Did you backtest this ? Anything you can say about the backtests ? Or better did you trade going forward this ? Any results you can share ?
How predictive is volume to index futures?
- Thread starter ninZa.co
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I would not call it predictive;
slight exceptions in related markets, liquidity leaders + liquidity leader has notable better volume.
Maybe more important in cash markets like copper+ other cash markets;
but not predictive. [Even more important I would never want to do any kind of volume with market on close in cash metals]
Volume is an independent variable. Is it predictive? Well that depends on what you’re looking to predict, but I wouldn’t suggest using it for predicting anything.
Every chunk of price information has an associated volume. Therefore, volume is essential for gathering a complete data set upon which analysis can be done and trading decisions made. Volume can be highly informative of price at certain stages of a trend, specifically at end effects.
To make volume useful, it needs to be calibrated and periodically recalibrated to changing market conditions. Think of it as “clocking” the market.
Every chunk of price information has an associated volume. Therefore, volume is essential for gathering a complete data set upon which analysis can be done and trading decisions made. Volume can be highly informative of price at certain stages of a trend, specifically at end effects.
To make volume useful, it needs to be calibrated and periodically recalibrated to changing market conditions. Think of it as “clocking” the market.
Try Youtube videos by keyword "trade by matt". He posts live trades for free each day and he uses CDV. For myself, I use it as a confirmation for breakouts. Of course , this is not a magic tool.
Can you please elaborate?
I absolutely use volume in my analysis of ES
I’m pretty sure @tiddlywinks and @Sprout rely heavily on it as well
I’m pretty sure @tiddlywinks and @Sprout rely heavily on it as well
- Volume and price increasing, probably should be long
- Volume increasing and price decreasing, probably should be short
- Everything else, be ready
Market pace. Values need to be adjusted to reflect market conditions. Adjusted twice in 2020 which was a rare occurrence. Once in 2022 and once this year.
A relativistic oscillator can be used for the initial calibration. I use a stochastic on 5m bars to determine a value for fast pace. Slow and medium are derived from fast pace. For DU and extreme I use the eyeball method.
I do use volume in automated scalping/day trading, but most likely differently than most. Lulls mean nada, not looking for accumulation or distribution but it looks for abnormal sequences. What I believe is larger trader(s) getting in/out, by monitoring several systems many use, clues of dumping contracts occurring. Larger traders look to take out meat of a trend and not last tick. Many larger traders accumulate size in profitable trades so as not to give away their intentions.
Market profile I believe better in Stocks than futures, at least for me.
Market profile I believe better in Stocks than futures, at least for me.