Price/Volume Relationship

Quote from slapshot:

Mark,

They are NOT trendlines.

Thanks,

Paul
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Hi Paul,

The term trend lines is just a word that's used loosely that can be used to identify an existing trend or identify a different type of price action within a trend.

They are lines drawn on your chart either manually or via a code.

Out of curiosity, if they aren't lines, what are they?

Also, I re-read your reply and tried looking at the chart without the purple lines as you recommended.

There is no double top unless your reference points are different from mine.

In fact, since 0944am est the swing points have been lower highs as shown on your chart.

http://www.elitetrader.com/vb/attachment.php?s=&postid=1357389

I do see lower price highs and declining volume.

In addition, there's lower price highs with declining volatility.

With that said, there is something I do see that does correlate with something on your chart.

The chart you posted is for October 7th Thurs 2004.

The price close of the interval you have circled is 590.80 with a hgh price of 591.10...that interval closed at 1044am est.

Price then declines on on declining volatility and declining volume.

Then the interval that closed at 1056am est has rising volume on a price decline.

That's the same interval you annotated with a red arrow.

Therefore, technically, there is price/volume divergence for the price action between 1044am - 1056am est.

Mark
 
Quote from slapshot:

What you must have meant is that you are a very subjective individual - you obviously don't have that much objectivity if you are so rigid that you can't get past semantics to discuss the real point of the market action... which is never perfect and is always loosely formed.

Good trading to you as well - and good luck with all that intense hypercritical BS you overanalytical types subscribe to.

Too bad that you can't see the forest for the trees...
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I'm amazed when individuals get angry when they're introduced to something outside their comfort zone.

subjective - objective (these are opposites)

My rules in regards to Price are based on objective occurrences in its oscillations. Price IS consistent and perfect in its movement IF you know how to look and what to look for.

rigid - real (mean the same thing to me)

To me "real" is fact. Price is real because it is perfect. Once a price bar is created it is a "real" segment of the overall Price action of that particular market. This is a "RIGID" read on the market. If the price bar is a Volume Bar or Contract Bar then the ridigness is even better.

"intense hypercritical BS you overanalytical types subscribe to"

"Intense" - passionate yes, intense is a wee bit extreme though
"hypercritical" - I never considered objectivity to my trading environment as being hypercritical toward imperfection & inconsistencies in others but whatever.
"BS" - I love this. A perfect way to describe closedmindedness.
"overanalytical" - You can never over analyze price. (12 years of research on nothing but price proved a lot). You won't find it in another book because no one but me has spent the time or effort to build the proofs. It's too easy to get all of ones information for the work of others. I didn't I am glad of it.
"subscribe to" - Proved on my own. The information isn't borrowed from anyone else.

I see the country the rainforest is located, the individual forest, the trees that make up the forest, the bark on the trees and the wildlife and bugs that live there. Though unnecessary to me, I can see the microbes as well. When you can "SEE" everything, it is easy to then "SEE" what is perfectly consistent about the price environment.
 
Yeah right! Stoch and MACD are LAGGING indicators!
Quote from jackass hershey:

I also have about 17 leading indicators of price movement on the 5 minute price bar. They take two screens to depict. Most are pictograms that are each like a 1000 words.
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One of the best bottom lines on Hershey I've seen! EXCELLENT!
Quote from bsparkyman:

This guy is nuts... "I will talk down to you and you will kiss my ass because you hold out hope you will understand my method and be beholden to me."
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Genius? LOL! Here's Jack's twisted, self-congratulatory take on the "P, V Boolean Relation." Anyone with a brain can backtest it by buying the turns from 0 to 7 (see last page) to see that this is nothing more than another turd from the pied piper.

P.S. Jack and his minions will claim it's not a standalone method but for something that bills itself as "tomorrow's paper today," there should at least be some discernable edge.
Quote from austinp:

<i>"This guy is nuts..."</i>

I make it a rule to avoid personal discussions here, sticking to relevance of trading. However, let me diverge from that for a moment.

Anyone who reads some of Jack's writing should be able to see high intelligence behind those thoughts. Genius comes expressed in many forms: sometimes clear, concise and to the point while other times rambling, lengthy and disjointed.

I can also tell you that writing = typing 1,000s of words in legible form takes a lot of time. A lot more time if Jack types with only 3-4 fingers like I do. Should have never slept thru typing class in high school... that was a critical mistake on my part. But I digress.

For whatever internal motivation, Jack produces reams of instructional material. Many others find it relevant and helpful. What more is there to know than that?

<i>As someone who uses absolutely nothing Jack expounds on</i>, I have a lot of respect for his level of intelligence and dedication to work efforts. If there were a lot fewer negative, worthless posts in this forum, perhaps they would be replaced with positive, helpful input instead.

Jack, thank God profitable trading can be infinitely simpler than all what you teach. There would be no place in this industry for me if that weren't true. As someone who's typed literally millions of words on paper and online in my time, I do appreciate the effort that you expend. Being 42yrs old now, I hope to be as productive in life at your age if I'm blessed to live that long.
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Attachments

I've just read all 40 pages of this thread in one sitting — my embryonic trading mind is fried and spinning.

At the beginning of reading I was sure and hopeful that I was going to finish wiser. I have come away with a sense of the importance of the PV relationship, but no real direction as far as follow up — where do I go from here to attain the understanding you folks use for weapons (in the market and against each other, it seems)?

I'm not spoiled by years of 'wrong-thinking' — I'm not content to accept black-box solutions. I'm not against doing any quantity or quality of work that will enable me to truly understand this PV relationship better. But I don't feel I've gleaned any clues as to how to proceed, beyond staring at a chart for 12 years and (possibly) figuring it out for myself (re-inventing the wheel); or perhaps Tom Williams book?

I've walked in super-late to this debate, but if anyone's still out there who'd be willing to turn my head in a constructive direction — towards the latest PV information — I'd be truly grateful.

Many thanks.
 
Quote from bluedemon77:

A lot of people adamantly feel that there is a strong relationship between price and volume and this hypothesis makes sense. However, I've never observed this, casually looking at charts and I wonder if there has been any empirical evidence presented to support this hypothesis.

For example, in the attached 5 minute chart for ES last week, I highlighted the peaks in average volume and they do not appear to display any pattern that is discernable. The peak shows up when the price is peaking and bottoming, which you would expect, but also when it's moving up or down near points of resistance.

In addition, I analyzed ES quotes for the past 3 months and here is what I found. I divided the data into four quartiles of volume and it produced the following means:

Avg Vol. Avg Close Avg C-O

1816 1426.40 2.9%

5531 1424.65 3.2%

10423 1421.54 2.7%

34908 1419.50 -1.6%

From this it would appear that when the volume is greatest, the price tends to drop on that bar and shows up when the prices are lowest, contrary to some of the opinions expressed on ET.

I realize this is a limited sample, yada, yada, yada. But my question is has anybody presented any data to support the relationship between price and volume, or is this something that just "feels right?"
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This is what works and I HAVE Backtested it.
Entry Rules
If P Up and V Up Buy
If P Up and V NOT Up Buy
Exit Rules
If P Down and V Up Sell
If P Down and V down Sell

Try it - This PV relationship works like charm
 
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