Price & Volume & Other Things (possibly indicators too at some stage...)

[TheBramble]

I'm interested in establishing if I'm on the right track in my study of the above.

BTW - There has been a lot of discussion recently about the discussion of this topic. Initially on another member's public and now his private forum.

The move to private is a good one in my opinion, as it frees the topic up to be discussed once again in the public domain without (a) interference of an inappropriate kind (however deemed) and (b) and without any pressure on or need from the mods to move posts into a forum in which some members would not wish to have their output placed.

So, a thread which I hope will be a little more expansive and less proscriptive/prohibitive than we have recently enjoyed. And hopefully one in which the free flow of open discussion along with the to-be-expected digressions and diversions will make for a genuinely 'full flavour' public forum.

Please feel free to wander wildly off-topic only as far as is necessary to make the point you want to make in relation to the topic anyway, in your own way.


QUESTION

If I'm looking for a truly comprehensive set of criteria based on just price and volume, which of the following are vital, useful, superfluous and more importantly, what am I not thinking about?

ACTION:- Is the open/close widely spaced apart on the high/low range or close together?

FINISH:- Does the close occur at the bottom, top or middle of the high/low range?

RANGE:- Is the high/low range larger, smaller than recent?

PRICE:- Is is closing higher or lower than recent bars?

VOLUME:- Is is higher or lower or 'average' compared with recent history and what is 'recent'?

TREND:- What is the trend (are thew trends) in the higher timeframes?


In what ways and combinations have other members found the interplay of these factors to be relevant to their own trading style and success?

 

[dr_d_michaelson]

... it frees the topic up to be discussed once again in the public domain without (a) interference of an inappropriate kind (however deemed) and (b) and without any pressure on or need from the mods to move posts into a forum in which some members would not wish to have their output placed. So, a thread which I hope will be a little more expansive and less proscriptive/prohibitive than we have recently enjoyed. And hopefully one in which the free flow of open discussion along with the to-be-expected digressions and diversions will make for a genuinely 'full flavour' public forum.

A very welcome and commendable idea, Tony! Well done ... I promise/threaten to take part, time permitting. I have much to learn.

 

[erierambler]

I'm interested in establishing if I'm on the right track in my study of the above.

In what ways and combinations have other members found the interplay of these factors to be relevant to their own trading style and success?

Bramble

You could ask, " Is price trending, consolidating, correcting, or reversing." Study price behaviour before and after these occurrances through past charts (history). One doesn't need to make too many trades in a week. The less the better imho.
Almost everything you need to know Dbphoenix has recorded in threads at Elite Trader. In fact I'm finding out for myself that if you study it enough , Price is all you need to know ( not volume) with respect to futures anyway.

erie

 

[TheBramble]

You could ask, " Is price trending, consolidating, correcting, or reversing."

OK good. But these are throw-away comments. No disrespect intended ER, but this doesn't go anywhere near deep enough. It is precisely because most traders think they know what 'trending, consolidating, correcting, or reversing' mean that few stop to question what the basic mechanics must be for those terms to hold true.

So what does each of the above (self-defined) qualities (ACTION, TREND, FINISH, RANGE, VOLUME, PRICE) look like in each of those scenarios you mention? Do you know? Have you kept a log/record? That really is the basis of my question to all members.

I'm asking if any members have empirical definitions of high specificity of how we can understand where we are at any time with the life cycle of an instrument with a higher than evens probability of being correct.

As for picking up 'almost everything I need to know' - I've done my time on bulletin boards, books, seminars, courses, software - not to mention years of trading - the works. I'm not thick, but I'm still asking the question so I'm guessing there are quite a few others out there too who have also read 'almost everything thy need to know' too and are only just slightly the wiser.

If it requires a de-instinctification of what successful traders actually do then I'm happy to kick off with a few stabs at these definitions myself, but I don't believe a standard regurgitation of text-book definitions is going to do the trick. We need insightful and (more difficult it would seem) entirely fresh thinking on what we really mean when we bandy these terms around so freely.

 

[erierambler]

OK good. But these are throw-away comments. No disrespect intended ER,
So what does each of the above (self-defined) qualities (ACTION, TREND, FINISH, RANGE, VOLUME, PRICE) look like in each of those scenarios you mention? Do you know? Have you kept a log/record? That really is the basis of my question to all members.

I'm asking if any members have empirical definitions of high specificity of how we can understand where we are at any time with the life cycle of an instrument with a higher than evens probability of being correct.


.

No disrespect taken but I am not going to give you my trading plan, it has been a long road for me. The answer you are looking for is exactly where you are supposedly looking. Yes I keep a log /record. I keep every day's action filed in my cabinet with notes and then at the end of the week as well.
As far as the higher than evens probability . You should get at least 3 out 4 trades in your favour. One can't predict the price action , which is why you will be wrong at certain times, but you can allow for it. If price hits your stop then something has changed.
The amount of trades that come to you is minimal so there is no need to sit in front of price and waste your time, but it seems so many want to do that. But then they are trading different than me and there's nothing wrong with it. I'm sure Db would help anyone as he is the main reason for the path I have taken and deserves most of the credit.

take care

erie

 

[twiggytwo]

Hi Erierambler, I have read the contents of this thread with interest it is very helpful to see how others think .
I also keep a daily log on paper and have done so for about 4 years I do have 3 computers with all the twin screens and software etc but still find that the log is an essential part of my trading plan , I see you are location Canada I am in Kent in the UK
4 years ago the person who showed me how to keep a log ( for Trading ) on paper, was a Canadian living in the UK.
sorry not know this, but who is Db ?
Best Regards to all on this thread

 

[barjon]

Tony,

This promises to be extremely interesting.

So far as trend, correction, consolidation and reversal are concerned from my perspective, I hope the thumbnail is self-explanatory.

For entry in respect of this swing pattern I use none of the factors you raise other than price. I have not found any of the other factors advantageous (but that's probably because I don't understand well enough how to interpret them 🙄 )

For exits (when there is not a swing high(low) nearby that would, if breached, take me out anyway) I do take account of those other factors and close up my stop if my interpretation ( 🙄 ) makes me nervous. No empirical definitions of high specificity though - more a judgement call - I'm probably wrong as often as I'm right (but a shooting star on high or highish volume seems to do better than that 🙂 .)

Not sure if this has added much to your thread but never mind.

good trading

jon

ps: when I say in the thumbnail that correction is defined I mean that I've defined it - there's no definition obvious on the sketch.

 

[erierambler]

sorry not know this, but who is Db ?
Best Regards to all on this thread

You can do a search for Dbphoenix , here and on Elite Trader for his threads regarding Price and Volume. One word of caution though is that Db requires one to do their own work.

erie

 

[erierambler]

I also keep a daily log on paper and have done so for about 4 years still find that the log is an essential part of my trading plan ,Best Regards to all on this thread

Very good to see someone puts in a little extra effort as well. Whenever it seems I come across something new, I go back through all my charts and mark them up some more. LOL.

erie

 

[Effkay]

Barjon,

I like the picture you put up, the only point I would like to add is regarding change of trend.

You have defined it as breaking a swing high/low. (i think!). Now in your example we break above the swing high, and start an uptrend, some would argue that you need to see a higher low before you can say the trend has changed. So ideally you would be looking for a higher low and then a break of the swing. If not then you have to wait for the price to correct and make a higher low.

I don't know how this would work in intermediate/long term analysis but for shorter term moves I find it's important to wait for the higher low signal.

 

[dbphoenix]

sorry not know this, but who is Db ?

He's the "another member" referred to at the beginning of the first post to this thread.

Glad to meet you . . . 🙂

 

[barjon]

Effkay

Yes, the higher low from the first correction confirms it. If you're aggressive you'd begin to enter at the first break (which has the disadvantage that it might be a false break) then put on some more when confirmed by the first correction. More conservative and you'd wait for the first correction (which has the disadvantage that it might be a long time coming). Depends on your style.

good trading

jon

 

[twiggytwo]

Thank you ER, I should have seen that Db. was short for Dbphoenix .
I think I can now apply the DB to myself as Dumbo!
I will look on Elite Trader
regards

 

[TheBramble]

No disrespect taken but I am not going to give you my trading plan, it has been a long road for me.

Don't think I was asking for anyone's trading plan - just how they specifically interpret those items I put up for discussion.

The answer you are looking for is exactly where you are supposedly looking.

Supposedly?

What I'm looking for is an explanation for why my successful trades are successful. I've narrowed it down to these factors (I think) and find myself a little exasperated that I can't empirically define what it is I'm doing in these instances. I'm willing to accept it is a culmination and accumulation of everything I've done, read, traded, thought, talked about, watched etc. - but to set it out in plain language is rather difficult to do. This to a large extent has been brought on by Ducati's (soft) challenge for TA types to define how they do what they do.

I'm sure Db would help anyone as he is the main reason for the path I have taken and deserves most of the credit.

I appreciate you're a big fan of dbp and I'm sure he appreciates your continued support and advertising. Dbp has his own style and forum and I am sure many newbies will, as you have, find something useful from it.

What I am hoping for here is that more experienced traders who are able to identify what factors consistently account for their successful trades will be able to help me throw some light on the apparent difficulty in defining them.

 

[TheBramble]

Tony,

This promises to be extremely interesting.

So far as trend, correction, consolidation and reversal are concerned from my perspective, I hope the thumbnail is self-explanatory.

For entry in respect of this swing pattern I use none of the factors you raise other than price. I have not found any of the other factors advantageous (but that's probably because I don't understand well enough how to interpret them 🙄 )

A really good example of how we (you) use instinctual information.

Take the swing high just before the correction, which of the following scenarios most accurately depicts the situation...

ACTION:- Is the open/close widely spaced apart on the high/low range or close together?
A. The open/close are getting closer together.
B. The open/close are wide apart.

FINISH:- Does the close occur at the bottom, top or middle of the high/low range?
A. The close is occurring toward the top of the range.
B. The close is occurring increasingly toward the bottom of the range.

RANGE:- Is the high/low range larger, smaller than recent?
A. The range is increasing.
B. The range is decreasing.

PRICE:- Is is closing higher or lower than recent bars?
A. The close is consistently higher than recent bars.
B. The close is occurring closer to the close of recent bars.

VOLUME:- Is is higher or lower or 'average' compared with recent history and what is 'recent'?
A. Volume is decreasing or static.
B. Volume is increasing.

TREND:- What is the trend (are the trends) in the higher timeframes?
A. Trend is up in all higher timeframes
B. There is no full agreement in trend on higher timeframes.

Anyone see where I'm coming from? We are looking at just one piece of market action - an up trend just prior to a reversal/correction. How valid are my suggested A/B responses (you can tell I'm sure which way I've 'rigged' this) and I'm obviously not looking for responses as it's more of a demonstration of what I'm trying to establish as an MO for trading decisions. But what other factors, when you think about it now, do you believe you instinctively or mechanically take into account?

BTW - Anyone who feels they don't want to give away anything about their trading secrets doesn't have to - you can just watch and learn from those like me who are. 😆

 

[sulong]

Is it just me, or do others see simple ideas getting complicated?

This type of trading takes 1 core element... expansion / contraction.

You enter because you think the odds of "expansion" are better than that of "contraction", or the other way around.

All this P/V, trend, range ect.. are only visual elements to determine if expansion is more likely, or contraction is more likely.

 

[Perrington]

A good thread, I tend to understand plain english better than riddles for some strange reason. Iam sitting here and learning. 🙂

Also, as Iam an objective thinker, I find myself asking a question. Why are so many people coming out and telling us their secrets to making profits ? Do they know of an impending disaster that is going to wipe out our present economic structure or something ? Afterall, is the game not still on ? 🙂

 

[erierambler]

Don't think I was asking for anyone's trading plan - just how they specifically interpret those items I put up for discussion.

Bramble (Tony)

You are staring right at it.

I appreciate you're a big fan of dbp and I'm sure he appreciates your continued support and advertising. Dbp has his own style and forum and I am sure many newbies will, as you have, find something useful from it..

Db has pointed me in the right direction from the start and #1 was to have respect for my money and learn capital preservation. That was a gift in itself. For that alone I am most gratefull, but that is off topic.

erie

 

[timsk]

dbp
Good to see that you emerge occasionally from your private bunker to see what's going on above ground! :cheesy:

barjon,
One of the things I learnt from dbp before he decided to go underground is the need to clearly define exactly what one means by various definitions. In themselves, definitions don't matter a great deal. However, if I've understood dbp correctly, what is absolutely vital is that each trader knows what s/he means by definitions such as a 'correction'. In the visually clear and well drawn thumbnail attached to your post earlier, you showed a 'correction'. For the benefit of peeps new to this thread and unfamiliar with the threads on dbp's 'Price & Volume' forum, - would you care to define what you mean by a 'correction' please? Is it the same thing as a 'pull back' or a 'retracement' and, if not, what are the differences?

Cheers,
Tim.

 

[barjon]

barjon,
One of the things I learnt from dbp before he decided to go underground is the need to clearly define exactly what one means by various definitions. In themselves, definitions don't matter a great deal. However, if I've understood dbp correctly, what is absolutely vital is that each trader knows what s/he means by definitions such as a 'correction'. In the visually clear and well drawn thumbnail attached to your post earlier, you showed a 'correction'. For the benefit of peeps new to this thread and unfamiliar with the threads on dbp's 'Price & Volume' forum, - would you care to define what you mean by a 'correction' please? Is it the same thing as a 'pull back' or a 'retracement' and, if not, what are the differences?

Cheers,
Tim.

Tim,

For me a "correction" is a counter-trend dip (rally) containing at least 3 lower high, lower low bars (and vice versa). Bit more complicated than that, but that's it in essence.

good trading

jon