ES Journal Archive (2009 - 2010)
- Thread starter Jahajee
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Sal pulled out and working another real time chat. PM him for additional info.
If it is a melt up day, then it is a funny one. 11 pt range only.
Quote from satchel:
924!
(940 to press the shorts today)
Nice!
28-30 would be normal day range expansion target.
Still adding to that 900.75?
I was asked to post an example of how volume can AT TIMES provide an edge over trading without volume.
(By "at times" I mean you must learn when a quality signal is presenting itself. Like all trading you learn to distinguish the good from the weak signals)
As B1S2 is swing trading I have taken an example of the daily chart for this bottom. There are a number of approaches that gave an expectation of a major reversal and a bull move but I am going to look specifically at volume to see how it reads.
The move that is enclosed within the "bubble" moves down from a minor reversal to the red bar low with the "X".
The question is, could we anticipate a STRONG reversal and buy the double bottom low? Or buy the break above the red 'X' bar expecting a run? Or is the market more likely to make new lows?
Moving within the "bubble" to the low the last 4 green bars all have increasing buying interest while the the red bars all have decreasing range but increasing volume.
You would expect increasing volume to increase the range of some of the bars under normal circumstances, but at the low the red with the highest volume is the smallest range of the last 3 red bars, it has big volume and all the red bars showed progressive range contraction with increasing volume.
However the smallest green has the biggest volume of the last 4 green bars and buying has consistently increased.
So we have a pressure point where the selling is increasing and the buying is increasing and range decreasing. This tends to be where Smart Money sell out to Dumb Money and buys at the lowest cost. It's called a Change of Hands.
The red "X" bar is the test. It didn't take out the low and selling is lower that the prior 4 selling days. If sellers were interested they would be likely to move the market down.
Volume is warning the whole emotion of the market is changing and it looked like buyers were going to run the market. It's a heads up on strong move before PA has signaled allowing aggressive trading at the lows with a tight stop.
Without volume of course you could still buy the lows, but without the same confidence or expectation of what probably lay ahead.
If you work back through all of these bars on this chart you will see the signals are consistent with this approach just as the next will be. There is nothing rigged - it's a classic signal.
Volume can AT TIMES add to the picture and provides quality information but you can trade without it and it takes time to learn all the moves.
There are absolutely times when volume does not add anything to the decision making process.
(By "at times" I mean you must learn when a quality signal is presenting itself. Like all trading you learn to distinguish the good from the weak signals)
As B1S2 is swing trading I have taken an example of the daily chart for this bottom. There are a number of approaches that gave an expectation of a major reversal and a bull move but I am going to look specifically at volume to see how it reads.
The move that is enclosed within the "bubble" moves down from a minor reversal to the red bar low with the "X".
The question is, could we anticipate a STRONG reversal and buy the double bottom low? Or buy the break above the red 'X' bar expecting a run? Or is the market more likely to make new lows?
Moving within the "bubble" to the low the last 4 green bars all have increasing buying interest while the the red bars all have decreasing range but increasing volume.
You would expect increasing volume to increase the range of some of the bars under normal circumstances, but at the low the red with the highest volume is the smallest range of the last 3 red bars, it has big volume and all the red bars showed progressive range contraction with increasing volume.
However the smallest green has the biggest volume of the last 4 green bars and buying has consistently increased.
So we have a pressure point where the selling is increasing and the buying is increasing and range decreasing. This tends to be where Smart Money sell out to Dumb Money and buys at the lowest cost. It's called a Change of Hands.
The red "X" bar is the test. It didn't take out the low and selling is lower that the prior 4 selling days. If sellers were interested they would be likely to move the market down.
Volume is warning the whole emotion of the market is changing and it looked like buyers were going to run the market. It's a heads up on strong move before PA has signaled allowing aggressive trading at the lows with a tight stop.
Without volume of course you could still buy the lows, but without the same confidence or expectation of what probably lay ahead.
If you work back through all of these bars on this chart you will see the signals are consistent with this approach just as the next will be. There is nothing rigged - it's a classic signal.
Volume can AT TIMES add to the picture and provides quality information but you can trade without it and it takes time to learn all the moves.
There are absolutely times when volume does not add anything to the decision making process.
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