Volume analysis is to be discarded as it is "too much information"

Volume analysis of any use?

  • I believe in using volume analysis

    Votes: 162 58.5%

  • I discard volume analysis in my trading

    Votes: 71 25.6%

  • I really don't know

    Votes: 43 15.5%
  • Total voters
    277
Quote from MandelbrotSet:

Sorry jack, I need proof ..

snip...

And you might as well ask the same question of yourself and your followers.
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This is the fourth generation of success for myself and those who made the choice to accept the proof of the person who passed it forward to them.

Obviously you passed on the opportunities to meet locals in your area who are successful. Spyder gave you the opportunity in NYC. NYC is a big place and there are many successful practitioners there.

Passing it forward only happens when two people meet and one learns how the other is succeeding. You are literally surrounded by people who do what was given to you.

Surfer, recently brought up volume......... And after spending time with spyder over two years of socializing. He passed just as you did.

Its funny to see you hanging out with the OCD's here. You and they are waiting for proof that has been posted over and over.

What is it like to be photoshopping pinwheel hats on pics that are years and years old? It is sooooo out of it for even children to do......
 
Quote from jack hershey:

This is the fourth generation of success for myself and those who made the choice to accept the proof of the person who passed it forward to them.

Obviously you passed on the opportunities to meet locals in your area who are successful. Spyder gave you the opportunity in NYC. NYC is a big place and there are many successful practitioners there.

Passing it forward only happens when two people meet and one learns how the other is succeeding. You are literally surrounded by people who do what was given to you.

Surfer, recently brought up volume......... And after spending time with spyder over two years of socializing. He passed just as you did.

Its funny to see you hanging out with the OCD's here. You and they are waiting for proof that has been posted over and over.

What is it like to be photoshopping pinwheel hats on pics that are years and years old? It is sooooo out of it for even children to do......
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What's it like to be posting the same nonsense over and over again?

The proof is that your theories are crap ...

... hey wait, everyone knows that your traders are such well-known success stories ... ROTFLMAO!!! :D :p :)
 
Quote from MandelbrotSet:

What's it like to be posting the same nonsense over and over again?

I have been fairly consistent in my views for over 50 years. It has been very rewarding in many ways. Everyone is at choice and most people (4 out of 5) choose to pass on pool extraction and its many applications. As in trading, the minority have the advantages.

The proof is that your theories are crap ...

this is the view of people not using the pool extraction algorithm and its applications. How a person gets to that conclusion is worth looking at. Not everyone succeeds in trading and all those that fail are worth looking at.. A lot is learned by examining failures. Edison stands out head and shoulders above most. OCD's are not worth looking at to any extent; they are incoheremt and there is no mental activity going on any more that is rational.

... hey wait, everyone knows that your traders are such well-known success stories

There is no chance that what is being done by these people could become well known. The preponderance of commentary by those who speak is negative and based on the kinds of information you used to make your final decision. We do not post in P&L for good reasons. Personally I am not allowed in other forums that do not allow vendors, simply because I am regarded by them as a vendor. Bloggers, Babak, for example, dwell on word count and level of detail and both are considered negatives. I gave you a one pager, for example; detail is somthing you cannot suffer.

What you see is a long standing filter in operation. It works quite well. It especially eliminates being well known in any way.

... ROTFLMAO!!!

Exercise is a good idea for everyone...... go for it.

:D :p :)
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I have to admit "spork" and "butter knife" were humorous.

A thought on volume. One of volume's greatest handicaps to traders was how the platform vendors tied it to an axis. Intellectually, this was unnecessary and actually needs to be avoided.

You can see that gradually over time the more successful annotators of volume leave the anchoring to an axis behind to the same extent that price is no longer anchored to an axis. As we see some indicators are anchored to an axis and others are not. Does this deny some information content to the representations?
 
Oh my god. When I saw the title of this thread on the main page, I thought, "Sounds like something that Buy1Sell2 might have posted".

I guess we'll be treated to 200 more pages of ridiculous assertion followed by smileys as this misguided paper trader tries to tell us that he knows how we should trade.

For anyone who doesn't know, Buy1Sell2 is on record making the following statements.

1. Daytrading is 'inferior behaviour'

2. Traders should not go long and short within the same trading period.

3. If you have a position which is in the money, you should treat the profit as 'house money' and let it ride, every time, all the time.

4. The extent of future price moves can be determined in advance of the move.

5. This determination can be made by... wait for it... by backtesting!!

6. Scaling in is also 'inferior behaviour.


Don't believe me? It's all in this thread.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=78975

Now we learn that volume analysis is 'inferior behaviour'.

And so on.
 
I agree but I don't see the point. Are you replying to somebody saying trading on volume is a sure thing? I think we all know it's a probability game, price can move up or down after any signal you get. That doesn't mean there are not ways to look at volume that change the odds.

Quote from Buy1Sell2:

Price can move up with little or no volume. Price can move down with little or no volume. Price can move up with a lot of volume. Price can move down with a lot of volume. Price can move up with average volume. Price can move down with average volume. Price can move up with a little above average volume. Price can move down with a little above average volume. Price can move up with a little below average volume. Price can move down with a little below average volume. Price can move up with a little less than a lot of volume. Price can move down with a little less than a lot of volume. Price can remain unchanged with little or no volume. Price can remain unchanged with a lot of volume. Price can remain unchanged with average volume. Price can remain unchanged with a little above average volume. Price can remain unchanged with a little below average volume. Price can remain unchanged with a little less than a lot of volume. Price can -----
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It sounds like you have started with a strategy that works and asked the question whether your setup means different things in different volume environments. I don't think that is surprising that volume was not useful. I don't think volume should always make a difference by itself or combined with every trade setup.

Just out of curiousity, what kind of analysis did you do? Did you observe stuff real time and get a sense of things or look at stats over a lot of trades? Did you normalize volume in a few of the likely ways?

I started from a different point - started using a rule where somebody else found volume was important, changed the rule, and found out volume was still important. Didn't do a lot of tweaking, the first volume measure I tried worked pretty well so I didn't do much to it. Looked at stats pretty formally and tested out of sample. I have some issues to work out before I can trade it though.

Quote from Thunderdog:

That's the part that never really came to fruition for me, despite repeated effort on my part over a period of years. For a while, I even thought I "got it" but eventually decided that my volume epiphany was illusory. Perhaps you work smarter than I do, in which case you will have an "edge" that continues to escape me.

But that's the thing. Since I presently only look at price, I will already be in the trade if the price formation meets my predefined criteria, irrespective of whether it was news-based or volume assisted. As for how far the price may move, that part is secondary to getting in at a good, low risk price point. We never know how a move will play out. Never. And if price retraces against me and reaches my exit point, be it the initial protective stop or a subsequent trailing exit point, then I will exit irrespective of what volume has to say, because my risk is in dollars as measured by price. For these reasons, I fail to see the practical relevance of volume analysis.
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Quote from black diamond:

It sounds like you have started with a strategy that works and asked the question whether your setup means different things in different volume environments. I don't think that is surprising that volume was not useful. I don't think volume should always make a difference by itself or combined with every trade setup.

Just out of curiousity, what kind of analysis did you do? Did you observe stuff real time and get a sense of things or look at stats over a lot of trades? Did you normalize volume in a few of the likely ways?

I started from a different point - started using a rule where somebody else found volume was important, changed the rule, and found out volume was still important. Didn't do a lot of tweaking, the first volume measure I tried worked pretty well so I didn't do much to it. Looked at stats pretty formally and tested out of sample. I have some issues to work out before I can trade it though.
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2c. One of the very 'few' volume based indicators that had some merit in my past studies was OBV. Take a good sample of past winners and their breakouts/exponential runs from very long periods of sideways behavior; then look at how OBV behaves. It generally tends to grow right along with the breakout; a good confirmation attribute/filter adding support to the hypothesis that the breakout is real (particularly during a bull market).

That being said, I don't use much volume based indicators anymore; and with the proliferation of third party exchanges/overseas reporting/dark pools and relaxed reporting of trades, I don't even know that the reported volume is even all that reliable nor accurate anymore.
 
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