby]

My opinion is that for the short and intermediate trend is important for the long term not at all. But we still have the same problem how important it is ?

You've answered your own question, at least for you. You can stop chasing your tail now.

 

[Fran8]

You've answered your own question, at least for you. You can stop chasing your tail now.

Basiscally my question is what do you do or how do you act with the stocks that breakout have advance but do not saw volume signlas

 

[Platinumtrader]

Whether volume is important or not depends on your own style of trading. Many trade with volume, as many do the same without.

The real answer for you will lie in identifying whether volume would have made any difference to your previous decisions and how that understanding would have changed.

Before you can approach this step you have to know how volume works and what it represents at any particular phase of the market. For example, are you looking at distribution, accumulation, absorption, testing volume etc.

Tom Williams wrote a very good book and the Wykoff Institute ( I think thats what they are called) offer an in-depth coverage on the topic.

 

[Splitlink]

I guess that there would be two answers to the question first the one that says that Price is all you need and the other ones that will say that volume is the most important since is what measures demand and supply.

I have this question and I’m not really clear what to answer I have seen many stocks advance a lot without volume confirmation and I have also see many breakouts fail when they did not have enough volume.

Many people will also say trade retracement instead and I could go with the same argument that there are as many stocks that do not retrace to the breakout point as stocks that do retrace so please let’s stick with the argument of volume.
Opinions please

Volume should be very important. My honest opinion is that it is fiddled during the day, at least.

EOD, perhaps, could be more reliable, but I do not trust it fully, either.

With figures that cannot be trusted it is better not to use them.

This is the problem that I had with a long gone poster, dbphoenix. His technique was great. Was he being fed correct figures, though? It's all a question of faith, isn't it?

 

[Fran8]

Whether volume is important or not depends on your own style of trading. Many trade with volume, as many do the same without.

The real answer for you will lie in identifying whether volume would have made any difference to your previous decisions and how that understanding would have changed.

Before you can approach this step you have to know how volume works and what it represents at any particular phase of the market. For example, are you looking at distribution, accumulation, absorption, testing volume etc.

Tom Williams wrote a very good book and the Wykoff Institute ( I think thats what they are called) offer an in-depth coverage on the topic.

What is the name of the book by Tom Williams, I search in amazon and the I only found one call "Master the Markets - Secrets from Wall Street Pros" but is kindle version. Wykoff is a firm beliber in volume and says that is the most important indicator to decide if prices are going to advance or decline

 

[Splitlink]

I think that dbphoenix has a forum, somewhere. Someone will know. He has written a book,too, and I am not criticising his work. It's just that I, personally, do not trust volume figures.

Note: I have tried Google and you will find him there.

 

[China Diapers]

What is the name of the book by Tom Williams, I search in amazon and the I only found one call "Master the Markets - Secrets from Wall Street Pros" but is kindle version. Wykoff is a firm beliber in volume and says that is the most important indicator to decide if prices are going to advance or decline

The Undeclared Secrets That Drive the Stock Market

 

[Fran8]

I think that dbphoenix has a forum, somewhere. Someone will know. He has written a book,too, and I am not criticising his work. It's just that I, personally, do not trust volume figures.

Note: I have tried Google and you will find him there.

I have read In other threads that the book that you are talking about is very good but very difficult to get since is not exactly a book but different essays written and put together by dbphoenix. can you help me out finding the book?

 

[Splitlink]

I have read In other threads that the book that you are talking about is very good but very difficult to get since is not exactly a book but different essays written and put together by dbphoenix. can you help me out finding the book?

When he was writing here those who wanted the book pm'd him. If he is available through the internet, I suggest you do that because he is a very helpful guy and, naturally, wants to sell his book to as many as possible!

Maybe, one of the older monitors know where he is or what he is doing, ie. Timsk or Barjon.

 

[Splitlink]

You can see that he was active here four years ago by this thread that I found. There are references to his book by some posters. It seems to be downloadable.

http://www.trade2win.com/boards/price-volume/19052-dbphoenix-book-3.html

HTH

 

[China Diapers]

He was active more recently here:

http://www.traderslaboratory.com/forums/blogs/dbphoenix/

There is a free preview of his book on there.

 

[China Diapers]

FWIW I find the best breakouts happen on increased volume.

 

[Fran8]

The Undeclared Secrets That Drive the Stock Market

Thanks a lot for the recommendation one of the top books that I have ever read, very clear and to the point. I have read many books and I did not know about this guy, like I say top book recommended to anyone interested on volume.

You do not have to buy it just type the name on google and you can downloaded.

 

[timsk]

Hi Fran8,
dbphoenix moved away from T2W some years ago. He had a forum on TradersLaboratory but has left there too, I believe. I can't improve on Splitlink's suggestion of doing a Google search to find him I'm afraid.

In the meantime, you will find a lot of his posts here on T2W, this sub-forum contains a lot of them: Price & Volume This thread in particular is well worth a look: Price, (Volume), Support, Resistance, Demand, Supply . . .

IMO, interpreting volume is the devil's own job - which I admit is another way of saying that I'm not very good at it! I'm afraid that whatever you read on the subject, you won't find any cookie cutter techniques for interpreting it quickly, easily and consistently. That said, I don't want to put you off studying it - far from it - many find it invaluable.

Personally, I find Delta much more useful. This breaks down volume into trades transacted at the bid Vs those transacted at the ask. For me, this provides more accessible and reliable insight into market sentiment. I use it in conjunction with $Tick to trade U.S. index futures. The video below sums up the way I trade - although it contains a market profile footprint chart which I don't use. Way too clever for me - I just stick with a basic Renko chart!
Tim.

 

[new_trader]

Volume should be very important. My honest opinion is that it is fiddled during the day, at least.

EOD, perhaps, could be more reliable, but I do not trust it fully, either.

With figures that cannot be trusted it is better not to use them.

This is the problem that I had with a long gone poster, dbphoenix. His technique was great. Was he being fed correct figures, though? It's all a question of faith, isn't it?

Split, can you explain why you believe volume figures are untrustworthy? What did you use as a benchmark?

 

[Splitlink]

Split, can you explain why you believe volume figures are untrustworthy? What did you use as a benchmark?

Not now, because too much time has passed. At the time, dbphoenix did not convince me and I tried hard with the "springboard" technique, etc Maybe, with the sophisticated software about, nowadays, the figures from all the brokering houses and exchanges can be brought together on a minute-by-minute basis but, as I said, it is a question of trust. I see price. I, either, want to to buy at that level, or I don't. Volume does not do anything for me because I do not have faith in the figures.

 

[Fran8]

Not now, because too much time has passed. At the time, dbphoenix did not convince me and I tried hard with the "springboard" technique, etc Maybe, with the sophisticated software about, nowadays, the figures from all the brokering houses and exchanges can be brought together on a minute-by-minute basis but, as I said, it is a question of trust. I see price. I, either, want to to buy at that level, or I don't. Volume does not do anything for me because I do not have faith in the figures.

Can you give more details why you do not like volume, I think that is very difficult to interpret but all the best traders in history like Livermore, Dreyfus, Darvas Wykoff etc used and considered one of the most important indicators. i know that you will say that there are as many succesful traders that do not use it and have been as succesful like Richard Dennis and the Turtles or basically trend following systems.

But since this is a thread about volume plesase explain why you do not like it