Price/Volume Relationship

[Spydertrader]

Quote from bighog:

Volume is always "ZERO" volume until price triggers orders.

On the ES, when the DOM shows 1200 x 400 (Ask / Bid), please share with the class how Price moves without 1. Volume eating away at the price level, or 2. Pulled orders (Volume) being removed from the queue (or a combination of the two). Price cannot move forward unless or until Volume at the given Bid / Ask Pair removes orders resting at those levels. Volume isn't triggered by Price change. volume causes price change.

It's really that simple.

- Spydertrader

 

[Avi 8]

Quote from bighog:

...If anyone still "thinks, believes" volume leads, please seek professional help ASAP.

From Chat:

bighog (Nov 29, 2007 11:18:45 AM)
If i bought a brand new car and wanted to go somewhere with it i would first need that motivation for me to start the car and go forward or backward, whichever way i saw fit. The car would go nowhere until i told it to move and i out gasoline in the tank and stepped on the gas pedel. Volume works the same way, there must be motivation first to get the volume motivated. What would motivate the players (volume) in a game of chance? Without gasoline or price movement as motivation we go nowhere.

The problem with this car analogy is the car is actually price and the 'gas pedal' is volume. As the pedal has more pressure applied (volume) the car travels farther and faster (price).

For those that trade breakouts, review the ones that 'work' versus the ones that 'false' breakout by comparing the volume differences.

 

[ProfLogic]

Quote from Spydertrader:

Price cannot move forward unless or until Volume at the given Bid / Ask Pair removes orders resting at those levels. Volume isn't triggered by Price change. volume causes price change.

It's really that simple.

- Spydertrader

Absolutey correct and if more people understood this their trading would be a lot more profitable.
Well stated Spyder.

 

[bighog]

totally incorrect proflogic

price is the catalyst Volume sits there as something to be executed if and when price makes a move.

After the fact, then you can look at volume and see how many were driven to action from the price move.

Spy and his pet Avi are all wet and have an agenda, i have no agenda, i just know how to make money before the event ,. not AFTER> ..

HOG OUT .

 

[ProfLogic]

Quote from bighog:

totally incorrect proflogic

price is the catalyst Volume sits there as something to be executed if and when price makes a move.

After the fact, then you can look at volume and see how many were driven to action from the price move.

Spy and his pet Avi are all wet and have an agenda, i have no agenda, i just know how to make money before the event ,. not AFTER> ..

HOG OUT .

I respect your opinion and have no agenda either. Maybe I misunderstand your position but correct me if I'm wrong.

The average investor isn't looking at the DOM to place trades he/she is interested in either buying or selling a market or stock regardless of the particular moment.

The average trader IS looking at the DOM or at least a moment in a market or stock that is swaying his/her opinion to either buy or sell a market.

In all cases though this action is not a collective decision the market is making. Not only is everyone's decision unique but the vast majority of individuals looking a a particular market or stock is looking at that same entity differently.

For this reason I feel one must create a chart of the market we are trading that eliminates those inconsistencies and makes volume a consistent way to view price movement.

 

[Spydertrader]

Quote from bighog:

price is the catalyst Volume sits there as something to be executed if and when price makes a move.

Get this through your head. Price cannot move without either 1. Volume eating away at resting orders on the Current Bid / Ask pair, or 2. Those very same orders are 'pulled' out of the queue (a combination of these two also exists). Without such action occurring, Price does not change. Again, rather than post personal attacks, please feel free to share with the rest of the world how Price moves on the ES without Volume eating away the orders sitting on the current Bid / Ask Pair. In addition, if someone adds to the current Bid / Ask levels, Price isn't going to move off that pair until the added resting orders are either pulled or filled (or both).

Again, the world awaits your description on how seemingly only through your broker can one violate this law of market dynamics.

And with respect to having an agenda, I have no idea whether or not you trade profitably in your paper trading account, nor do I care.

- Spydertrader

 

[NihabaAshi]

Some traders use volume and are consistently profitable.

Some traders don't use volume and are consistently profitable.

What's the debate about again?

Mark

 

[daveb351]

Spyder': You just explained how price can move without volume..."2. Those very same orders are 'pulled' out of the queue." You can see this happen watching MarketDelta's Bid/Ask footprints.

Quote from Spydertrader:

Get this through your head. Price cannot move without either 1. Volume eating away at resting orders on the Current Bid / Ask pair, or 2. Those very same orders are 'pulled' out of the queue (a combination of these two also exists). Without such action occurring, Price does not change. Again, rather than post personal attacks, please feel free to share with the rest of the world how Price moves on the ES without Volume eating away the orders sitting on the current Bid / Ask Pair. In addition, if someone adds to the current Bid / Ask levels, Price isn't going to move off that pair until the added resting orders are either pulled or filled (or both).

Again, the world awaits your description on how seemingly only through your broker can one violate this law of market dynamics.

And with respect to having an agenda, I have no idea whether or not you trade profitably in your paper trading account, nor do I care.

- Spydertrader

 

[cd23]

BigH

You may need to add some more precise coding or display capability to your set up.

At this point you are disadvanteged in several ways.

Unfortunately, you are seeing price movement from a poor vantage point.

You may not be superfitial in your understanding; I shall not assume that you are.

Why not afford yourself a closer look than you now recite.

You could look at the markets from the raw data viewpoint and see what power and control you have to process this information into something very advantageous to yourself.

This is my agenda simply because my strategy is to be as profitable as possible.

At any time, I notice that the text book definitions apply regarding where the market is trading. Two values for price always exist, I notice.

Everyone knows that a choice is made regarding which is the favorable one. Equal weights are given to the positions regarding this side of the two prices. A zero sum situation.

Time passing determines which side profits from the decisions made.

I always happen to be your opposite when and if you take an action at the same time I do. We never transact again it turns out since we are going in opposite directions because of our strategies.

When you enter I am taking profits. When you exit I am establishing a position to make money in the same direction from which you just retired.

the basis of my trading is the opposite view of yours on the price and volume relationship and I have an advantage, apparently, because of the way inwhich I process raw data that differs totally from how you process raw data, if you do, in fact.

I call your attention to the detail of the relative frequency of the price and volume cycling. This symmetric relationship very quickly establishes the dependent and independent relationship of the variables.

Where you to make this discovery (for yourself; it has been done by others for the common good); you would be joining the minority side of the trading community. I know that you are aware of the financial truism that in making money, the minority controls. It is also important to know why the minority controls.

Apparently prof and spy have been attending this club's meetings for a while. Why not take the opportunity to join?

Notice that they each have their separate and accurate tools for processing the raw data.

Art becomes science as a consequence of determining the relationship of the variables. Read the first 15 pages of I the Vector to find out how it all begins.

 

[hcour]

As a Wyckoffian, vol is important some times, not so much at other times. You can have a legitimate breakout on low vol and wide spreads closing near the highs because of lack of supply at the top of a range, which may have been eaten slowly away. But what if that bo occurs on a long spread closing on the low, dropping back to the top of range? High or low vol, is that vol more important than the price action? In such a scenario, a bo on high vol may signify an upthrust, a kind of secondary trend climax after an initial trend climax, signifying a reversal. On low vol, it may just mean lack of demand. Either way, it is the price action that matters.

From Wyckoff's pov, price action is always first, vol second. And, just as w/price action, vol must be considered cumulatively. Say, following a bo, there is sideways action (little retracement) on narrow spreads but high vol. Well, the shallow retracement and narrow spreads are positive, but the high vol obviously suggests that things are not yet decided. So one may wait for an apex to form, where price action and spreads narrow and vol contracts, before taking a position.

Harold