Volume--- how to use it and WHY

[euclid]

Quote from ProfLogic:

Time is not relevant to natural price movement or it's cyclic oscillations.

I think you will find it is - at least in FX it is. Tick volume in FX can be predicted using time of day and price. I've read that tick volume is very closely correlated to FX futures volume, in which case that is also largely a function of time and price.

Now, I would agree that elapsed time is not significant. So I wouldn't expect to find a time based volume histogram very useful. I would look at volume relative to price movement and time of day. Constant volume bars may smooth out the price action (which I can't see the point of anyway) but I don't see how they help identify points of interest in the volume data.

 

[AMT4SWA]

It will be a REALLY great day if in the future I would be able to get my hands on ALL volume traded for each pair......where I would have access to ALL the volume information on one or even a couple of exchanges (without any missing or hidden volume flow not reported to the one or several of these exchanges).

 

[ProfLogic]

Quote from marketsurfer:

why? seems redundant.

I'd like to see you personally and manually monitor 100 instruments pre-market let alone almost 1,476.

The computer reads the price chart before I get up so it can give me a heads up on trades preparing to execute that day or ones that are still actively in their current position without me opening up all 1,476 charts.

 

[ProfLogic]

Quote from Eight:

edit: I really don't think that volume bars close the loop around anything, they might be useful in some sort of cycle detection.

They are extremely useful for cycle detection due to the fact they create natural cyclic oscillations.

 

[marketsurfer]

Quote from ProfLogic:

I'd like to see you personally and manually monitor 100 instruments pre-market let alone almost 1,476.

The computer reads the price chart before I get up so it can give me a heads up on trades preparing to execute that day or ones that are still actively in their current position without me opening up all 1,476 charts.

ok. i don't and it doesn't interest me. in fact, i don't even know one hedge fund that actively monitors 1476 different instruments.

best, surf

 

[ProfLogic]

Quote from euclid:

I think you will find it is - at least in FX it is. Tick volume in FX can be predicted using time of day and price. I've read that tick volume is very closely correlated to FX futures volume, in which case that is also largely a function of time and price.

Now, I would agree that elapsed time is not significant. So I wouldn't expect to find a time based volume histogram very useful. I would look at volume relative to price movement and time of day. Constant volume bars may smooth out the price action (which I can't see the point of anyway) but I don't see how they help identify points of interest in the volume data.

FOREX huh . . . you mean that market made up of manipulated bank currency transactions? Every wonder why there isn't any volume data only tick data? If you ever catch the ear of one of those high up bank execs in their currency departments and if you are really really lucky you might learn what really goes on inside FOREX.

Banks control the interbank feeds and they control the data you trade from. GLOBEX has tried for years to merge those feeds into a single stream to gain volume data. Not going to happen unless the banks are allowed to filter the data before they send it to GLOBEX. If you think that data is even remotely accurate to the actually trades that are taking place you are fooling yourself. I watched the transaction flow in Hong Kong one day at one of the largest banks there and it was a joke. I'll just say that a nice chunk of trades never got entered into the system. How's that for skewing your data pile?

Try making any accurate decision or try solving any problem when you only have part of the problem to create a solution from. It's impossible to get any kind of accurate or consistent solution from FOREX.

 

[ProfLogic]

Quote from marketsurfer:

ok. i don't and it doesn't interest me. in fact, i don't even know one hedge fund that actively monitors 1476 different instruments.

best, surf

I do but that isn't the point.

No, I can imagine it doesn't interest you. You have a hard enough time keeping a handle on what you do watch.
God forbid something could come along and make your investment life easier.
Too much damn effort to just set up a chart and test it.
Hell, that horse you rode in on is plenty fine to get you around isn't it?
Why on earth would you even need one of those new fangled horseless carriages.
Ostrich!

 

[Rabbitone]

Quote from ProfLogic:

They are extremely useful for cycle detection due to the fact they create natural cyclic oscillations.

You are correct. Volume has excellent uses with cycles. I have been using volume this way for many years.

 

[Dackster]

Three phases of 'buying volume' in the accumulative stage of a cycle. Why is the third phase smaller than the second phase, what's happening within the market? Surely the volume is not leading the price?



Dackster.

 

[Dackster]

Quote from theBuzz:

I use volume

Good stuff Buzz! Here is my question regarding volume. How can contracts be distributed if they have not been accumulated?


Volume leads price always!




Dackster.