Article Volume Analysis

Jennjam

Newbie
5 0
Frugi-I don't think i signed at same time as diana or andry but I have same view as them. No dig at T Williams..but this article is a copy of his work . I dont like plagiary.

I also use anonymous proxy because as a woman trader i will wish to be anonymous. You have revealed andry and diana use anon proxy and i think you have abused your position...it is because people like you lurking or taking responsible positions and abusing origination of ip address that i remain anonymous. No dig at copy cat Manby or at T Williams because I attended VSA courses and like T Williams work. But this article is a very poor copy of T Wiiliams. And very poor of you to reveal ip source.
 

dbphoenix

Legendary member
6,953 1,256
Jennjam said:
Frugi-I don't think i signed at same time as diana or andry but I have same view as them. No dig at T Williams..but this article is a copy of his work . I dont like plagiary.
.

While it may be a "copy" of Williams' work, it's not plagiarism since Manby acknowledges Wyckoff as the source, and Wyckoff is the source of Williams' work as well. As long as one acknowledges the source, it's not plagiarism, as with Edwards acknowledging Schabacker (his brother-in-law) as the source of most of the material in Edwards' and Magee's classic (Schabacker died before the work was complete). Granted, few people know that the work was Schabacker's, but that's not Edwards' problem since he made the acknowledgement.

A great deal of what's been written since Neil and Dunnigan has been what one might call "unoriginal". But now that so many of these works have come back into print, enquiring minds can discover this for themselves.
 

SOCRATES

Veteren member
4,966 136
As a footnote I must remark that none of this is about learning but something completely different.
I find it all quite entertaining, as forces are exerted this way and that to create what can only be identified as spin.
 

SOCRATES

Veteren member
4,966 136
JumpOff said:
So the fact that they appear to move in tandem is a result of similar, but separate forces, and not arbing programs?
JO
Yes, that is correct, and additionally, you must not allow yourself to be confused by spin.
 

Skog

Member
74 8
Jennjam said:
Frugi-I don't think i signed at same time as diana or andry but I have same view as them. No dig at T Williams..but this article is a copy of his work . I dont like plagiary.

I also use anonymous proxy because as a woman trader i will wish to be anonymous. You have revealed andry and diana use anon proxy and i think you have abused your position...it is because people like you lurking or taking responsible positions and abusing origination of ip address that i remain anonymous. No dig at copy cat Manby or at T Williams because I attended VSA courses and like T Williams work. But this article is a very poor copy of T Wiiliams. And very poor of you to reveal ip source.

Hey, to those of you that don't know it, Sebastian Manby is Tom Williams protegé. Whatever he writes is probably just the same as Tom would have done. Do your homework before you call it plagiary.
 

ducati998

Experienced member
1,193 68
DBP,

And if you're defining "VOLUME" as a bar of some sort, then you're at least partly correct.

No, I was not defining volume at all.
What I actually said was..........Volume in respect to where a FUTURES contract will trade, IS A COMPLETE WASTE OF TIME.

As you simply decided to take the quote completely out of context, you thus perverted the point being made.

Watching bars on charts is merely a convenience and a choice, not a requirement, and it's no more related to daytrading than trading via monthlies.

True, however as a generalisation, excepting pit-traders, how many daytraders would not use a chart, as compared to those that do?
I suspect that my generalisation would be fairly accurate. However, should I be proven to be incorrect, I shall gladly retract my "generalisation".

JO,

Thanks for your interest, and lets stick to the S&P - just to make it easier on my brain OK? There is an S&P index which is calculated (derived) from the value of the stocks included in the index. It is just a published number, not a tradeable instrument. Right?

The S&P500, is an index of 500 stocks, which underlies the published figure each day, OPEN,CLOSE, HIGH, LOW.

You can trade it three ways,
1.......Buy every constituent stock ( ignoring any issues of weighting )
2.......Buy the Exchange Traded Fund, the ETF, or tracking fund
3......Buy 1, of 2, Futures contracts, e-mini, or the big boy.

The simple fact of the matter is this. A Futures contract is a DERIVATIVE.
All derivatives, DERIVE their value from an underlying commodity, wheat, oil, etc.
The S&P Futures contracts derive their value from the UNDERLYING STOCKS that form the index, constituting the S&P500.........They are a FINANCIAL DERIVATIVE.


but that seems too simple to me. (and backwards of what I have often heard, though I don't why the futures would always lead the underlying stock either). I'm guessing that it might be more of a push me / pull you kind of action, and that the instrument with the most weight (that is the most liquid volume) wags the other two. - but that's just speculation too.

Now, as the NYSE closes to trading each day, and the Futures do not, what happens is that the futures loses the correlation with the underlying stocks overnight.

In the morning, pre-market, all eyes focus on where the futures are TRADING, as this is thought to provide valuable information as to where the INDEX will open.

If the futures are high, then a high open for the market, low, then low.
Now this is fine and can work out this way.
What happens though, is that lets say 1 stock, with a heavy weighting, during earnings season comes in with a bad result in it's earnings, and sells off hard.

The futures, however were trading high, expecting a good result, and as a CONSEQUENCE of the weighting, and the hard sell off, the INDEX, instead of opening high ( being influenced by the futures ) OPENS LOW.

The Futures, will now HAVE to trade down, as their value is derived from the index. Irrelevant if your buying volume shows demand.......makes no difference, THE VALUE IS BY LAW LINKED TO THE UNDERLYING.

So, in summation, when there are no FUNDAMENTALS in play, and just speculation, the Futures may INFLUENCE the INDEX, and conversely the opposite is true.
However, when fundamentals EFFECT a change in the STOCKS, the index changes followed by the futures.

SOCRATES
The answer is no.
The reason is that the underlying is subject to its own supply demand forces
The derivative is subject to separate supply demand forces
Although both may be tilted in the same direction, it does not mean that they are tilted in harmony to each other. This means quite simply that they are not yoked in unison to the same supply demand pressures.

You are quite simply wrong.
Not only are you wrong, but you are dangerously wrong.
As such, I think that your postings need to be monitored by T2W, as the information you impart is potentially damaging to traders.

Futures contracts originally developed for commodities, the reason being PRODUCERS needed to hedge their production.

If I was a farmer growing wheat, I would before growing it, want to know that it was economically viable for me to do so.

A futures contract would allow me to BUY or SELL an offsetting position to my produce, ie a hedge.

In this scenario, the DERIVATIVE can fluctuate in price UNTIL, wheat harvest draws close, and the extent of the harvest becomes known.....SUPPLY, this will then tie the price DEMAND to the supply, ie the underlying.

Financial instruments ( stocks ), however are MARKED TO MARKET EVERY DAY.
Therefore, supply and demand of the underlying ie, value, are known every day, therefore, the DERIVATIVE is TIED to the underlying everyday.

Therefore, the demand for a derivative may skyrocket, and a buying frenzy ensue, but, if the UNDERLYING loses value, and drops in value......THE DERIVATIVE also loses value, unless, in the case of options, you have a time value component, in addition to intrinsic value.
In that case, intrinsic value drops ( linked to the underlying ) but time value remains, but that will also shrink, just not by the amount you may expect. This is an entire subject of it's own however.

But this is not the case for a financial futures contract. There is no time value.
The forward months are a relic from the commodities, where physical delivery was part of the contract.

DBP,

On the other hand, if you're asking a trading-related question, then the answer is the same that I've provided before: it doesn't make any difference. If you're trading the ES, trade the ES. If you're trading the S&P, trade the S&P. Trying to calculate the movements and volumes of even the most heavily-weighted components in order to tell you what to do won't help you much unless you're trading off a weekly chart, though you might be able to do it off a daily chart if you're especially aggressive. However, since you're trying to trade for only a few hours in the early morning, this seems not to be a route that is open to you and will not likely help you define your setup.

But, you see, it does make a difference.
She is trying to understand the Structure of the Market. The structure of the market will influence the FUNCTION of the market.

The relevant example is volume.
Volume in the futures market, can at specific times mean absolutely **** all.
If you are basing your trading decision on an analysis of volume at this time, you will have a loss on your books.

cheers d998
 

dbphoenix

Legendary member
6,953 1,256
ducati998 said:
No, I was not defining volume at all.
What I actually said was..........Volume in respect to where a FUTURES contract will trade, IS A COMPLETE WASTE OF TIME.
Actually, you didn't. But, as you like.
True, however as a generalisation, excepting pit-traders, how many daytraders would not use a chart, as compared to those that do?
I have no idea. What I said was that it was not a requirement, and it's not. People were daytrading long before charts were available.

No need to retract your generalization, tho. It's not important.
But, you see, it does make a difference.
She is trying to understand the Structure of the Market. The structure of the market will influence the FUNCTION of the market.
Whether it makes a difference or not to her trading depends on what she wants to do with it. But since I've been working with her for several months, I'll wait to hear from her, thanks.
 

Trader333

Moderator
8,642 969
One thing that is overwhelmingly reinforced on thread after thread and that is that traders will always disagree with each other. This is, of course, great news for the few who continue to make money on an ongoing basis from the many. I hope that the disagreements continue as I am doing quite nicely from those who take the opposite side of my trades and if we all agreed then this opportunity would cease to exist. So I would like to thank all those in the past, present and future who have, do now and will continue to diasagree with me. :)


Paul
 

Salty Gibbon

Experienced member
1,535 6
Paul

Are you p*issed ?

You usually write rather more intelligently than your previous post.
 

neil

Legendary member
5,167 748
Trader333 said:
One thing that is overwhelmingly reinforced on thread after thread and that is that traders will always disagree with each other. This is, of course, great news for the few who continue to make money on an ongoing basis from the many. I hope that the disagreements continue as I am doing quite nicely from those who take the opposite side of my trades and if we all agreed then this opportunity would cease to exist. So I would like to thank all those in the past, present and future who have, do now and will continue to diasagree with me. :)


Paul

Amen to that
 

SOCRATES

Veteren member
4,966 136
Trader333 said:
One thing that is overwhelmingly reinforced on thread after thread and that is that traders will always disagree with each other. This is, of course, great news for the few who continue to make money on an ongoing basis from the many. I hope that the disagreements continue as I am doing quite nicely from those who take the opposite side of my trades and if we all agreed then this opportunity would cease to exist. So I would like to thank all those in the past, present and future who have, do now and will continue to diasagree with me. :)


Paul
Yes, you are quite right, and this is because you are not Ducatti.
 

ducati998

Experienced member
1,193 68
DBP,

Well all that is a prelude to my real question. Isn't it true that because of the way the markets are linked, and the way that computer arbing programs work, that the most important thing to know about trading is: which instruments (if any) are "the dogs." If you are trading one of the wagged tail derivatives, you would need to watch volume and price on the dog, no?

The original question.
Followed by the answer,

The answer is quite simply the UNDERLYING.So in the case of the Dow Jones e-mini, ( YM ) it will be the constituent 30 stocks that form the index from which the futures contract is DERIVED Once the NYSE closes for trading, then the YM is free to trade where ever it wishes. When the NYSE opens, the YM will again resume lockstep.Therefore, unless you are simply a momentum trader, ie, daytrader, to understand where the futures are going, you must understand where the underlying are going.To understand where the underlying are going, then VOLUME, is pretty much a complete waste of time.

I can see where the confusion has arisen..........an analysis of FUTURES VOLUME is a waste of time would have removed any ambiguity.........I am obviously at fault for making assumptions of greater knowledge than is actually present.

Whether it makes a difference or not to her trading depends on what she wants to do with it. But since I've been working with her for several months, I'll wait to hear from her, thanks.

Well, obviously she is interested, because she asked the question. ( refer to quote #1 )
But obviously that was a bit too subtle for you as well, and you missed it.

As for the .....Commen - tata,
Perhaps you had best venture back into the Star Chamber, continue your mass debates amongst the darkside, and go play with your large guns......cannons were they not?
There is some psychological disorder linked to boys and big guns, but it slips my mind at the moment.
 

SOCRATES

Veteren member
4,966 136
ducati998 said:
I can see where the confusion has arisen..........an analysis of FUTURES VOLUME is a waste of time would have removed any ambiguity.........I am obviously at fault for making assumptions of greater knowledge than is actually present.
I can forgive you nearly everything because on occasions like these, you do drop some gems.
Ha ! Ha ! Ha ! You are really really funny !
 
 
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