Decreasing volume is not a sign of anything except that trading activity is decreasing. Whether buyers pushed prices higher has nothing to do with volume. Volume is simply a measure of activity. Buying pressure and selling pressure are reflected in price movement. As long as price is going in the desired direction, who cares what the volume is?
Son of If You Can Draw a Straight Line . . .
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Decreasing volume is not a sign of anything except that trading activity is decreasing. Whether buyers pushed prices higher has nothing to do with volume. Volume is simply a measure of activity. Buying pressure and selling pressure are reflected in price movement. As long as price is going in the desired direction, who cares what the volume is?
I look at volume but it's not a major factor in my analysis. In fact when Db had me focus on price without volume did my veil got parted. Before that I was just attempting to buy S and selling R and getting confused when it wouldn't respect the S/R.
Considering you've recently started to see price better and also you're not getting terrified of the movement as you'r brain is getting used to the pace I would advise you to focus on the context of the price itself. Later when you have more command over price and the supply/demand dynamic you may introduce volume and perhaps see for yourself what it can do for you.
Price: Moving up
Volume: High
Meaning: High intensity fighting between supply/demand with demand winning.
Price: Moving down
Volume: High
Meaning: Hight intensity fighting between supply/demand with supply winning.
Price: Moving up
Volume: Low
Meaning: Low intensity of participation by supply. Supply holding back for now.
Price: Moving down
Volume: Low
Meaning: Low intensity of participation by demand. Demand holding back for now.
It tells you whether the fighting is intense or weak but doesn't really tell you whether the supply or demand might return with a vengeance any time. Eventually it's the price that's the major determining factor of what's fine with your position and what's not, no matter what the volume is indicating.
Then of course there are variations of volume rising on up moves and falling on pull backs and the opposite. All this has some value, but the value isn't enough to lose sight of price itself. It's the price and the supply/demand that's king and the rest is the jingles for the seasoned to supplement the main information.
Gringo
Considering you've recently started to see price better and also you're not getting terrified of the movement as you'r brain is getting used to the pace I would advise you to focus on the context of the price itself. Later when you have more command over price and the supply/demand dynamic you may introduce volume and perhaps see for yourself what it can do for you.
Price: Moving up
Volume: High
Meaning: High intensity fighting between supply/demand with demand winning.
Price: Moving down
Volume: High
Meaning: Hight intensity fighting between supply/demand with supply winning.
Price: Moving up
Volume: Low
Meaning: Low intensity of participation by supply. Supply holding back for now.
Price: Moving down
Volume: Low
Meaning: Low intensity of participation by demand. Demand holding back for now.
It tells you whether the fighting is intense or weak but doesn't really tell you whether the supply or demand might return with a vengeance any time. Eventually it's the price that's the major determining factor of what's fine with your position and what's not, no matter what the volume is indicating.
Then of course there are variations of volume rising on up moves and falling on pull backs and the opposite. All this has some value, but the value isn't enough to lose sight of price itself. It's the price and the supply/demand that's king and the rest is the jingles for the seasoned to supplement the main information.
Gringo
Depends on where you are in your process. If your stomach still tightens when price breaks an SL or DL, then just get out. The hanging back part will come later. In the meantime, the drill will become more automatic and you won't have to think about whether you should exit on these breaks or run the risk of incurring unnecessary losses.
Some value but not much. Most of what's written about volume is nonsense, written by people who don't understand it any better than their audiences. They'll say for example that volume with rising price should be heavy. That's baloney. Heavy volume means that sellers are fighting it every step of the way. On the other hand, they'll say that light volume with rising price suggests lack of conviction. Also baloney. If buyers were lacking conviction, price wouldn't be rising. Price is rising on low volume because sellers aren't interested for whatever reason in impeding the move.
Okay, thank you for the feedback. I didn't initially think to view these things as a function of my internal confidence level.
If I had to assess myself, I would say that I am comfortable with the DL break / 50% mark scaled exits, but uncertain when things begin to move past that point, so as you've advised I will stay with those until I begin to feel more comfortable, and focus first on learning to avoid premature exits near the beginning of my trades when the lines fan slightly without showing overt weakness.
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Just as a learning exercise at this point, I re-drew the chart of the short with a hypothetical situation of buyers continuing to gain momentum.
I would be interested in hearing other people's opinions and thoughts on how (when/if) they would exit the short [red line] if this is how things were playing out in RT instead, and especially your thought process behind it. The green lines were my exits, half and half.
To elaborate:
It was clear that niko and I were missing a full understanding of the S/D dynamics at the time of the RET, and DB alluded that a correct perception of the context would've kept us in the trade.
One can clearly see that our exits on the RET were premature, but I am uncertain as to what additional information we could have waited a bit longer on before deciding that there was no compelling reason to be in the short anymore.
Perhaps someone can point out some suggestions via the exercise.
9:27 Yep. We are in an uptrend now, but we might find some selling around this area at the open. If buyers can keep it up then I think they could aim for 400 or not. Only price will tell us.
:31 DL broken.
:32 I guess the rejection of 80 was reason enough for a long (no line) marked the long at 82.75, but did not have the guts to take it.
:37 Long at 37.75
:42 That was a bad call, Now I am short at 83,25 but it is not feeling right either. SL broken.
:31 DL broken.
:32 I guess the rejection of 80 was reason enough for a long (no line) marked the long at 82.75, but did not have the guts to take it.
:37 Long at 37.75
:42 That was a bad call, Now I am short at 83,25 but it is not feeling right either. SL broken.
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