Is volume analysis useful in index futures?

[Xela]

I say, "volume considerations are at best coincident... at worst, encourages erroneous trading decisions.".

What you actually said was: Not a matter of "for anyone". It's a matter of "is or isn't".

Which was why I said that your premise seems to be that anyone whose experience leads them to a different belief-set from your own is, by definition, "just wrong" (and I'm still saying it, now - because that still seems to me to be your premise

).

I get it that "you use volumetric bars, you're successful, therefore volume is worthwhile...

Not an argument I've actually adduced (and not a logical or reasonable one, in my opinion.)

but this thread is not about how you use volume.

Fair enough ... I'll leave you to it, then.

 

[Scataphagos]

Which was why I said that your premise seems to be that anyone whose experience leads them to a different belief-set from your own is, by definition, "just wrong" (and I'm still saying it, now - because that still seems to me to be your premise

).

Nope. Just saying, "if you think volume is additive in helping you make better trading decisions, you haven't figured it out yet".

So... here's a little helper for everybody...

If you believe in volume analysis... when you're ready to make a trading decision, consider what you'd do without the volume consideration. Would it be different? Would it be right? Which turned out to be correct... price consideration alone or price + volume? (Don't just go on one or two examples... log 10-20 of them and then see what you think. That's how I came to the conclusion that "volume is useless at best, harmful at worst".)

 

[eurusdzn]

I dont communicate well. I'm just stating the obvious that volume analysis can , may, be more useful in , or at least draw you to stocks like XNET and WEED.TO
It does not mean that SOXL isnt fantastic because it does not display similar volume characteristics.
Clearly, trading any of these profitably is a seperate issue so in that regard it does not help.

 

[polaris]

"Absorption" does apply to the ability of buyers to absorb supply and sellers to absorb demand, but it also applies to the dynamics of accumulation and distribution. But this thread isn't about any of that so I used "digestion" in order to avoid getting into a lengthy explanation of something that may be of no interest. One could also use the term "ranging".

Ok buddy

 

[They]

Laissez Faire originally asked,

"Assuming that volume analysis of various kinds is useful in technical analysis - would a market like index futures be any different than other markets like for instance commodities? Or single stocks?"

The answer is; yes and no or same same but different. Certain aspects of volume will be consistent across all markets and others will not. There is total volume, there is delta-bid/ask volume, there is the volume of larger traders, iceberged volume, hft volume, there is the speed of volume, there is the range created by the volume, the price level volume occurs, the time of day when it occurs - news or report generated, etc. It depends on how far down the rabbit hole you want or have resources to go.

Scapathagos had a problem with Laissez Faire's assumption in the original question (is volume necessary to trade profitably?) and has ended up fueling a nice discussion on how others use volume. I think there are numerous traders like Scataphagos that do not use volume and are profitable just using price action. Other's like Xela swear by it. Then there are those who can trade an instrument without using its price action or volume. Everyone's trading style is different and thus anyone who lasts in this business ultimately settles into a certain style of trading and certain instruments that fit their style.

Since Xela can't post her charts because of signing a NCNDA I'll post one using volume bars for her

Instrument: NQ
Bar Segment: 3000V
Event Trigger: Speed Threshold of traded volume

Each event occurred at a turning point in the market or low risk entry point.

Supply and demand is all there is, everything else is just a giver of confidence.

They

 

[themickey]

Nope. Just saying, "if you think volume is additive in helping you make better trading decisions, you haven't figured it out yet".

So... here's a little helper for everybody...

If you believe in volume analysis... when you're ready to make a trading decision, consider what you'd do without the volume consideration. Would it be different? Would it be right? Which turned out to be correct... price consideration alone or price + volume? (Don't just go on one or two examples... log 10-20 of them and then see what you think. That's how I came to the conclusion that "volume is useless at best, harmful at worst".)

Certainly worth considering as a great idea. I will try this.

 

[polaris]

Laissez Faire originally asked,

"Assuming that volume analysis of various kinds is useful in technical analysis - would a market like index futures be any different than other markets like for instance commodities? Or single stocks?"

The answer is; yes and no or same same but different. Certain aspects of volume will be consistent across all markets and others will not. There is total volume, there is delta-bid/ask volume, there is the volume of larger traders, iceberged volume, hft volume, there is the speed of volume, there is the range created by the volume, the price level volume occurs, the time of day when it occurs - news or report generated, etc. It depends on how far down the rabbit hole you want or have resources to go.

Scapathagos had a problem with Laissez Faire's assumption in the original question (is volume necessary to trade profitably?) and has ended up fueling a nice discussion on how others use volume. I think there are numerous traders like Scataphagos that do not use volume and are profitable just using price action. Other's like Xela swear by it. Then there are those who can trade an instrument without using its price action or volume. Everyone's trading style is different and thus anyone who lasts in this business ultimately settles into a certain style of trading and certain instruments that fit their style.

Since Xela can't post her charts because of signing a NCNDA I'll post one using volume bars for her

Instrument: NQ
Bar Segment: 3000V
Event Trigger: Speed Threshold of traded volume

Each event occurred at a turning point in the market or low risk entry point.

View attachment 180626

Supply and demand is all there is, everything else is just a giver of confidence.

They

The three points of reference that you highlight, can you confirm your own trading direction for each one? Are you selling on two occasions?

 

[They]

Polaris,

I'm just showing where an acceleration of volume occurred and marking the highs and lows of the price range that the volume created. How one would choose to trade that event would be more a question of one's individual trading style. The speed of the volume is the event, the range of the resultant bar and its location at that point in the trading day are secondary.

They

 

[polaris]

Polaris,

I'm just showing where an acceleration of volume occurred and marking the highs and lows of the price range that the volume created. How one would choose to trade that event would be more a question of one's individual trading style. The speed of the volume is the event, the range of the resultant bar and its location at that point in the trading day are secondary.

They

Hi They.

Thanks for the reply. I just thought it was strange to find more reason for sells in a raging bull market.


Polaris.

 

[themickey]

Nope. Just saying, "if you think volume is additive in helping you make better trading decisions, you haven't figured it out yet".
So... here's a little helper for everybody...
If you believe in volume analysis... when you're ready to make a trading decision, consider what you'd do without the volume consideration. Would it be different? Would it be right? Which turned out to be correct... price consideration alone or price + volume? (Don't just go on one or two examples... log 10-20 of them and then see what you think. That's how I came to the conclusion that "volume is useless at best, harmful at worst".)

Certainly worth considering as a great idea. I will try this.

Looking at some charts to verify the theory, I think Scat makes a good point.
Volume considerations may make you late to the party.
I began my trading adventure many years ago as a firm volume believer, then I became a disbeliever, then I took it up again looking at it in a different light. What now? Will I become a disbeliever again??