I always write Piscuy, but in fact its Stealth Trader style.
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Price Action Journal V1.5
- Thread starter TraderKaizen
- Start date
I always write Piscuy, but in fact its Stealth Trader style.
Stoneface,
Thanks so much for taking the time to post the chart and include such detailed commentary. I will study this chart over and over again until I can grasp the concepts. Thank you, I really appreciate it.
Floyd
Thanks so much for taking the time to post the chart and include such detailed commentary. I will study this chart over and over again until I can grasp the concepts. Thank you, I really appreciate it.
Floyd
Quote from stoneface:
My interpretation of PA on Nov 21. This day reminded me of another friday we had of climax selling in October. When new lows were not made, switch flipped on in head that told me we were going up until close. PA did confirm this suspicion.
In a number of posts lately, we have been discussing reversal patterns (like DT/DB) and the importance of volume confirming that pattern. In a DT for example, how much more confirming the pattern is if the first top occur on heavy volume, while the second top happens on light volume compared to the first top. We have also talked about how a 1 min chart with volume is a good way to see this.
My question is: Do we really need to look at a time based chart to get that confirmation with volume? Most of us here like to use constant volume bars. This of course means that every bar consist of a certain amount of contracts/volume. This again means that a top which is made up of a large amount of bars, is a top with heavy volume. If than that next top in that DT has much fewer bars in it, it would mean that it also has much less volume.
The reason I bring this subject up, is because I often look at my volmue chart, and tend to forget what it really is. I treat it like it was just some random time chart, were every bar is printed without really telling me anything other than where price is moving at the moment. But the thing is, volume charts contain much more information if you look at examples like the one I mentioned.
Of course it is probably much easier just switching to a 1 min chart and compare the sizes of the volume spikes, but maybe if one pays attention to this phenomenon at critical patterns like that DT, which might suggest trend reversal, after some time one might not need to look at that time based chart anymore for volume confirmation.
I am probably just lazy, but I hate having to swich to a time based chart only to get confirmation from volume, when I in theory have the same information written in my primary chart, only in a different "language".
I have attached an example of that big trend reversal we saw on the 14th of november. M or DT or whatever pattern you prefer to call it, not really that important. I only wanted to illustrate the number of bars each top consist of.
veggen
My question is: Do we really need to look at a time based chart to get that confirmation with volume? Most of us here like to use constant volume bars. This of course means that every bar consist of a certain amount of contracts/volume. This again means that a top which is made up of a large amount of bars, is a top with heavy volume. If than that next top in that DT has much fewer bars in it, it would mean that it also has much less volume.
The reason I bring this subject up, is because I often look at my volmue chart, and tend to forget what it really is. I treat it like it was just some random time chart, were every bar is printed without really telling me anything other than where price is moving at the moment. But the thing is, volume charts contain much more information if you look at examples like the one I mentioned.
Of course it is probably much easier just switching to a 1 min chart and compare the sizes of the volume spikes, but maybe if one pays attention to this phenomenon at critical patterns like that DT, which might suggest trend reversal, after some time one might not need to look at that time based chart anymore for volume confirmation.
I am probably just lazy, but I hate having to swich to a time based chart only to get confirmation from volume, when I in theory have the same information written in my primary chart, only in a different "language".
I have attached an example of that big trend reversal we saw on the 14th of november. M or DT or whatever pattern you prefer to call it, not really that important. I only wanted to illustrate the number of bars each top consist of.
veggen
Attachments
Quote from trackstar:
The point of looking at a volume chart is to identify when the tide is about to turn and jump on. Your confirmation is the volume flowing in behind you.
Very deep, but an excellent point!
From my example above, do you think that it is possible to get the same information about the volume in the pattern by looking only at a volume chart, as of looking at a 1 min chart with volume bars?
Quote from veggen:
Very deep, but an excellent point!
From my example above, do you think that it is possible to get the same information about the volume in the pattern by looking only at a volume chart, as of looking at a 1 min chart with volume bars?
I think the best way to answer this is to explain the goal of using the volume chart. Your goal is to find an entry that lets you enter with little heat and ride the market until you identify that the market has nothing left to give to you. For me the 1min volume chart can let me know when a good time to EXIT and potentially re-enter on the other side of the market if conditions allow.
Quote from stoneface:
My interpretation of PA on Nov 21. This day reminded me of another friday we had of climax selling in October. When new lows were not made, switch flipped on in head that told me we were going up until close. PA did confirm this suspicion.
Great chart Stone. That's AHG textbook PA analysis as I understand it. Thanks for posting it.
shakira
Quote from veggen:
Here is that same pattern in a 1 min chart with volume.
Veggen: Thanks for bringing another way to simplify things.
I perosnally believe that the short term 1' and less volume analysis is just used to get a better entry/exit with better reward/risk. If you only use the 10k volume chart, you will see the "few bars" reversal as you say, BUT BY THE TIME YOU SEE IT the risk and logical stop point have widened considerably.
Just my opinion, as I'm still studying the 1' price-volume charts for better tactical entries WITHIN a 10K volume pattern chart.
I can see it is going to take a lot of practice to nail it real time.
shakira