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Daytrading- Big Picture and Volume Analysis
- Thread starter EMC2Trader
- Start date
FWIW batterup is BIGHOG i was on another computer..
<a href="http://www.sweetim.com/s.asp?im=gen&ref=11" target="_blank"><img src="http://content.sweetim.com/sim/cpie/emoticons/000202C4.gif" border=0 ></a>
PS: Enough of the dribble from ernr something or what ever. Lets see the plan.
http://www.youtube.com/watch?v=Ug75diEyiA0
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PS: Enough of the dribble from ernr something or what ever. Lets see the plan.
http://www.youtube.com/watch?v=Ug75diEyiA0
Quote from Batterup:
Quote from EMC2Trader:
But getting back to your commnet, and others listed in this thread, I still agree that nothing is more important than price when it comes to trading decisions, but on some level you also need an "edge" if you believe trading is a probability game, so volume is something you can add to the mix for this purpose..
>>>>>>>>>>>>>>>>>>>>>>>>>>>
Why are you unable to find your "EDGE" from the most important component as you state? You are saying you could trade with price alone if you had to. Well that begs the question of why are you not able to trade with price alone? I will answer that question for you. The answer is because you do not know how to trade and are looking for the answer from a computer that spits out "INFORMATION OVERLOAD". Sure with todays computers there have been tons of cottage industry sprung up to tell everyone how to trade with all the new goodies. That begs the question: Why are there still so many losers when all the clowns out there have figured out all the answers?
First we are told what works with no actual plan to TRADE with that information. Sounds like we have traveled down this road before.
Have you ever considered to get into the "DIET" industry? The mkt is bigger.
BatterUp
Well since the language in this post sounded familiar, I went back to find this is another one of your names, but again, heres the funny thing....I am obviously new to this board, but I kind of like you!
I have read through many of your posts now, using both names, and it is clear to me you know how to trade- plain and simple.
And it is very possible you have determined a way to trade that is in fact simpiler than everyone else, using just price, and if that is the case thats fine too.
But, for some reason you are very stubborn in your view that your singular price approach is the only way to go, and that anything else at all added to the mix, makes it more complicated, and taking that logic one step further, there is only one correct way to trade....so this is where the disagreement lies.
I would have preferred a response to my view of the handbag example you brought up a few days ago, which as i pointed out, is only half correct.
But keeping it simple as you say, and even if you dont require this for your own trading, if nothing else, perhaps you can see that by looking at price and Volume together in the correct way (see the handbag example of how they in fact do work together) , this can be an effective filter for selecting trades with an edge, and then taking on good trade mangement from there.
By your very admission the retail manager decided to lower price because the Handsbags werent selling at $5000.97. This means "volume" (lack of it) determined where to move price. Then price movement down brought in more volume as you state. But can you see how the two go hand in hand, and there are two sides to your example.
Then I pointed out an example, where lowering price, actually brought in less volume , because the price was such a bargain, that demand drove price quickly up again, and the higher price continued to generate the higher volume!
There is nothing complicated about this, and therefore it shows that every price has a larger context. An ES price of 1250 on the way up with heavy volume up above, is much different than an ES price of 1250 on the way down, after no volume was found above.
You seem to put price in context with just price, perhaps with multiple timeframes, which is fine, and what I look at too, but there is a very simple way to look at volume that in effect makes you the retail manager in a store with a product that is either selling or isnt selling, and for this purpose alone it can add great value in a very simple way, to help you select and manage trades, no different from a retail manager who selects and manages inventory according to how well this inventory is selling or not.
Quote from Batterup:
Quote from EMC2Trader:
But getting back to your commnet, and others listed in this thread, I still agree that nothing is more important than price when it comes to trading decisions, but on some level you also need an "edge" if you believe trading is a probability game, so volume is something you can add to the mix for this purpose..
>>>>>>>>>>>>>>>>>>>>>>>>>>>
Why are there still so many losers when all the clowns out there have figured out all the answers?
First we are told what works with no actual plan to TRADE with that information. Sounds like we have traveled down this road before.
Have you ever considered to get into the "DIET" industry? The mkt is bigger.
Batterup.
(1) I will tell you one reason there are so many who have a hard time with trading, including myself early on...They do not have a detailed trading plan, that is simple enough, and proven enough, to provide them with the confidence to stick with the plan over and over again. I feel discipline in trading is the hardest part, the plan is the easiest part. The reason discipline is so hard is mutlifaceted but hear are a few reasons (1) As traders we have the ability to set our own rules- this is a blessing and curse. Its a blessing in the sense that we can change our bets before the game is over so to speak. Imagine betting $100 on the Lakers, and at halftime with the Lakers down 25, you can pull the bet and get $90 back. So the blessing is we can cut losing trades and let winning trades run (wouldnt it be nice to bet $100 on the Lakers, and when they win in a blow out, you get $500 dollars back) Maybe, I should have used Celtics in my example...haha
But this blessing can also be a curse, because we have the ability to change these rules to hurt us in the same way.
Another reason discipline is so hard, is because most of us arent programmed to think in probabailities.. This means, even taking the correct small loss (the $10 Laker bet loss), can shake our confidence that our approach really works, and this can hurt us going foward from a discipline standpoint to take the next trade.. I dont think many ever discuss how even taking the correct small loss makes it hard to trade if you dont have the right probabaility mindset. And we all know how large losses will kill you in this game.
But in the end discipline starts with a plan, a plan for entry, a plan for managing trades, and plan for exit, but the plan isnt the only thing- because there is the hardest part of all, consistently carrying out your plan......We all spend so much time focused on the plan, which is ok, cause it has to be in place, but I contend the plan part is pretty easy, and it is much more the ability to stick with a plan that results in traders a having a difficult time.
(2) Regarding my plan to trade the information I present, I actually go above and beyond most others in the sense, that I list every single trade my plan generates, and present a continuing and ongong track record of this performance for everyone to examine, so I am not here to trying to post all this stuff out of thin air, because I actually do tie it all together into a very definitive trading plan where I post every single trade the plan generates day after day.
(3) Regarding the diet industry.. Like I read in one of your earlier posts, I too am a former baseball player (not wrestler, so Im glad we are debating in print..lol), and fortuntely I continue to remain in reasonable shape after all these years, so Ive havent had the need, and certainaly dont have the expertise, in the diet area.
I kind of know a little more about trading, so thats where I tend to put my efforts....
Quote from Thunderdog:
What time frame do you rely on? I am in general agreement with you regarding volume, but since I presently follow sub-one-minute charts, I'd like to get a bit more perspective on your views.
Thunder.
I use the ES 5-minute chart spread out over several days for my bigger picture views, with only day-session data, cause I like to see how the gaps fall into the bigger structure picture.
Then, for trading decisions I look at 3 timeframes together, each stepping up about 5x from each other... I do not use time bar charts, but volume share bar charts, and tick charts only.
The shortest timeframe does work in sub minutes, and I use this timefreame to both time entries according to larger structure setups, and to exit winning trades in as precise a way as possible according to a trailing exit approach in my larger timeframe.
Again, to me, price action is fractal in nature, and any given timeframe is made up of all movements in lower timeframes, so I try to put this all to use in a logical way.
7-14-08 10:00am CST
Here is just a quick update realtime for what is taking place in the market. The 1255-1240 bracket was identfied yesterday...You can see how price has moved from one end of this bracket to the other so far this morning. This alone could have helped you with certain trading decsions according to your trading approach.
Then, you can see how volume has begun to dry up at the bottom of this bracket. This means the pateint buyers are drying up here, and are now located way below this area, so either they will win the tug of war and price will go much lower, or they the will grow more an more anxious if price moves up.
The main point for now, is the patient buy orders are no longer in the 1240 area, so this will lead to much lower of higher prices from here in the bigger picture outlook, and of course you can say price will go higher or lower from any given price, but in this case there is a much larger context of what is going on when price either moves up or down from here.
Here is just a quick update realtime for what is taking place in the market. The 1255-1240 bracket was identfied yesterday...You can see how price has moved from one end of this bracket to the other so far this morning. This alone could have helped you with certain trading decsions according to your trading approach.
Then, you can see how volume has begun to dry up at the bottom of this bracket. This means the pateint buyers are drying up here, and are now located way below this area, so either they will win the tug of war and price will go much lower, or they the will grow more an more anxious if price moves up.
The main point for now, is the patient buy orders are no longer in the 1240 area, so this will lead to much lower of higher prices from here in the bigger picture outlook, and of course you can say price will go higher or lower from any given price, but in this case there is a much larger context of what is going on when price either moves up or down from here.
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Quote from EMC2Trader:
I use the ES 5-minute chart spread out over several days for my bigger picture views, with only day-session data, cause I like to see how the gaps fall into the bigger structure picture.
Then, for trading decisions I look at 3 timeframes together, each stepping up about 5x from each other... I do not use time bar charts, but volume share bar charts, and tick charts only.
The shortest timeframe does work in sub minutes, and I use this timefreame to both time entries according to larger structure setups, and to exit winning trades in as precise a way as possible according to a trailing exit approach in my larger timeframe.
Again, to me, price action is fractal in nature, and any given timeframe is made up of all movements in lower timeframes, so I try to put this all to use in a logical way.
Try this:
Instead of using a 5 minute chart spread out for big picture view, use a slower (larger increment Volume Bar Chart fractal). Reason: Volume Bar Charts eliminate the noise because they eliminate the variable of time in your chart. Try not to use minute charts for anything where a Volume Bar Chart can be created. Only use a Tick Charts for a pit traded instrument because Volume Bar Charts aren't available.
3 timeframes are fine but try increments of 7 and not 5. Fractally 5's create problems. Use the fastest ONLY for entries and exits, the next slowest for your trading decisions and lastly, the slowest or largest increment as your view of immediate STRENGTH or immediate Momentum. This way you can lay out any set of charts for Intraday, Swing or Longer Term trading.
Scalping is just speeding up the increements to a tolerable increment.
Price action IS perfectly fractal in nature.
Well, perhaps I am insufficiently nuanced, but I have yet to benefit from volume analysis in my trading. As I had previously noted in other threads, I relied on volume in the past in one form or another. In so doing, I found that volume analysis occasionally prevented me entering what would have been losing trades. However, it also occasionally prevented me from entering what would have been profitable trades. On balance, in the fullness of time and in my own experience, I did not see a net benefit in using volume as a variable in my trading. Therefore, I discarded it.