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

[Thunderdog]

Quote from Xspurt:

Come ya old dog. Let's see yer MM.

Here's mine...

30 pips in a few mins. Pure cherry picking.

Tdog, quit writing about how much you know and show it.

Interesting. Based on the criteria you noted earlier, the very chart you posted shows a false positive volume reading at 9:09 AM and a false negative at 9:34 AM.

From where I'm sitting, YOU are the one who's writing about how much you know.

As an aside, one of my index trades earlier this morning (different time frame) quite coincidentally had a similar volume reading to the one you supposedly subscribe to. Fortunately, I was able to scratch the trade. This in addition to a few other observed false readings thus far based on your critieria.

No doubt, with your years of experience you'd be able to tell me after the fact which setups worked out. If you keep up with your penchant for cherry picking, you'll soon have enough to half-bake a cherry pie chart.

 

[Xspurt]

Quote from Thunderdog:

Interesting. Based on the criteria you noted earlier, the very chart you posted shows a false positive volume reading at 9:09 AM and a false negative at 9:34 AM.

From where I'm sitting, YOU are the one who's writing about how much you know.

As an aside, one of my index trades earlier this morning (different time frame) quite coincidentally had a similar volume reading to the one you supposedly subscribe to. Fortunately, I was able to scratch the trade. This in addition to a few other observed false readings thus far based on your critieria.

No doubt, with your years of experience you'd be able to tell me after the fact which setups worked out. If you keep up with your penchant for cherry picking, you'll soon have enough to half-bake a cherry pie chart.

Demonstrating what you have to offer or questioning a trade I did is constructive. Verbal pissing in the wind isn't.

I think I posted 4 examples now and I can't find those times. If you can show them to me I'll be happy to comment on them.

You might have a point as not all signals work. Let's see if you are reading it correctly.

 

[Thunderdog]

http://www.elitetrader.com/vb/showthread.php?s=&postid=2526151#post2526151

 

[Xspurt]

Thanks T'dog. Check I have the right chart.

09.08/09am is one of the Wyckoff key reversal volume trades. That was a sell that worked. Candles almost the same size and volume almost equal is Changing Hands.

9.34 is a test of a prior level. Last time selling faded into this level. The 2nd attempt selling was fading again. If volume was greater that last time at this level the odds favor a break down.

Lower selling volume than last time, also fading volume within each move down and buying on the increase all hint that the bulls can take control here.

Both these signals worked. You can't use your present level of knowledge to pass judgment and please don't try to trade with this.

My objective was to show some traders that volume has a place but requires study. I never intended to say here do this and you'll make $$$$.

 

[Thunderdog]

Quote from Xspurt:

Thanks T'dog. Check I have the right chart.

09.08/09am is one of the Wyckoff key reversal volume trades. That was a sell that worked. Candles almost the same size and volume almost equal is Changing Hands.

9.34 is a test of a prior level. Last time selling faded into this level. The 2nd attempt selling was fading again. If volume was greater that last time at this level the odds favor a break down.

Lower selling volume than last time, also fading volume within each move down and buying on the increase all hint that the bulls can take control here.

Both these signals worked. You can't use your present level of knowledge to pass judgment and please don't try to trade with this.

My objective was to show some traders that volume has a place but requires study. I never intended to say here do this and you'll make $$$$.

I think you're finessing it after the fact. The 9:09 AM down bar shows volume exceeding the volume for the down bar 3 bars earlier. Based on your criteria, this would be a short signal. It didn't really work out that way. The 9:34 AM up bar's volume did not have higher volume than the up bar volume 4 bars earlier and was even lower than the next immediately preceding up bar's volume. Based on your criteria, this would have invalidated a buy signal. The market went up.

Oh, and if you note the 9:28 AM down bar's volume, it is higher than the preceding down bar's volume 7 minutes earlier. Further, the 9:32 AM down bar's volume is fairly higher than the volume of a few earlier down bars. This would suggest a short on the basis of your critieria as you have explained it. In fact, the market rose.

 

[Xspurt]

Quote from Thunderdog:

I think you're finessing it after the fact. The 9:09 AM down bar shows volume exceeding the volume for the down bar 3 bars earlier. Based on your criteria, this would be a short signal. It didn't really work out that way. The 9:34 AM up bar's volume did not have higher volume than the up bar volume 4 bars earlier and was even lower than the next immediately preceding up bar's volume. Based on your criteria, this would have invalidated a buy signal. The market went up.

Oh, and if you note the 9:28 AM down bar's volume, it is higher than the preceding down bar's volume 7 minutes earlier. Further, the 9:32 AM down bar's volume is fairly higher than the volume of a few earlier down bars. This would suggest a short on the basis of your critieria as you have explained it. In fact, the market rose.

Let's deal with this step by step.

You think it's after the fact. You have the Wyckoff books so look it up. Send the chart and my comments to any Wyckoff site. These are basic Level 1 signals.

Your reading of the 9.34 is not Wyckoff and your analysis is badly off. Again check your books.

9.28: Is not a good sell signal. It has lower volume than last selling but look left - where is your supply/demand to qualify this signal?

9.31 (not 9.32) is testing the same level with increased selling and as you say it suggests a short. This is was followed with 2 red candles and not a rise that you saw.

If you were learning volume I wouldn't let you trade, but if you have the books and can't find this stuff but think I make it up, then how can anyone put you on the right path?

But look, if you have something that works for you, great. Just don't try volume trading with your present level of knowledge. Go all out for it or dump it.

 

[Thunderdog]

Quote from Xspurt:

...9.31 (not 9.32) is testing the same level with increased selling and as you say it suggests a short. This is was followed with 2 red candles and not a rise that you saw...

Oh, so that was a successful short?

 

[Xspurt]

Quote from Thunderdog:

Which invalidated the setup?

However, the same can be said for the 9:39 AM inside bar, and the two subsequent lower volume bars that followed. And yet, this was a short signal for you...

Correct.

9.39 had an inside sell signal. It was explained and it is the easiest signal to see. A real screamer to teach a beginner.

Clear volume climax with the biggest volume on the chart appearing on the red inside bar.

I am not being cheeky here, but honestly, if you can not read that signal, please stop.

The other signals you refer to need more skill. But not this one - it's the screamer.

 

[Xspurt]

Quote from Thunderdog:

Oh, so that was a successful short?

Do you think volume trading means you take every signal all of the time?

That's like saying an engulfing candle is a signal therefore you take every one.

But if someone says there's more to it you'll say it's cherry picking.

Rock on dude.

 

[ARealGannTrader]

Quote from Xspurt:

Do you think volume trading means you take every signal all of the time?

That's like saying an engulfing candle is a signal therefore you take every one.

But if someone says there's more to it you'll say it's cherry picking.

Rock on dude.

Whats killing Tdog is what kills most traders when using indicators.

Most traders have trouble with differentiating between absolute and relative indicators.

If u treat a relative indicator as an absolute and vice versa, then u will b killed almost every time.

Again, volume is relative indicator folks