ask volume vs. bid volume - does it matter?

[IronFist]

Does it matter whether bid or ask volume is higher for a given bar on a chart? I know some people say volume is useful... does it matter if it's bid or ask volume? Or does bid vs. ask just really only tell which side the MM felt like hitting.

In other words, say you've got price and volume on your chart and there's a steady uptrend and then you see the most recent bar has like 10 times as much volume as the rest. That could be significant.

Ok now you're looking at that same chart but this time with bid/ask volume. You see there's that same huge volume spike but it's 90% bid volume.

Same thing except it's 90% ask volume.

Same thing except it's 50/50 bid/ask volume.

Do you care? How would your interpretation of price action change in these cases?

 

[EdgeHunter]

http://www.elitetrader.com/vb/showthread.php?s=&threadid=162563

I thought this was a very good thread that covers this subject in dept... CDV... Ask Traded Volume verus Bid Traded Volume...

also know as CDV = Cumulative Delta Volume..

(Previous CDV was just a generic term until TT (Trading Technologies) has now decided to Patent even this term (like the DOM)...as if they discovered it first... :eek: -


HAVE STOP <img src="http://www.enflow.com/p.gif"> WILL TRADE

 

[Don Bright]

Us "old tape readers" - understand that "price moves to size" - and that the MM's and Specialists get paid for execution vs. trading these days.

Now, the added wrinkle is that there are so many "non-displayed" orders (iceburg, Hidden liquidity pools etc.)... so, if you think about it, "they" wouldn't display large quantities unless they felt that there was a strong buyer present.

FWIW,

Don

 

[CET]

There is too much smoke and mirrors going on with Level 2 bid and ask volume these days. I no longer watch it. I only watch the volume of the actual trades and whether it was on the bid or ask.

 

[jjf]

Quote from CET:

I only watch the volume of the actual trades and whether it was on the bid or ask.

that will tell you less than you can imagine.

 

[CET]

Quote from jjf:

that will tell you less than you can imagine.

It works just fine for me. Some people aren't able to follow it. I guess you are one.

 

[Coolie]

I am one of those who can't read it, could you please enlighten me?

 

[IronFist]

if price moved to where the volume was then whichever side of the DOM had more orders, price would go there. obviously thats not the case

but my question was about bid vs ask volume as an indicator, eg., showing how much of a bar was at the bid vs how much was at the ask. i wasnt talking about open orders or DOM or Level 2 or anything else like that.

 

[shikantaza]

Quote from EdgeHunter:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=162563

I thought this was a very good thread that covers this subject in dept... CDV... Ask Traded Volume verus Bid Traded Volume...

also know as CDV = Cumulative Delta Volume..

(Previous CDV was just a generic term until TT (Trading Technologies) has now decided to Patent even this term (like the DOM)...as if they discovered it first... :eek: -


HAVE STOP <img src="http://www.enflow.com/p.gif"> WILL TRADE

Interesting, if true.

 

[jjf]

Quote from CET:

It works just fine for me. Some people aren't able to follow it. I guess you are one.

I was just passing a thought on to you.
In this moment it obviously doesn't matter to you, but if you ever begin trading a real account, you will learn the hard way.

jjf