Volume--- how to use it and WHY

Quote from marketsurfer:

:confused: what am i missing?

an SMA needs to be created from periods-- constant volume bars are formed from a set volume number that is created by default at various time intervals therefore time is incorporated by default. you can't avoid the time factor inherent within market measurement.
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If you know how the bars are constructed, let's say 1K shares/bar, and you know the SMA is an N period mean of the close of each bar I could give two datasets, one containing a range of SMA values and the other containing ticks with the datestamp replaced with an ordinal numeric index for each tick.

With just that information you would be able to reconstitute the bars, compute the SMA and locate where the first dataset exists within it.

Time is nothing more than a label unless it's an integral part of the method's construction.
 
Quote from jprad:

If you know how the bars are constructed, let's say 1K shares/bar, and you know the SMA is an N period mean of the close of each bar I could give two datasets, one containing a range of SMA values and the other containing ticks with the datestamp replaced with an ordinal numeric index for each tick.

With just that information you would be able to reconstitute the bars, compute the SMA and locate where the first dataset exists within it.

Time is nothing more than a label unless it's an integral part of the method's construction.
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yes, you can interpret/present the data as you wish.

however, you can't avoid the inherent time quality regardless of rhetoric to to contrary.

for example--- say it takes an entire session to create one 1000 share bar--- that bar, by default, represents the session--- the session is determined by time therefore the bar has an inherent time quality. this example can be applied to any smaller or larger time factor. the nature of the world makes it unavoidable.

surf

surf
 
Quote from jprad:

Time is nothing more than a label unless it's an integral part of the method's construction.
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Show me your chart that does not require time to form ... please. :)
 
Quote from mike007:

A tick chart or volume based chart.
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This has been asked and answered with surf's post.

Quote from marketsurfer:

"say it takes an entire session to create one 1000 share bar--- that bar, by default, represents the session--- the session is determined by time therefore the bar has an inherent time quality. this example can be applied to any smaller or larger time factor. the nature of the world makes it unavoidable."
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You also missed my detailed explanation on the different charts and how they work, mike007, and you didn't post a chart.

This is getting a little redundant ...
 
Quote from MandelbrotSet:

This is getting a little redundant ...
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Just a little.

It's quite simple. Tick, Range, Volume, Time bar charts all show how price changes over time. The only difference is the determination of the time interval for each bar. They each show the highs and lows at the same price and in the same order. There is not much to choose between them.

However, if you are interested in looking at how volume changes over price and time, then one of those chart types is much less useful. In fact the only reason I can think of for promoting constant volume charting is as a marketing gimmick.
 
Quote from euclid:

Just a little.

It's quite simple. Tick, Range, Volume, Time bar charts all show how price changes over time. The only difference is the determination of the time interval for each bar. They each show the highs and lows at the same price and in the same order. There is not much to choose between them.

However, if you are interested in looking at how volume changes over price and time, then one of those chart types is much less useful. In fact the only reason I can think of for promoting constant volume charting is as a marketing gimmick.
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well stated.

surf
 
Quote from marketsurfer:

First, exactly what is volume as it applies to the market? Volume is the total number of shares/contracts traded within a specified timeframe. The higher the volume, the greater the liquidity. Generally, the higher the liquidity the lower the volatility, with volatility being the size of price moves. Higher the volatility, the less the liquidity in most situations.

In the most basic form, traders like to see volume slowly increasing in the direction of a trend. A volume spike can indicate the end of a trend and declining volume can reflect a soon to die move. I believe the 3 primary volume indicators are: On Balance Volume, Accumulation/Distribution Line, and Ease of Movement. The following is a brief description and example of how you can use each one to improve your trading.
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Total garbage. You and I exchange $1 every minute for an hour. The volume is $60. Nothing was bought or sold. No value was added. It is equivalent to exchanging nothing, or 0 volume.

Except if were are asked to pay tax on it. This is why a tax on transactions will actually make things more transparent in the markets. It will make it costly for manipulators to fake volume.

I seems like some people at tradingmarkets.com are living 20 years ago. This is what happens when failed traders 20 years ago turn to celebrated authors.

Plonk
 
Quote from marketsurfer:

for example--- say it takes an entire session to create one 1000 share bar--- that bar, by default, represents the session--- the session is determined by time therefore the bar has an inherent time quality. this example can be applied to any smaller or larger time factor. the nature of the world makes it unavoidable.
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Surf, using time as a reference point to synchronize the dataset is entirely different then being an integral part for computation of the method.

Let's say there's a horse race you want to watch live and you know that it's going to start at 6pm EDT on some Saturday in May.

While you certainly need to know that information, as well as the channel it's going to be televised on in order to watch the race, time itself is irrelevant to the outcome. All that matters is which horse's nose crosses the finish line first.

However, if you want to know the duration of the race or the average speed that the race was won then you certainly need to know the elapsed time.
 
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