Good spotting DM, nothing much gets past you.
Yes price can rise on the bid strikes, but firstly a correction to my last post.
Time is not irrelevant to me as I stated,, it is just that I view it through volume.
Now back to your excellent observation concerning ask/bid strikes and price.
You will notice that price often moves against the bid/ask on the glbx and particularly at the pre-open.
It can occur again at the open as price/volume scramble to gain traction and a direction for the morning.
It is popular during the low volume midday period.
In fact it can happen at any time which is why I have a WAV file based exactly on the amount of reversal as a % of total volume. It is one of my triggers.
As I view things, there are 4 inputs.
1 ... Price. Because it it all encompassing and it is what we trade.
2 ... Volume. Because that is us. We are not Traders, we are volume as soon as we enter the market.
3 ... Time. Because everything we do has a start, middle and end, but beyond this I read time through volume because volume is the outcome of our actions.
4 ... Limit Stops. Because they sit in the market like landmines and they translate into volume when touched.
(#4 is a fascinating subject and is worthy of much discussion, but back to price/volume.)
How can we compare price and volume?
In a small bar, price can move 0-6 tics and volume can change by thousands.
In a larger bar, things only get worse.
Firstly, the macro view.
In a rising market we would expect the asK/bid spread to steadily increase, give or take minor rumblings, which we then use as long entry points.
We can also use them as exits, so instead of staying in a long trend for an hour we might take 3 -4 shorter long trades and possibly throw in a short for 5 tics just because we are hungry for tics.
The micro view is dangerous because we are inside the "noise" where all our bad calls will be filled and some of our good calls will not be, thus skewing the outcome.
Well, one way is to measure the amount of reversal of price against the ask/bid strikes as a % of total volume.
Another way is to compare price & vol, which at the moment are like apples and lemons, so we need to normalize them. There are plenty of means to achieve this, but I prefer stochastics.
Now we can plot apples and lemons in one window.
Everything is done to produce a daily stream of net positive points. I never try to maximise anything in the trades.
kind regards
f9