Using volume to predict direction

[satchel]

Quote from lcranston:

This may have been true in the 40s, but it's been my experience that there will first be a fakeout in the wrong direction before price makes a U-turn and heads in the expected direction. This rattles people who aren't anticipating it.

Thanks Nodoji. I guess I will take my declining volume triangle breakout quasi theories and head over to the market charlatan thread where I belong.

 

[lcranston]

Quote from 1a2b3cppp:

My current style of trading has nothing to do with volume, though, so this is kinda new to me.

Gotcha.

Would you mind posting a chart of that?

Don't know how to do that. The process here is pretty clunky. Try this link:

http://www.barchart.com/cache/c181daafc71afed58d54594d72d80a9c.png

 

[lcranston]

Quote from satchel:

I guess I will take my declining volume triangle breakout quasi theories and head over to the market charlatan thread where I belong.

I wouldn't call them quasi. Sometimes price moves in the expected direction and sometimes it doesn't. What matters more is being prepared to SAR immediately if price doesn't do what's expected.

 

[1a2b3cppp]

lcranston = nodoji?

 

[1a2b3cppp]

Quote from lcranston:

Don't know how to do that. The process here is pretty clunky. Try this link:

http://www.barchart.com/cache/c181daafc71afed58d54594d72d80a9c.png

The page you requested cannot be found.


Please check the URL you entered and try again. If this was a bookmarked page, it's possible the URL has changed.

 

[Handle123]

Quote from 1a2b3cppp:

Let's have a discussion how to use volume as it relates to trading signals.

I meant to put this in the first post.

Only Volume method I have ever designed that worked better than 50/50 was for ES based on lighter volume at highs and accumulation of volume at lows, I would wait for failed moves back toward the extremes and take counter-trend trades, I often got the 4-8 tics and 1-3 times a week nail a 8-10pt runner.

When the volume was not as expected, unless trendlines were near price on hourly charts, I would not take the signals.

 

[lcranston]

Quote from 1a2b3cppp:

Sorry. If you bring up any 1m or 5m chart of the NQ for last Friday, you'll see what I'm referring to. If you'd rather use indicators, it's not important.

 

[danielc1]

Quote from 1a2b3cppp:

Cool, yes, thank you for mentioning that. I found that study in my charting program but I had no idea what I was looking at.

I have three different cumulative delta studies:

Cumulative Delta Bars - Ticks

Cumulative Delta Bars - Up/Down Tick Volume

Cumulative Delta Bars - Volume

I've attached a chart with all three. Let's discuss how these can influence our trading decisions.

I only use Cumulative Delta volume bars:

On your chart you can see the following:
From 9.09 to 11.20, price is moving with CDBV.
From 11.20 to 14.24, price is still in an uptrend, while CDBV is more going sideway's. This is a sign that 'they' are 'acummulating'.
From 14.24 you see a sudden move up in price with CDBV also going up. You can see this more clear in real time then after the fact on a chart, because you see the bars move and the volatility of the bar movement in congestion with CDBV tells you what is going to happen in the next couple of minutes. If you just sit in front a screen watching the development, you will get a feel for it.
No 'hard' rules, just relationship between price and CDBV.