Volume on trends

duard · Nov 26, 2005

Anybody else use cumulative volume analysis to make trade decisions?

For instance if a particular trading instrument typically reverses after lopsided volume of x- units. Do you consider a trend if x-unit increases before a reversal occurs?

duard · Nov 26, 2005

PDQ rallies but volume spikes to 25k shares in 2 minutes. Your analysis suggests that this typically represents a volume spike with a large reversal potential. If subsequent "spikes" occur at a higher volume but the reversal did not hold does this represent longer term strength and if so for how long?

hypostomus · Nov 27, 2005

All I can tell you is that in the case of my trading fetish, NQ, I tested the hell out of various incantations of that idea to no avail.

peilthetraveler · Nov 27, 2005

there is a book called "tape reading and market analysis" that goes into detail about trading this way.

psytrade · Nov 27, 2005

If you wanted to, you can trade this strategy End Of Day, as a supplement to your existing trading rules. Check to see that the Volume for 20 days is greater than the 30 day Volume.

MA (Volume,20) >= MA (Volume,30)

Cheese · Nov 27, 2005

This is for aficionados of volume.
Is volume a function of price or is price a function of volume?

duard · Nov 28, 2005

My volume spike hypothesis works but not in the sense that a particular target can be preset and assumed significance alone as a trading signal. But it does signal an event whether it was running of "stops" or initiative trading. I have not incorporated it algorithmically to my trading as yet as I have yet to find the optimal use for the data but my question relates to my belief that it represents an event worthy of attention.

Thanks for the responses

murray t turtle · Nov 29, 2005

Quote from duard:

My volume spike hypothesis works but not in the sense that a particular target can be preset and assumed significance alone as a trading signal.

I have yet to find the optimal use for the data but my question relates to my belief that it represents an event worthy of attention.

Thanks for the responses

==============
Duard;
Usually pay more attention to it on entry;
because on exit one has a profit,
or mental, written stop is hit.

And when the players take great care to keep the volume average;
thats fine also.

nononsense · Nov 29, 2005

Quote from hypostomus:

All I can tell you is that in the case of my trading fetish, NQ, I tested the hell out of various incantations of that idea to no avail.

hypostomus,
Do you realize the tremendous advantage you had before you gave this valuable information away? This was one of the most holy cows of TA. What is nononsense going to do now that he is going to have to play against that army of half-informed people?