Quote from Grob109:
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Quote from Babak:
This is for swing/position trading
But over the years, I've seen so many examples of stocks levitating with a placid volume line underneath that I'm really beginning to wonder if volume is all that important.
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I've been trading successfully in that timeframe for 5 years. I've never found volume to be a valuable or reliable indicator.
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Babak asks "why". Here is a snippet from two persons of like mind.
The why for both of them is that they have not as yet learned to choose proper universes for making money.
Specifically Babak has chosen to comment on a stock that too large an issue of shares, meaning that the floart is too large for the stock to be responsive to new information. Take information to be applied in the largest breadth of the word.
A rule of thumb for choosing stocks is to consider their beta. I use 3 as a target value. Another rule of thumb is to guarantee liquidity. This is the choosing of a minumum volume value. These two rules of thumb will provide a convenient and rapidly evaluated bracket for volume in the first refinement of a universe selected by stanard quality criteria.
The second person is a "never" type person. Macro posted 8 charts on price and volume stuff. This means in some cases both were intigrated in charts. you see in the effort of macro an exploration of possibilities at the beginning of the exploration.
"never" does not explore. He, instead, identifies with people of like mind and gets confirmation of the space he occupies. His start up period so far is five years. Lets say he has doubled his money velocity on his equity curve three times in the five years and has become a full time trader. With this additional work time not put into trading, he can now get out of the "never" constraint.
Looking at the volume from the P, V relationship point of view would be the least hazardous way to open up the possible path. It will not be harmful since it just broadens a very narrow and limited path so far. For me, it is safe to say that both he and babak can double their money velocity curves at least another three times.
Not using volume to cull universes is a serious ommission. The reason "why" is simply that this fits into the "errors of omissions" category. In several particular fields I engage in, it is prima facia that i have corporate and individual E&O the first moment I go into negotiations for another line of overrides.
So why does babak omit this. In his particualr case the "BIG Why" is primarily at play. He has a gross mistaken understanding of "equilibrium". Respectfully, I recommend to following cure. He should get out the script that this drama called "Equilibrium" came into being. Look at the copyright date on it and then go back from that point in time until the initial idea for writing the script came into being. Along the way backwards note each milestone of development. At some point he verred from the CW path on S&D and its "equilibrium ". Here he needs to drop the curtain and chuck the script. He needs to step back onto the CW path and pay particular attention to the role of volume in S&D. After completing the trip correctly, he should, daily, do a read on S&D in any noteable selection of sources to begin to reinforce and "sleep" on this correct CW. He will recognize that for making money he can drop the "value" stream of thinking permanently.
This new found energy now available for the first time will allow him to consider what macro is do a warm up drill on. "THE BOOK"
I tried to explain , at the same level of inquiry that tokiyo made, THE BOOK. THE BOOK is the leading info on volume and it compliments all the "footprint" historical resitations of Macro.
The "why" for babak is misunderstanding that prevents forward progress. Others have allowed him to face it momentarily and then he says he learned a lot and is finished not dealing with the challange. "Never" has a reinforcing mistaken same thinking ally to keep him comfort able on his space where the path stopped for him.
Tokiyo has, at last, seen THE BOOK and hasn't gotten the vocabulary straight simply because of unfamiliarity. He will learn and profit sometime with someone he hasn't burned the bridge with.
Macro is on a mission. Lots of transient in the start up curve. The picture of it is best seen by looking at pictures. I actually got out an olde file to see how I worked through some stuff.
If Macro were in Rochester working on processing pictures he would be focused on what the picture looks like. His displays are pictures of what it looks like. Lets call them positives. Babak, never, tokiyo and marco all work on positives.
Positives do show quite well what was gong on when the picutre was taken. Actually, the sequence of pictures is like screen displays of positives.
Now, I and not they probably, turn to the meat of the comments.
In Rochester they learned that to sell pictures they needed something to make the pictures from. Or did they?
Land and polaroid,
xerox
DVD
security ID's
beeps
nano
biochemical
and the future stuff to come.
Anyway, at least you see that macro right now needs to look at the opposite of what he is doing. I said that to a lot of people here and it was passed over. no problem
the symmetry of the past and future about the present is like a positive and negative in photography. the positive is the historical record Macro has 8 charts of and THE BOOK is the negative of the future.
No one almost can handle or process the notion that the market is controlled by the smallest group that is disappearing. What if Macro did all the bars coming up after NOW using his 8 charts.
THE BOOK has the data in it. A computer has the ability to iteratively refine faster than humans can sense.
Think of the opposite of a computer running an algorithm on finding anomolies in historical data of transactions. Wouldn't it be a program running on gross input from THE BOOK that is filtered four ways according to the strength and input of the four principal market strategies. After filtering you have the next few bars of volume and, if you need it, price. Updating it every nanosecond would help too.
It turns out for the individual trader this can be done manually if you have something in front of you to sense. This is where KISS comes from simply because the computer is there and it is programmable and may be operated at the highest money velocities known to man. It happens every day.
You need to find out what to look at (it varies rom moment to moment)
You need to be programmed with sufficient truths. (knowledge, skills and experience)
You need to analyze what you see compared to sufficient truths Ride the bike.
And you need to act in a timely manner.
Looks like training DVD's are in order to IMPLANT experiencing stuff. The why is that people simply fight like hell from a vantage point of SAFETY and SURVIVAL....too bad. Thats the why, folks.
