Simple Trading Journal based on Volume Price Analysis - Burning Both Ends

[Scataphagos]

Wow I lost brain cells.. cmon Scat.. vol is def useful

Volume is NOT helpful... it's actually hurtful. I understand the conventional wisdom. Years ago I used it somehow... then one day I noticed it no longer correlated with market moves... so I dropped it completely.

And then there's the point of logic....

Let's say you consider "price & volume"... Let's say on the consideration of this possible trade, "volume doesn't support my view on price here, so I'll pass on this trade". So... when this trade "would have worked out, but I didn't take it because of my view on volume"... I've missed a profit opportunity because of my consideration for volume.

Volume won't cause you to make losing trades... but considerations of it WILL cause you to miss winning trades.

Trade from "price alone". Every additional variable reduces your winning trades and profit opportunities. You should "recognize" the trade even before you KNOW the volume!!

That's my long-standing and logically deduced view of the worthlessness of volume (in spite of it being "TA heresy").

 

[Srm888]

"Trade from "price alone". Every additional variable reduces your winning trades and profit opportunities. You should "recognize" the trade even before you KNOW the volume!!"

I have a small issue with this for the following reason.

Volume is printed alongside the price, volume is not the result of price moves, it works in conjunction with. Working out the balance between the two you can begin to understand how valid particular moves are. Volume is how the "price is constructed".

My question to you is what creates and sets price?

The answer is supply and demand, its the simple force between buyers and sellers. The imbalance of this creating a movement of price. That really is it.

If you had 2 green up candles of the same size and shape next to each other, first one had 500k in volume, second had over 1m in volume, wouldn't that look suspicious?

"Years ago I used it somehow... then one day I noticed it no longer correlated with market moves... so I dropped it completely"

I completely understand you and I used to have this same problem, but once you realise the interaction and high volume taking place at certain key price levels, you get an understanding if these particular levels are made up of more buyers or more sellers.

Look at this chart from LSE: UDG

This is no accident, I currently hold this long from 745. Not every volume bar and every trading day can be taken as the gospel truth, but something interesting was happening around that down candle on the 10th with the increase in volume.

The other interesting point here is the huge red down candle from 2 days ago, lowish volume for the size of the candle? doesn't make sense does it? Until we accept the fact this is how markets are manipulated, I use that term loosely, but the fact remains, the market makers at setting the price here, not retail traders. This therefore is an anomaly and is unlikely to be classed as genuine selling, I could be wrong and I am happy to be corrected. I just think its worth investigating. If I am honest, I am looking to get out here around 820.

The crux of it for me is this, is the price validated by the volume traded during that session? The answer normally gives you a direction for the trade.

 

[.sigma]

Volume is NOT helpful... it's actually hurtful.

ET post of the year goes tooooooo

 

[Srm888]

Annoying loss in LSE: SBRY of -£22.05. Not 100% sure if I made the right choice closing this one out, but I would rather keep the losses small. Probably small numbers to a lot of people on here, but if I can get the strategy right, then my positions sizes will just increase along side my account size over time.

Couple of interesting ones on the screener have popped up. More details on the blog.

Key theme for the week, more patience required.

 

[themickey]

Annoying loss in LSE: SBRY of -£22.05. Not 100% sure if I made the right choice closing this one out......

Key theme for the week, more patience required.

Contradicting yourself.
You cannot trade like this and succeed.
For starters, you have a volatile stock, then get annoyed with a £22.05 loss and announce "more patience reqd".

 

[Srm888]

Contradicting yourself.
You cannot trade like this and succeed.
For starters, you have a volatile stock, then get annoyed with a £22.05 loss and announce "more patience reqd".

Fair one, your right. I guess I needed to vent my frustration, what I should have said was I have clearly read the price wrong on this.

 

[Srm888]

1 Loss with LSE: YCA

1 New position opened with LSE: BAB


Really like the setup here with LSE: PPS, put an order in looking for a run back up to 115.


Is this accumulation in the stock?

 

[Srm888]

The power of volume, I only opened this trade yesterday in LSE: BAB because of the volume that was associated with the downwards price spike. Clearly some inside activity here as it gapped up this morning yielding a tidy profit.

I closed this out for a quick £64 profit, however as I type this turns out the timing was terrible and i have suffered a huge slip on the spread. I closed because there was some news released which looked negative in my opinion and it was getting marked down heavily.

I snatched at this one, and paying the price because of it.

 

[Srm888]

Tough week closed out 5 trades in a row, losing any gains I have made so far.

I really need to fine tune my win/loss ratio. IG Index tells me I have a 50% win ratio. When I ran my demo account for 6 months this was running about 65%. Which was pretty good I think, hence why I'm doing this.

I know you can be profitable with less than this.

its tough lol

 

[Srm888]

Ouch 7 losses in a row. Feeling the pain of a draw down from last week.

Can anyone recommend any material on accumulation and /or distribution please? There doesn't seem to be alot out there on the subject.

Ta