How does a spike in volume not move price?
- Thread starter k p
- Start date
Yes... I do completely agree, and I don't want to imply that I'm looking for THE reason for this move. Simply, I was just curious about how this type of action could occur that really stands out. Some people here, you included, offered great suggestions. I honestly think that lots of people reading have learned from this, so in a way, this thread has done a great job of peeling back a layer. Most of the things I've read here from you and Maverick I really haven't read elsewhere.kp,
I still see you're asking questions. Does that imply you still don't understand that its impossible for you to know the specific answer because there's so many possibilities to the WHY.
You can sit here and name 100 different possible scenarios...discuss each indepth but it will never tell you what specifically happened on your chart at that particular moment when does 600 contracts came through.
The only way you will know "what happen" specifically involving those 600 contracts is if you have a discussion with those specific traders or firms that was involved.
Sometimes a lot of contracts will move price and sometimes a lot of contracts will not move price...it really depends on those involved and the reasons (context) of their trades.
Another way to look at this...you seem to be stuck on trying to discover a "technical analysis reason" when the real reason may not have anything to do with technical analysis (re-read my example of a relative that is an institutional trader paying back a favor). Simply, its very common for price action to move or not move for reasons that has nothing to do with technical analysis.
For example, I remember the market reaction when there was a Bin Laden capture rumor while in a chat room. Within minutes I see posts by traders trying to determine the "technical reasons" why the Emini ES futures move +10 points in less than 1 minute...
Fib TA reason, S/R TA reason, Japanese Candlestick TA reason, Volume TA reason, Indicator TA reason...you name it.
Yet, those stuck on the "technical reason" didn't even know there was a Bin Laden capture rumor released in the market just one minute earlier when George Bush was president. Than when the rumor was verified as false...price action suddenly retraced and guess what...more technical reasons by traders being stated as the reason for the price retracement.
TA is good but if you're trying to use it do define everything...you will consistently miss the boat because its often that price moves or doesn't move due to reasons that has nothing to do with TA.
Develop a trading plan beyond just TA all by itself. If not, understand that price action does what it does due to reasons that has nothing to do with TA.
In a way I'm kind of pissed off that so many people seem to jump on me here for asking a question.. this is what ET is after all about. I'm asking a good question, with a concrete example and posting a chart to even show what I mean. It doesn't get better than this in my opinion. But sadly, I can't help but feel that some of the replies are more confrontational than helpful and I'm kind of turned off now all over again. The replies I hate the most are when people say you're looking at it all wrong, and that's it.
Anyway... maybe I'm just having a pissy morning but each time I come to ET to ask a question, to start what I think would be an interesting conversation, I'm left regretting it. So I will just go back to lurking and leeching from whatever is posted by someone else. Let someone else take the brunt of the negative replies. The funny thing is that in no way was I even talking about my own success or not with trading. I was simply asking about one little bit of price action during a slow part of the day. Sigh....
This is ET. Every time you ask a question, some will be helpful and others will not.
You just can't take it personally when someone thinks you got it all wrong because it really isn't brotherly love here / lets hold hands type forum.
It's the same elsewhere too online in other social media whenever interacting in an anonymous way.
You just can't take it personally when someone thinks you got it all wrong because it really isn't brotherly love here / lets hold hands type forum.
It's the same elsewhere too online in other social media whenever interacting in an anonymous way.
I do actually think its much worse here to be honest. Its funny because when trading, you aren't supposed to let ego get in the way at all. And yet, so many posts here are ego driven, both by guys who are losing I'm sure, but also by guys who are doing well and showing off. There seems to be more testosterone here sometimes than at a UFC fight! LOL
Hi NoDoji,
when you are referring to previous day's high or low, are you talking about the overnight high/low or the previous day's RTH high/low or something else? And how would one go about getting a value for the previous day close for CL as an example? (RTH close? End of day close? Pit close?)
So there are two types of levels? Defence zones and key levels? And are you saying that a stop at the break of the defence zone will rarely get slippage whereas a stop at the break of a key level will probably get quite a bit of slippage?
And what about in a strong trending upmove where you put a buy stop on the last high? Would that be a key level? Is that considered as chasing? What kind of slippage would that incur for the less liquid CL and the more liquid NQ?
Thanks,
and
a Merry Christmas and Happy New Year to you and your family.
For once I don't see this particular measured move you're referring to.
Previous day's levels are whatever you choose to use; I don't trade those levels so I don't know which gets the most attention, overnight levels or previous day's RTH levels.
The point of my post to k p was that there are price levels that served as confirmation of a move in the past and if price comes back to these levels later on, they are likely to get defended resulting in price stopping cold and reversing at those levels.
I personally call them defense zones because I expect them to hold and if they don't, I'm out with a tiny stop loss and because they aren't the sort of key levels that all eyes are watching, there's a lot less (if any) slippage when they fail to hold. I'm not going into any detail about this style of trading because I've mentioned it in the past and if you study price turns very carefully, you'll discover the connections.
I've placed buy and sell stops a tick outside previous highs/lows in a strong trend, but I favor using limit order entries during the pullbacks or stop entries during the pullback/continuation hooks. If those pullbacks don't set up the way I like, then I'll use the stop order entry outside the HOD/LOD at the time.
And a Merry Christmas and Happy New Year to you as well!
I don't think levels matter much when dealing with big traders who need to unload over a long period of time to not move the market. Many (most?) don't ever look at the chart because it's not necessarily a direction trade in the traditional sense.
The line that says "If the offer size is ... or higher" is key. It should clear everything up for you in less than 10 seconds.
The line that says "If the offer size is ... or higher" is key. It should clear everything up for you in less than 10 seconds.