Practical examples of volume use on intra day US shares

[Mr. Charts]

Looking at this stock tonight I saw a strong up mover which had shot up on heavy volume on the 1440 Eastern (1940 GMT) c'stick. The following c'stick pulled it back, but not all the way and on less volume. That told me there was potential for a further rise, so I watched and waited.
The first image was taken a few seconds after I bought as the buyers rushed back in.
What was a nice additional bonus with this was the spread - it shifted between 9 and 12 cents so I was able to buy on the bid and just two minutes later sell on the ask taking the spread like a market maker, plus the rise for myself.
Had it turned against me as soon as I had entered, I would simply had exited, selling below the ask and taking part of the spread for a profit even if I had been proved wrong by the market action.
The price just failed to touch the whole number reaching 24.98 and retreated so I seized 38 cents profit. That proved to be the high of the day.
If you look back to the 1345 and 1350 c'sticks, then the following three pull backs all on lower volume, you will see the same effect taking place.
Volume can be very deceptive and is a trap for the unwary, but the price action confirmed the potential for a further rise, so I took the opportunity when it arose.
Protracted theoretical discourse has its place, but a couple of pictures of volume influenced entry and exit speaks..........volumes.
I hope this actual example of a trade tonight helps someone.
Richard

 

[neil]

Excellent real world example - thanks

 

[SOCRATES]

Through the eye of a needle. Marvellous !

 

[lloydsc]

Mr Charts

Would'nt the support of the ax at 24.00 have been a sign for entry in the first instance, irrespective of volume?

Thanks
Steve

 

[zambuck]

Mr Charts

..Very interesting....thanks for the post....

I have seen other thread on this site that is for volume - just volume - and nothing else....

The question is is it ever possible to discuss volume only as a subject without looking at price action or other pointers ever..?...I think not...but perhaps someone can throw more light....

 

[Daniel]

As Richard started this thread and has expressed frustration at its going off on a tangent, I've removed all posts that seemed to be irrelevant to the topic being discussed.

If anyone wants the deleted posts showing as a new thread let me know but it seems pretty pointless.

 

[Mr. Charts]

A price and volume question

I thought I'd resuscitate this thread and try posting openly again after recent events.

There does seem to be some interest in price and volume matters.
Would anybody care to comment and say what happened next and why?
Richard

 

[chump]

LOL...go on then..odds are good

selling dried up followed by 4 unopposed buying periods ..no one looking for a concession of buying on the dip...price objective achieved denoted by sell off volume..followed by consolidation..I take this to be accumulation because the shadows below the range are being reversed quite quickly ...seems to tell me we could expect this range to break up again in the evening session ...what do you think ?

 

[stevespray]

Morning Richard...

I would suggest that the market has absorbed a good deal of stock which has been made available and the price has not dropped very much. To me this would indicate that move higher maybe likely.
As with all trades I am interested in my risk (when will I know I'm wrong?) With that in mind I would play the long side with a tight stop. If we moved below the three lows off the previous 2 hours then I'd be out quickly. The upside is obviously unlimited.

How am I doing?

Steve.

 

[chump]

yes I'm long too steve ,but I would want it to show me..that is if it clears that last minor high it will take off so I want to be positioned very close to that watching the spread for a clue and I am not interested in the stop until i see the action leading up to that ..as a fail safe stop could be under the last bar shown on the chart as it stands

 

[stevespray]

Richard................What happened next???

Steve.

 

[Mr. Charts]

chump,
"LOL...go on then..odds are good"
Hopefully, we'll see...........there are alter-egos............

stevespray,
Sorry not to reply earlier, but I was out helping someone this afternoon.
I had hoped there might have been more replies, especially with 120 views since I posted.
I'll see if anyone else posts this evening before answering if that's ok with you.
I had thought a P&V "specialist" might contribute.
If it's not ok then email me and I'll send you some more images ;-)
[email protected]
Richard

 

[SOCRATES]

The instrument featured in the chart above post number 7 appears to be teetering on the brink and due for an imminent and spectacular collapse, and under ordinary circumstances I should not be surprised if it drops to the point where it started, but there is something not quite right about the price action that precedes it and the volume. I think the last bar is a feint, and that actually this is going to rocket skywards. This would be in line with the preceding rise. The final distribution on that top is not sufficiently great to warrant a fall. The trickling of the price track that follows is very decieving until you examine the action bar by bar. This is not weakness, but hidden stregth instead, cleverly concealed.

 

[JumpOff]

Richard,
Is this a U.S. Stock? (Edit: Doh! thread is located in the 'US Stocks category!)

Are the times marked Eastern Standard Time? And is that volume spike 'real"? (Not a data feed error?)

Thanks,
JO

 

[JillyB]

Hi Richard,

A lot of people have probably looked at this but because, like me, don't trade using volume thought it unfair to reply.

If I was trading this I would go by the candlesticks and the levels of support and resistance visible and go with that. However this isn't what you're asking, or what the thread is about, then I shall keep quiet.

I am looking forward though to seeing the outcome of this, to see how trading with the volume compares.

 

[Mr. Charts]

True, JillyB
Richard

 

[peto]

To me it appears a large seller has unloaded a goodly chunk using a support level to provide buyers to take the stock. The support area held, indicating an imminent rise.

Pete

 

[Mr. Charts]

There have been some great replies, though only a few; but then I guess it's quality that matters, not quantity. Still, the replies speak volumes about the number of people who have some understanding and are comfortable coming forward. So few from 370 views.
A quite dramatic move, don't you think?
I was out at a meeting when this move happened so was not around to trade it. It was brought to my attention by someone I have helped in the past and is a fine example of how useful a real grasp of volume actually is.
Thanks to those who contributed.
Richard

 

[Mr. Charts]

PS
The first image was at $52.50
The price reached almost $55 on the last image.
Not a bad move, huh?
Richard

 

[chump]

Lovely ,and by making it show you ...very little risk

Excellent practice ...I'm still working at this ..so would be happy to keep going with this thread if others are interested..or just sit back if you are shy and have a good smirk when I fumble some..

Good stuff Richard