Volume tells all

[fudgestain]

Volume, smolume ..

Volume tells all .. ah I don't think so.
Is price a function of volume or is volume a function of price? Answer .. durrrrrrh?

Volume, one of the biggest cul de sacs in TA. I just love it when the masses are diverted.

 

[osho67]

mr. marcus, is this an intraday chart? If so, could you please explain how volume is helping to making trading decisions?

Thanks

 

[expensif]

And what about all the people who trade Forex for a living?How do you suggest that they proceed?

I have a quick question, I don't understand why not volume is important for forex?
Aren't there charts that show the volume in forex?

Thanks!

 

[wwatson1]

Talking sense

Hi vsatrader, I can relate to your ideas on volume as It is an important part of my stock analysis.

Often on my trade examples I point out how I am using volume to understand the underlying supply and demand. I like to focus on an intra day chart of the last few trading session's before I enter.

Good post, I know for a fact you know what your talking about. :idea:

 

[VSATrader]

Hi vsatrader, I can relate to your ideas on volume as It is an important part of my stock analysis.

Often on my trade examples I point out how I am using volume to understand the underlying supply and demand. I like to focus on an intra day chart of the last few trading session's before I enter.

Good post, I know for a fact you know what your talking about. :idea:

Thank you sir,

Now all my posts have not been in vain. :cheesy:

Regards VSATrader

 

[osho67]

Hi VSATrader, please say something !

Can this analysis be done for YM intraday ? I see charts like this, but no one posts something similar for an index intraday. I would be interested to know how useful it is to view intraday volume, I just can't understand it at all, or is it better to observe prices only ?

Thanks

 

[dbphoenix]

Can this analysis be done for YM intraday ? I see charts like this, but no one posts something similar for an index intraday.

No one? Or could it be that you just haven't looked? :|

--Db

 

[osho67]

Hi dbphoenix, maybe I have not looked hard enough, if you can advise where to look, have a link perhaps ? I would be happy to check it out , many thanks

 

[JumpOff]

Dukascopy has some free charts with intraday vol for the indexes and currencies. (I think it is tick vol for currencies) It doesn't work with Mozilla, you have to use microsoft's browser.

http://www.tradingsimulation.com/charts/
JO

 

[osho67]

Hi JO, thanks for the reply, but what I would like to know is those traders who trade intraday, could they confirm that intraday volume is useful in making trading decisions.

 

[fudgestain]

Hi JO, thanks for the reply, but what I would like to know is those traders who trade intra-day, could they confirm that intra-day volume is useful in making trading decisions.

Take intra-day Dow. A great play day after day.

If you are using only price action, adding observation of volume levels may give a clue as perhaps some very small help to you. But then so can a MACD or Stochastic indicator give some vague orientation to the player.

The thing is when you more or less master your market (ie YM, or cash Dow if you like), volume isn't needed. If that is all you have, by all means tiddle around with it; you are not going to amass a fortune from it EVER.

 

[VSATrader]

Hi VSATrader, please say something !

Can this analysis be done for YM intraday ? I see charts like this, but no one posts something similar for an index intraday. I would be interested to know how useful it is to view intraday volume, I just can't understand it at all, or is it better to observe prices only ?

Thanks

Hi osho67;

The principle of volume and it's relationship to price is the most significant to any experienced trader. I have read in Shares mag that then they interviewed some traders in the city, they were surprised to see that they only look at level 2, and that only shows you current quoted prices and volume. They can see where the large blocks of volume are at which price level, so they know where they can push prices for a profit before they hit those large orders. The same is done on the CBOT and CME, and also the NYSE as the specialist has a unique view of the market. He is the market maker and can see both sides, also knowing where the stop losses are, large orders to buy or sell stock.
Why don't you ring up the NYSE and ask then if they use anything else but price and volume. you might be surprised by the answer.

I ONLY use volume and price, with trend-lines. That's it!

Regards VSATrader

 

[osho67]

Hi fudgestain

So for YM intraday you would say volume is not required, and price observation alone should be the main focus, e.g. you could use volume or indicators to confirm a position but basically prices lead everything including volume ?

 

[osho67]

Hi osho67;

The principle of volume and it's relationship to price is the most significant to any experienced trader. I have read in Shares mag that then they interviewed some traders in the city, they were surprised to see that they only look at level 2, and that only shows you current quoted prices and volume. They can see where the large blocks of volume are at which price level, so they know where they can push prices for a profit before they hit those large orders. The same is done on the CBOT and CME, and also the NYSE as the specialist has a unique view of the market. He is the market maker and can see both sides, also knowing where the stop losses are, large orders to buy or sell stock.
Why don't you ring up the NYSE and ask then if they use anything else but price and volume. you might be surprised by the answer.

I ONLY use volume and price, with trend-lines. That's it!

Regards VSATrader

Hi VSATrader, thankyou for the reply.

What are the main relationships between volume and price intraday? When I look at YM intraday and volume, I can't figure out what to do with it. What timeframe would you advise, 1 minute, 5 minute, 10 minute ?

For example, low volume might signify time to Buy, but then again there are examples that show low volume and the market just falls 30 points, then it reverses on middling or average volume, what do you look for ?
Do you look at the previous volume bar?
Do you need to wait for volume to rise/fall to a certain level for the chosen market before you make a decision?

 

[fudgestain]

Hi fudgestain
So for YM intraday you would say volume is not required, and price observation alone should be the main focus, e.g. you could use volume or indicators to confirm a position but basically prices lead everything including volume ?

Certainly for index futures (and Ldn cash indices), I would say volume is of little or no help.

The pattern is higher volume in the first hour and a half and higher volume in the last 1 or 2 hours of trading hours of the market. I look at the market pattern unfolding as pre-lunch 09.30-12 and after lunch 13-16 hrs NY time.

I don't believe any independent traders use a predictive trading model. I do. I will know what to expect at market start 09.30 NY time and will probably have mostly known as early as the night before.

 

[dbphoenix]

Hi dbphoenix, maybe I have not looked hard enough, if you can advise where to look, have a link perhaps ? I would be happy to check it out , many thanks

Begin with the link under my name. There is also the entire Price/Volume Forum available to you.

 

[peernot]

Me and you and a dog named blue.

Excellent and thought-provoking post, VSAtrader.
The analysis on the attached image is incisive.

Would you be able to provide real-time "as it happens" analysis for a test-period ?
i.e, identify moments of over-supply / under-supply etc, and thus identify ideal conditions to buy or sell, with stop-losses etc ?

Personally, I have never been able to get my head around supply and demand !!
I have always thought of it as people deciding whether something was cheap or expensive !
( lower volume represents the price has is regarded as too high for people to continue buying, so they stop bidding, so the price drifts down until people think it is fair value.
When the price spikes down, people rush in as they think they are getting a bargain, so the volume increases.
If I misunderstand volume, thats probably why I have blown 2 accounts so far )

From a different perspective :- I see we all create hype around a stock and then spend endless hours in posts and discussion explaining the hype we have just created and why it happened.Just like I`m doing. Oh how we like to hype things up.

 

[joeMcnicholl]

Good afternoon to you all

Successful speculators learn to follow price action and not try futilely to predict turning points in advance. They seek to trade in tune with the large participants who move the markets.futures contract--fundamental, political, psychological or otherwise--is actually reflected in the price of that commodity. It follows, therefore, that a study of price action is all that is required.let the market tell you which way it is most likely wants to go.

You know there are reasons why markets go up and down.I just dont believe that knowing what those reasons are is necessary.I been trading a long time.I did not have the tools as you guys have today, to study volume,I just trade on price action. But I am not saying volume dont work. I dont feel its necessary..to make a few $$$ Good luck

joe

 

[bracke]

I think that posts 41 & 42 puts it in a nutshell.

Regards

bracke

 

[barjon]

Housekeeping: a few "personal contest" type posts which were off -topic have been deleted to keep the flow running smoothly.

jon