does volume head price or price lead volume?
- Thread starter commanderco
- Start date
Mark, this is yet another really good post. It brings to mind the seasonal tendency you mentioned in the DOW, I believe it was, several months back and it responded as you projected. Thanks for continuing to post on ET.
I did a search on google for volatility analysis and I found info on ATR. Is that the direction you were referring to?
Volume is nice but who has the "control" within that volume......I like to watch the "conviction" of the volume to base my trades from (using intra-bar market delta)..........
http://www.charthub.com/images/2007/01/21/ES_317_VB.png
Mark
Thks for your inputs. I think you understand a debate is not supposed to be about who is right or wrong but more as an informational exchange that both sides might gain knowledge. Many that post feel better to lean to argumentive side because someone like myself is able to rattle their feathers with some hard and true facts. I understand some are not able to grasp factual methods and or tactics because they are driven by their beliefs and not from actual experiences in the mkt. I myself would rather like to think i am helping them through the darkness. (that will ruffle even more feathers), HA
OK, to the reason i decided to respond to your post. You stated: ...........My answer...best to spend your time determining what really moves prices and when it tends to occur.
I ask you WHY worry about reasons? Who cares what causes prices to move? When it tends to occur is mox-nix also, correct? Myself as a breakout trader, and all the other breakout traders ...we all know in advance WHERE it will happen. We all know it will happen, it will happen when prices move off the dime.
Knowing why and when is not even a possibility until after the fact. Again, i emphatically state, price is the answer, price moving off the dime wins above all else. Anyone that wants the truth need simply reread posts about price leads, volume follows. I.. rest my case.
Bears WIN, sloppy but a win.
Thks for your inputs. I think you understand a debate is not supposed to be about who is right or wrong but more as an informational exchange that both sides might gain knowledge. Many that post feel better to lean to argumentive side because someone like myself is able to rattle their feathers with some hard and true facts. I understand some are not able to grasp factual methods and or tactics because they are driven by their beliefs and not from actual experiences in the mkt. I myself would rather like to think i am helping them through the darkness. (that will ruffle even more feathers), HA
OK, to the reason i decided to respond to your post. You stated: ...........My answer...best to spend your time determining what really moves prices and when it tends to occur.
I ask you WHY worry about reasons? Who cares what causes prices to move? When it tends to occur is mox-nix also, correct? Myself as a breakout trader, and all the other breakout traders ...we all know in advance WHERE it will happen. We all know it will happen, it will happen when prices move off the dime.
Knowing why and when is not even a possibility until after the fact. Again, i emphatically state, price is the answer, price moving off the dime wins above all else. Anyone that wants the truth need simply reread posts about price leads, volume follows. I.. rest my case.
Bears WIN, sloppy but a win.
Mark's post sent me off searching too...
found this...
http://www.traderslog.com/volatility-analysis.htm
i hope Mark can post a few URL's for reading and searching this subject he brought up...
cj...
HAVE STOP <img src="http://www.enflow.com/p.gif"> WILL TRADE
Quote from EdgeHunter:
Mark's post sent me off searching too...
found this...
http://www.traderslog.com/volatility-analysis.htm
i hope Mark can post a few URL's for reading and searching this subject he brought up...
cj...
HAVE STOP <img src="http://www.enflow.com/p.gif"> WILL TRADE
I googled that one too but I am intersted in intraday analysis and cant find much on that. Im pretty sure Mark is an intraday trader so am curious what type of stuff he is using.
ATR and BBands can be used intraday too... on any time period...
but if Mark is in the building... more info would be great...
cj...
HAVE STOP <img src="http://www.enflow.com/p.gif"> WILL TRADE
Markets work on supply and demand. Volume is the key. It is true that it is usually misunderstood, however, that does not diminish its value.
Just a couple of thing to see in the chart below.
1. First, on the 30 min. Most people see this wide spread bar on heavy volume and assume that there was selling. However, VSA tells us a different, more correct, story. If this bar had been selling, then why is the next bar up? The reason it is up is because the Professional money was BUYING into the herd selling on that bar. Professional money trades with large size and thus needs to Buy into down bars , or Sell into up bars, so as not to effect the price adversely against themselves. Therefore, weakness will appear on up bars and strength will appear on up bars.
2. On the 10, take a look inside the grey circle. First we see a red circle on the first bar with the double arrow. The volume here is high and price closes near the high. Again, what happens on the next bar? Price falls. If there had been buying, then why did price fall on the next bar?
This is where it gets interesting. Yes, price did fall the next bar, but look at the range. The range is narrow. Something is supporting the price. A trader can tell the bullishness/bearishness of the Market Makers by the range of the bar. They See buy orders on the books, and thus expect higher prices. Hence they are willing to keep the spread narrow as the herd sells on that bar. The next bar is the key. The bar opens at the high, trades lower, than close on the high. This is a test bar. The professionals are testing for sellers. Now look at the volume. It is very low. It is lower than the previous two bars and less than the average. There are no sellers underneath. So while, some supply did enter on the bar with the red dot, it is quickly swamped by demand on the next bar, and then they test for more supply and find none. Price now rises.
If you're not looking at Volume, Spread, and price, you are not looking at the whole picture. Volatility, like all technical analysis, may tell you when price will move. Fundamentals may tell you why price will move. Volume Spread Analysis tells you both when and why price moves.
Just a couple of thing to see in the chart below.
1. First, on the 30 min. Most people see this wide spread bar on heavy volume and assume that there was selling. However, VSA tells us a different, more correct, story. If this bar had been selling, then why is the next bar up? The reason it is up is because the Professional money was BUYING into the herd selling on that bar. Professional money trades with large size and thus needs to Buy into down bars , or Sell into up bars, so as not to effect the price adversely against themselves. Therefore, weakness will appear on up bars and strength will appear on up bars.
2. On the 10, take a look inside the grey circle. First we see a red circle on the first bar with the double arrow. The volume here is high and price closes near the high. Again, what happens on the next bar? Price falls. If there had been buying, then why did price fall on the next bar?
This is where it gets interesting. Yes, price did fall the next bar, but look at the range. The range is narrow. Something is supporting the price. A trader can tell the bullishness/bearishness of the Market Makers by the range of the bar. They See buy orders on the books, and thus expect higher prices. Hence they are willing to keep the spread narrow as the herd sells on that bar. The next bar is the key. The bar opens at the high, trades lower, than close on the high. This is a test bar. The professionals are testing for sellers. Now look at the volume. It is very low. It is lower than the previous two bars and less than the average. There are no sellers underneath. So while, some supply did enter on the bar with the red dot, it is quickly swamped by demand on the next bar, and then they test for more supply and find none. Price now rises.
If you're not looking at Volume, Spread, and price, you are not looking at the whole picture. Volatility, like all technical analysis, may tell you when price will move. Fundamentals may tell you why price will move. Volume Spread Analysis tells you both when and why price moves.