Thunderdog, I agree especially since the theory does not include discussion of bullshit/tapepainting volume. Especially ES, gotta love the 500 lot being bought at the top of the range, and it drops ten points right after. That's either a hedge, bullshit, or a fund trader about to lose his job.
Daytrading- Big Picture and Volume Analysis
- Thread starter EMC2Trader
- Start date
Prof
As you mention, I have taken time the time variable out of my trading equation because of the effective nature of price slowing down or speeding up according to volume (Im ready for the bashing from the cycle users out there..lol, but seriously, I think there is soemthng to cycles, and am simply not smart enough to have figured it out, and maybe my approach benefits from the nature of cycles)
I use the 3 timeframes exactly as you suggest, and they are somewhere close to 5x apart, but not exact, and they work
for now, but I can easily see how you might have to tweak the relationship of your 3 timeframes for any given market.
I dont have to be as precise with my 5-minute big picture structural views, so maybe that is why I have left this timeframe in the standard form many look at. Again, I mostly looking at bracket areas, swing points, consoldiation areas, acceptance, rejection in a rough sense, etc. but I will definetly explore staying consistent with the longer term volume charts as you suggest.
IF you use a single indicator to simply confirm the oscillations you are seeing in the price action of each chart then no tweaking is necessary. One layout works for all markets because price is price. All charts move in oscillations (or cycles) and those oscillation occur at extreme levels and minor levels.
All of the fractal increments I use are exact increments of each other. I have learned over the years that the only way to build confidence in what you see is to eliminate as many of the variables as you humanly can. Build consistency in your charting.
Attached example of Trading Decision Chart
Thunder
I agree with you in the sense I that I have never used volume in a tape reading sense at all, and it can certainly be much more of a distraction than anything else.
I mean I can see when Im in a long trade and price is breaking through highs, how often there are thousands of contracts in the matrix on the ask side, but this has no bearing on how I look to exit or manage the trade at all.. (Although it goes hand in hand with how higher volume at higher prices is often a sign of acceptance of these prices not rejection, but there is still a tug of war from the patient buyers down below, so you dont know how things will play out, nor need to know, to trade sucessfully........
Therefore, the way I put it to use, is that price will continue higher until volume dries up higher, or the patient buyers regain control lower, and that is very much big picture stuff relative to the trading decsions I am looking to make..
So I hope I am not confusing two here......For me, Volume is a useful way to gauge bigger picture conditions for probability puirposes, and not as a micro way to manage trades.
Agreed on that one.
I tried looking at range and volume bars side by side for a few days, seemed to give me x-ray vision after the market closed.
During the heat of battle I was too dumb to process the info fast enough and I dropped the project ... god alone knows why I attempted such a dangerous move in the first place.
As I mentioned earlier, my trail is littered with discarded baggage, volume being one of the casualties.
It is me, I know it is me, I am just too slow to process information that I dont need.
If buyers are on the sidelines passively I need that information as much as a lion needs to know why the warthog will not come down to the watering hole at sundown.
He just concentrates his attention on the thirsty warthogs.
If price is dropping, my trend is sell and my counter trend is buy. The reverse applies when price is lifting.
Entries are always fades to maintain minimum risk.
As the OP mentioned, it is all about thinking in probabilities and this process must be assembled within the mind before a chart is even opened up.
regards
f9
11:00 CST
Ok, so here is a follwup post an hour later.. We knew pateint buyers dried up in the 1240 area, and price needed to go much higher or lower.
It broke lower, and a proper trading plan, coupled with this volume analysis, would have signaled higher probabaility short trades because price needed to move in a new direction.
Now we see the patient buyers are in control, and it is my contention price will have to head lower until either patient buyers dry up, or patient sellers regain control, and this is a cycle that evolves over and over again.....
Ok, so here is a follwup post an hour later.. We knew pateint buyers dried up in the 1240 area, and price needed to go much higher or lower.
It broke lower, and a proper trading plan, coupled with this volume analysis, would have signaled higher probabaility short trades because price needed to move in a new direction.
Now we see the patient buyers are in control, and it is my contention price will have to head lower until either patient buyers dry up, or patient sellers regain control, and this is a cycle that evolves over and over again.....
I may have a look at that after hours one day or on a weekend just to see what it looks like. But I must say that I like the element of time. Further, I specifically want to see what other traders are seeing. Using volume bars will likely change that. But, hey, if it accommodates my setups, then who would I be to argue? And so, I will place this matter in my pending file.
