Volume

options

Senior member
Price action is the leading indicator

Volume can and does get distorted.

If you think about it. If volume was displayed correctly you would only have to buy on the 'blue' bars and sell on the 'red' bars to make consistent profit. (Scalping/short time frame trading.) There is a 'time effect' lag/prediction attribute to it.
You can't allow for the 'waiting' orders and the sudden 'spikes'.
So would a view over weeks and months pay off better than trading on a 5 min time frame. (Let it settle down.) But much deeper pockets needed.

And you can never gauge market sentiment. You may think you can, but you can't. The closest you will ever get is a second guess.
If you knew what all the big players for any given market had done for the last 3 months and knew what they were going to do for the next 3 weeks, then you would have a chance. You would also have to keep an eye on the ancillary markets to further weight that view.
And so it stretches out like a ripple or a spider's web.

If anyone can get these 3 things down pat. they would be millionaires within a couple of months.

Answer?

Follow price action and support and resistance where your historic parameters have already been disclosed. History repeats itself.
Just be prepared for when it does not.
 
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Options, i only deal with NasFuts, whats the difference between volume and price action? I thought they were one of a kind ( in a way).
 

mikeak

Newbie
Hi,just found this site,first post.I've recently become interested in the eurex and forex markets.I live in Alaska and the U.S. markets open at 5:30 am.A disgusting hr. for anything not involving a firearm or rod.I can trade the above at what I consider civilized hours.Went a long way around but just wanted to say I agree with options about price action and investor/market sentiment.I use only price and s/r zones with the occ.use of fib levels that I fit to the charts,I've tried a lot of indicators but found them not reliable or it could be that I'm not bright enough to use them.
This is a great forum,the thing that jumps out is how civlized you all are to each other,much diff. than what I've seen elsewhere. Thanks Mike
 
Mikeak, dont let the membership level of this forum mislead you, im apparently a senior member, but i can assure you i am not a senior trader, ive only just started ( trading wise!).
 

options

Senior member
Over a longer period of time you are better able to incorporate volume into the assessment. But that is 70 % hindsight trading. Bring that forward to the moment. Up to 5 min trading, and that volume assessment goes out of the window somewhat and becomes a seat of the pants job into price movement. (Because you get too close to the action.) Take it to a 1 min chart and you will be up and down more often than a prostitutes knickers.

It's all dependant on your chosen time frame.

But I would offer that if you do not know the difference. Trade very very carefully until you find out.

Mike:

Welcome aboard.

Have a look at Newtron Bomb's forex thread. If you haven't already done so.


"This is a great forum,the thing that jumps out is how civilised you all are to each other,much diff. than what I've seen elsewhere"

Well the last few weeks have been a bit of a brawl on some points. But pleased to say that the site is getting back to normal again.
Enjoy what there is to offer.

by the way what's the weather like in Alska?
Yes I know it's an English pre occupation. But Alaska always conjures up visions of snow and huskies, and steaming log fires.
 
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options

Senior member
Mike.

By the way, you can avail yourself to some good moves on the eur/usd from 6.00 am or so, gmt, till about 9 am.

Don't know the time difference. But it might be late evening or so for you.
 

options

Senior member
P.

It applies to all time frames.

It is easier to spot (predict) over the longer time frame. But as said before. You will need deeper pockets over the longer framework.
 
Options, let me guess! Your a day trader! ( nothing wrong with that), but its not the be all and end all of trading.
 

Grey1

Senior member
Basic rules of Supply and demand against price action :--


Volume going UP Price going UP Then BULLISH SIGNAL
Volume going DOWN Price going UP Then BEARISH SIGNAL

Volume going UP Price going down Then BEARISH SIGNAL
Volume going DOWN Price Going down Then BULLISH SIGNAL

 

mikeak

Newbie
Thank you!
Options,We are 4 hrs behind new york,I believe -9 gmt?,I think eur. markets opem 10:00pm our time (AK) which suits me just fine,we're in the dark part of the year and I'd rather trade at night than in whats supposed to be daytime.I also have turned to daytrading more a result of fear of holding overnight as anything else. No native stops on Globex.
Re: weather,Yes we have a little snow24 to 30 inches on the ground,had to shovel the roof last week,it was little chilly last week, arond 20-25 below,warmed up a good bit though,up to 10 above now,break out the shorts.Lots of dog teams around now as local mushers training for Iditarod and other races.They frequently have to fight with the moose for use of trails.
Sorry for getting off subject.As far as indicators go I think whatever works for someone is what they should use.What works for me may not suit another at all,whatever one has confidence in they should use.I don't know how you could monitor it but if
e had an indicator for investor sentiment thats all I would use
Thanks Mike
 

options

Senior member
Lol!
P.

I never said it was. And I am not.

I am whatever I have to be.

To be honest, yes you are correct. I am drawn to scalping or short term moves (indices)
I am also falling quite nicely into longer term fx trades. Although if I have to day trade those, or minute trade them I will. But the spread is the same as sb'ing so does not bode well for scalping.
Though it does have its' moments :))

Adaptability is the key. If you were a buy and hold person 20 years ago, you could have made bundles. Scalper 10 years ago. Bundles.

So what works now?
Long term?
No.
Scalping?
Not as it was.
Mid term then?
Who knows.

I have said before. All my trades start off as a one minute trade. (Or less) If they grow. Then great. I'll roll it. If not I'll kill it. That simple. The hard part is knowing when.

The learning process, (over all time frames), comes when you enter a trade, it goes into profit. (Whey hey.) Then it reverts (Boo.)
And you end up losing!

And I offer again. That when that has happened on a few or more occasions you develop an 'instinct'.

Follow that instinct above all else. It will be right more times than not.

If it isn't. Don't trade. Simple.

Actually. No I'm wrong. Do trade I want your money! :)
 

options

Senior member
Grey 1.
Thanks for that. And I agree with that more than you know. Apart from the last one.
But I still say. It's down to your own particular choice of time frames.

"Volume going UP Price going UP Then BULLISH SIGNAL
Volume going DOWN Price Going down Then BULLISH SIGNAL"

As an extract from your post, then that cannot make sense.

Although having traded from the first 3. I know where you are coming from. The last one I am having trouble with. Maybe that's why I don't put as much stead in volume as I used to.

Trying to scalp on a one minute time frame. Sometimes the volume was spot on and other times you were wrong footed.

I know you are a skilled trader using vwap, but all those equations leave me brain dead. If there was a software thing for it then great. but until then. I will rely on me.

Thanks again.
I will find out more about it in time.
 

Grey1

Senior member
Thanks Option,
Quote "
Volume going UP Price going UP Then BULLISH SIGNAL
Volume going DOWN Price Going down Then BULLISH SIGNAL" "


Does seem irrational but it is not . it is told volume can,t go to zero ( No market participant ) but can go to infinity .. This is why on both falling and rising price the signal becomes Bullish..

An excellent book on volume analysis is "TRADING ON VOLUME " by Donald Cassidy
 

barjon

Legendary member
Grey1 said:


Volume going DOWN Price Going down Then BULLISH SIGNAL" "


mmm, market does tend to fall under its own weight when
volume activity falls away (to below average and worse). So I'd
tab it "uncertain" rather than bullish until I saw direction when
volume picked up.
 
 
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