For the Mini's does volume matter?

[Jdesey]

Hmmm...something is missing from this story.

The chart you've attached is a chart of regular trading hours. In contrast, you're actually talking about trading the 2 hours before the the regular trading hours.

Lets start with the chart you posted. Its a simple question...why are you missing trade signals during the regular trading session so early into the regular trading hours ?

Also, your question is basically comparing the few hours "before" the Open versus the time span "after" the Open.

Therefore, due to the fact you're using "volume" as part of your trade method with a threshold needed to be 2k and above...maybe backtest any volume threshold changes instead of using "hindsight analysis" about price actions that "could have" generate nice profits considering you didn't mention any data tests about the impact on your trading results had you use volume thresholds LESS than 2k (e.g. 1k).

Back to the missing trade signals story. Is it possible you meant to say if you were using a LESSER volume threshold...you wouldn't be missing those trades that "could have" resulted in nice profits ?

If so, what about the trades with a LESSER volume threshold that resulted as a loss ?

That's a question you can easily answer via backtesting instead of using "hindsight analysis" to say to yourself...wow, I could have got this and that.

My point, you're NOT missing any trade signals as to imply you weren't at your computer or too busy doing something else while trading. Instead, your trade method specifically doesn't give you a trade signal that you see in "hindsight analysis" and you're using "hindsight analysis" to make adjustments to your method so that it can catch those good looking trades instead of just backtesting any volume adjustments as a criteria to give you a reality view of the "hindsight analysis".

Last of all, due to the fact the volume "before" the Open tends to be lower than the volume of the regular trading session...have you consider using a different trade method with a LESSER volume criteria in the "before" the Open trading session ?

If so, you can backtest that too to determine your trade results instead of asking strangers about adjustments to your trade method that they know very little about except that volume is a criteria in your trade method.

Let's just forget I mentioned it to our Chicago opens. It's not relevant to the discussion. Yes you are correct what I mean to say is that if I had a lesser volume criteria or even No volume criteria there's trades I would now take. I am back texting as fast I can , but that will probably not be complete till weekend.
So far it looks good.

 

[wrbtrader]

Let's just forget I mentioned it to our Chicago opens. It's not relevant to the discussion. Yes you are correct what I mean to say is that if I had a lesser volume criteria or even No volume criteria there's trades I would now take. I am back texting as fast I can , but that will probably not be complete till weekend.
So far it looks good.

Understood. I wouldn't worry about trade signals that "I could have taken" had I used a different volume criteria unless the change has actually been backtested.

What time zone are you in and what chart interval is that chart you posted ?

I know you mention Chicago CT but I'm not sure if you're actually trading from that same time zone because I've seen others located in Europe while doing the same...saying Chicago time zone to correlate with the fact the Eminis are from Chicago.

 

[Jdesey]

Understood. I wouldn't worry about trade signals that "I could have taken" had I used a different volume criteria unless the change has actually been backtested.

What time zone are you in and what chart interval is that chart you posted ?

I know you mention Chicago CT but I'm not sure if you're actually trading from that same time zone because I've seen others located in Europe while doing the same...saying Chicago time zone to correlate with the fact the Eminis are from Chicago.

I'm in California. But all my charts and tracking is CST

 

[wrbtrader]

I'm in California. But all my charts and tracking is CST

Thanks and I was able to determine your chart is the 3min chart.

 

[HobbyTrading]

Yes you are correct what I mean to say is that if I had a lesser volume criteria or even No volume criteria there's trades I would now take. I am back texting as fast I can , but that will probably not be complete till weekend.
So far it looks good.

Why are you using a volume threshold? Is this part of your strategy? Or are you afraid that your orders won't be filled (or filled with a large slippage)?

 

[Jdesey]

I created a volume threshold to reduce the number of trades and I felt that volume was an indicator of the strength of the move. Therefore I felt I had more solid entries for my trades.
I am now questioning that rationale

 

[HobbyTrading]

I created a volume threshold to reduce the number of trades and I felt that volume was an indicator of the strength of the move. Therefore I felt I had more solid entries for my trades.
I am now questioning that rationale

I see. In case you still would like to use volume you could replace a fixed value (e.g. 3000 per bar) by a value based on the preceding time period (e.g. preceding x bars).

 

[Sprout]

I created a volume threshold to reduce the number of trades and I felt that volume was an indicator of the strength of the move. Therefore I felt I had more solid entries for my trades.
I am now questioning that rationale

Having a volume threshold is a very good step to eliminate one of the most riskiest areas to trade. As Tiddlywinks suggested, the volume during RTH is of a different quality than overnight. Volume during lunch hr is different than the opening or closing hours.

Session volume is different then that of a Dominant price move with Increasing Volume that starts a trend. The first is a time fractal. The second operates on different fractal dimension than time.

The study of volume will explain a lot of things that PA cannot. Generally only after one realizes this, they are missing something or that there is another context that describes market activity more accurately.

Lot's a PA trader's talk about edge but really have no idea what it is. In this context you have created an edge - a line in the sand. Once you have your 'edge', that determines if and when you trade.

You've defined your edge now follow through with inquiry to it's natural conclusion. Is this true in this context? Is this true in another context? Is this true is all contexts? Are there exceptions to this?

Unless you are annotating and logging, you are not building a resource to return to that can give you answers.

If you rely on memory only, ok, that's certainly a way, if just has severe limitations and handicaps.

 

[algofy]

I believe volume is always important I'm one way or another.

 

[Jdesey]

Yes, I journal every trade, it is very valuable to look back at what I did and what I was thinking...

for now, I have decided to lower the threshold to 3,000 CAR for 2 bars... it just feels a little crazy to have no volume rule at all. I still believe that volume does matter.