Volume

I spent the a complete day looking at the time and sales.

I was watching gold as I wanted to trade at the same time if I was to stare at the pc screen.

I noticed the following:

1. Some times you have a flash of green orders its so fast it just fills the screen. But price moves very little.

2. Then you have a few of red ones that actually manage to bring price down even with only a few prints. But the momentum of the green is too strong and it wins.

3. Usually there is fight between red and green. It seems number and speed of prints matters but also (as mentioned) who can control price move with fewest orders seems to matter. (Though I'd hesitate to say that the ones that control with less volume indicate direction)

4. I tried to imagine where peoples stops were.

5. Price flew by this part almost to fast. I got the feeling people were some how left out and kept an eye on that level.

6. Its very hard to imagine what is actually going on. I tried to look for a big player, yes there was volume, but I just could not see entry and exits of the "big smart players" (of course it was intra day)

7.When there is allot of green prints. Price moves up 30 cents and then few red trades pop up trying to lower it back down.

8. These few red trades that seem to try to "reset" price (back down 30 cents) Seem to pop up out of no where.

9. Its almost like they have to stay on top. As soon as pace slows a bit they pop up. Then a string of greens come and bring price up 30 cents. As soon as pace slows down a red "caps momentum"
So pauses as capped and its almost like red is "claiming the market." but doesn't.

(I use red and green cause I will be honest and don't feel it is fare to call it buyers and sellers.(

11. If you have fast volume of pages of red orders this means some one is buying those sales. So though they are red, buyers are actively buying those sold trades. It is hard to that the difference between a buyer and seller is a cent spread


12. If markets are dominated by an entity. I would have to say this. Markets have buyers and sellers, orders need to fulfilled. I get the feeling that which orders are being filled is where control is. (I understand the argument here)

14. So how are these orders being filled? Who is on the other side? Maybe its market orders vs limit orders ?

Still I dont understand; stops, green vs red, market vs limit and volume vs number of contracts sold. But From what I saw, looking at the pace a volume bar grows on a chart is about the same as looking at time and sales.

(Granted my chart and Time and sales were on different platform and I might of been looking at the wrong time and maybe gold is different)
 
In looking at the lower volume trading I can say that volume is not number of trades but rather number of contracts, orders on the level 2 are limit orders that just sit there waiting to be filled. Market orders makes them become a trade. So what we see on the chart is the flow of market orders.
I'm not sure why I had trouble with that, it seem obvious.

On the level 2 we see the limit orders, They change as people make adjustments. I guess they would represent the resistant in a perfect world. I can only see one level of them. I know before Id see 5 levels and most orders are cancelled last minute.
 
I am looking at one tick flat range trading very slow at midnight.

People (market orders) come in and buy and sell from the limit level 2 book.

Lets assume there is only one person placing limit orders to feed to the people (market orders)

When people buy they get 1492, when they press sell they get 1491 ( rounded off)

They are buying and selling to the limit level 2 book.

So in essence he (limit level 2 book) is simply wiating for people to buy off him at 1492. when they try to sell they end up buying off him 1491.

So the spread goes to him. He sits and collects a penny day by day, God forbid some one else decides to the same thing ( I would imagine if he saw this he would shack us off.

Now, to protect him self he has to make sure that price does not get away from him. So he needs to have allot to offer people who want to buy and sell. He keeps on hand enough stock to supply these people.

As people sell to him at low price. He gets a good deal, and in turn would like to sell those to people at the higher price.

What if a big buyer comes in ?

what if some another scalper comes in ?


Built in to the system is a fail safe. (this is just what I gathering)
when he offers something for sale it is not really offered. at the click of a button it can be cancelled. This is ingenious! when we want to go flat to protect our selves we need some one on the other end and there is a delay. his transaction is just an offer to buy or sell. to cancel does not have a delay.

So one can put to offer big amounts and cancel fast. I can see that when one side of the book is being adjusted so is the other. As if it is the same person.

If other scalping completion comes in, his order is the already there, It in fact never gets filled! he just keeps adding to it when people take too much away. (I think if one adds they keep their place in line)

This would explain why the FIFO orders are not fare. It is not the first offer in is the first offer out, It is actually the first person in is the first out.

As price was falling heavily he must of started to buy every thing creating a price block. This is allot of money. If another huge seller came in and doubled the volume the guy would be stuck holding a bag. (assuming he is not hedged)

By doing all of that he has alot of stock to sell he sells it at a higher price, so there is actually resistance above until he has moved his stock.

Once there is no more, to sell, he may let price drop a bit so people begin to sell out of fear, he then would buy these and sell it a bit higher creating a fake break out.

Also, he knows below him is a bunch of sell order from people that put stops(of which he may be in front of). He can always buy from down there, once it is not so big that it will move price down. So he is buying your stops and selling it to new buyer in a manner that holds back the flood gate of stops (One by one)

So to answer the question (I think it is this thread)

"Who controls the markets? " (buyers or sellers)

I would have to say none. It is the people that have a stock of buy or sell orders which is jumped in front of yours by means of holding a spot (adding to limit orders) He is the buyer and the seller. He will make you wait and wait until you give up and your stop loss is removed and sold at market through him. He waits you out. Like you every one has a similar time frame of patients. They all loose patience around the same time and as soon as you make your move so does a bunch of other people and only then is he done or reverses.

This is all a theory,
 
Quote from iamdom:

The missing elements will never appear

1. Assemble the filter from seven criteria. (read the list and read the values. They appeared.

2 Look at the volume three varuables.DU, FRV, and PKG. They tie to one average by a decimal value. 0.25; 0.65 and 1.80


3. The Universe is sorted by one variable.: Unusual volume. = present volume/65day average volume

They have appeared.

and have never been revealled because the system is a fraud.


enter when FRV occurs. sell when PKG can't be maintained. DU is when you wait. Scorewise you enter on 0 to 7 and hold thre 6,5 an4. You sell when 4 goes to 3.[color]

You can not reduce an open system like the market to a mathematical system.

some can some can't. You are a person who can't use what you are given.


The market is not a closed linear causal mechanical system.

Of course it is NOT.

Each moment is a new beginning.

Of couse it isn't. Trends are a series of events that follow an order. Event have names and are defined mathematically bar-by-bar. There is an order: B2B 2R 2B.

When there is a terrorist attack and the market reacts how would your channels have predicted this(?).

There is NO PREDICTION. 911 came. I saw it on volume and price on a commodity. I was short and went flat. I also said to Liz to turn the TV on. The markets opened and then they soon closed.

Everyone did thir best.

This is an extreme example but this is exactly how the market works.....news, roumers , earning reports, fat finger, endless new information entering the market impacting the supply and demand dynamic.

For these I go in on the open and follow my rules. Some trades last hours instead of three to five bars. If I have an 89 point run per contract in ES, that is how it goes. I operate from rules and they are comprehensive. I enter on bar one and reverse for each segments of porfits. I do my routine. It is complete. I log it for reference. I annotate by rules. I do not hope, not predict, nor bet.

Trying to follow and measure this using a mathematical model will not give you unlimited predictive power.

I NEVER predict. I start a trend and bar-by-bar I keep giving names to bars according to their Relative datbase managment system activities. All are defined mathematically and completely. As a trend goes to completion I hold my position. When the trend completes I reverse to take profits and go with the next trend.

Your channels will not always make sense.

When I draw a channel it is correct. If someone draws a channel incorrectly; I fix it for him and watch him improve.

Yet all you need is price and volume.

It is all you have actually. So use the independnet variable and dependent variable and do algebra following the rules of algebra.

The market reacts and reacts to the reaction. There is nothing else just the endless cycling of supply and demand.

I would skip all of this for making money. just use the systems rules bar by bar. You are always in the market and always on the correct side of the market and making money segment by segment.

You can watch it all unfold when you understand this simple dynamic.

peak to begin- trough- peak- trough- peak to end and begin. 0 to 7 and buy to 6 to 5 to 4 and sell. repeat over and over. DU DU DU FRV (buy) hold to pkg pkg cant keep up SELL

You can build a successful system based on supply and demand.

Bullshit

The reason jacks followers try so hard and get nowhere is because they reach a point where the mathematical approach ends.

This ATS mathematical approach has a name for everthing. The name has an equation. you log and annotate bar-by bar. Thus trends are there and defined as always. It is a routine that is learned by working to follow the rules.

We call it boot camp. Noobies often invent and take shortcuts. This means they have to unleran and relearn . They screw up often. To quell these mistakes we work with them on GTM. we say hello and I announce the opening entry before the market opens. we go in the market within 12 to 30 seconds.

I narrate every bar, every annotation I do and I dictate the log to complete the three steps to find the each bar name.

I announce the possible endings and show how the correct one funnels down to the present as the future comes into the present.

At the end of the day my chart is emailed to the participants. They are are doing projects in various parts of the country.

You will need to come up with a special rule at infinitum and the system will become infinitely complex..

For inventors it does. For others they do see nuance and they make more money, Very few step into their own invented shit for a very long time. They relearn from a mistake and do not make the mistake again.

And here Jack resorts to his conniving ways, being vague, tell you to develop your mind, change rules, introduce new BS.

I notice something is new to a person when he is just catching on to what others have been doing. People help people because they have had to reason through things before. I have seen poeple learn as fast as I can teach. You are not one of those. you need repetition and you need to rewrite the rules to stop changing writing what you thought you heard.

It is so simple even a fifth grader can get it yet no one ever has.

The GTM comes on. You trype the numbers. every one says hi and welcome. then they chat with each other until I ease in and set up my degapping on the chart they now see. we review the carry over and how the trend will end sort of soon.
I haven't decided who to let call the trade. I know I will get a voulunteer. and if he goe off a little someone will correct him and then a Q is asked.

It takes a person unlike you to "get IT" that these people are NOT wasting their time and they can afford the time, daily. So maybe you may be able to figure out that since 1957 one way or another this is always happening. It is good to be a quitter and believe no one has ever gotton it. That is who you have become.

He is playing you in a clever way, he appeals to you and blinds you with the lure of the holy grail. Once he has you hooked you will never give up and your ability to stay critical and objective is mortally compromised. He has your emotional brain controlling your rational brain. You will overlook even the most obvious and you will see his faults as your own. The fact that you have fallen for him is a sign that you will probably never become a successful trader.
You seem like a nice person but stop being naive and a little Hershey's kiss. Wake up before its too late and you become the full size nutty Hershey.

By reading this post from your advisor, you now have the basis to not use PEP or its three applications. It is a really lousy idea to sit in GTM and have to lisen to a BS'er all the time as annotates and calls trades and answers questions.
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I had a fav guy who was a Vietnam marine with severe PTSD. All he had was a PC, an account and a traing room he build out of his wife's art room. He started right off in January and traded stocks until April. 27K in four stock streams His team met every sunday to get their Universe, calculate the IAS's and fill in the columns of the Hot lists and Owned lists.and keep them up to date.

62 trades in 3 months. 60 winners, one wask and one loss. His annualized take was 150K on 27k. by april it was up to 250K.

So he quit. He wasn't making enough money.

At my office he clocked me @ $13,000 in 9 minutes. He said it was hard to read the account as it kept spimming. So he learned SCT next.

He doesn't feel too good these days. He can't talk anymore and has a feeding tube to eat. His mouth won't shut and he grew a beard.

I don't have an alarm clock, so he texts me every am to wake me up. He never misses.

He is going to be married a year on the 29 of Feb. Then his vet stuff kicks in for his wife. His PTSD has a hitch; he also now is finishing up having ALS. He has trained a lot of traders all of who do things to help out. He is my head printer and puncher and he always shows visitors around the office and connects then to the network. we built.

He types into a machine that talks for him. his other machine flips on and pulls stuff out of his throat so he can breath. We both use bipaps at night and he doesn't use oxygen as do I.

His son is on a list to get new lungs; he feels good that we took care of this financially.

I like the way he can teach any noobie how to get rolling. He laughs at people who skip doing the work to build their minds.

Sometimes he drops in when I am working to set up medical programs to get people fixed. This month is getting hips revised where they put in cobalt (FDA screw up) which goes galvanic and messes with other parts of the body. So does the X linked PE. and CR.

Your post is an incredible comment on your ways and lack of this and that. After you post your first fifty logs and charts, Ill ask you to help others.
 
Quote from traitor786:

In looking at the lower volume trading I can say that volume is not number of trades but rather number of contracts, orders on the level 2 are limit orders that just sit there waiting to be filled. Market orders makes them become a trade. So what we see on the chart is the flow of market orders.
I'm not sure why I had trouble with that, it seem obvious.

On the level 2 we see the limit orders, They change as people make adjustments. I guess they would represent the resistant in a perfect world. I can only see one level of them. I know before Id see 5 levels and most orders are cancelled last minute.
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These are good observations. It is important to be able to spot momentum because that is a good time to jump on board. It is also important to be able to spot exhaustion which is the other side of momentum. Changes in the supply & demand balance for whatever reason, maybe through the process of accumulation or distribution, or even news, will lead to imbalances in buying pressure or selling pressure. Price and volume can be used to try to see whether we have exhaustion or momentum in either direction, or as is usually the case, mostly confusion and nothing significant. Changes in price velocity relative to changes in volume will give clues as to whether price has stalled or has momentum.
This is not an exact science and anyone who tells you that they never lose or that they are always in is simply lying. If this were true they would be the richest person on the earth and they would have been on Oprah. JH is the Lance Armstrong of trading, all one big lie. Talk is cheap, internet talk is as cheap as it gets, and braggers are never the real deal. Success leads to humility, a troubled ego leads to bragging.
 
Thanks,

I'm not too sure how to measure price relative to volume yet, I imagine there is an indicator for it. Last night I took my observations and conclusions and tried to invent my own indicator (actually, I was just testing a theory). Maybe it is the indicator you refer to as accumulation and distribution?

What I did was try my best to sort through the volume and separate red and green ticks of volume.

After this every red and green trades were separated and added together.

The idea was that the market maker would need to try to balance out his orders so as not to stay holding a bag for too long.

The orders were processed maybe there is a 10% error rate? but it can also be higher, Its hard to tell as each candle can have multiple types of orders. A down load of time and sales would be e precise. How ever the numbers are TOO consistent to doubt.

Day by day, hour by hur. It was incrdible! One can conclude that the market maker rarely allows trades to favour one side by more the 20%. usually he matches the buy order vs the sell order to 90%.


The Theory I was trying to prove is that value of what he buys and sells needs to be at a profit when balanced out. I did not make it that far, but the strength in the consistency what I saw was Too strong to Explain.

I know that 1 also can also get ecn rebates by trading.

It was uncanny, why would number of people that buy at market equal the number of people that sell every day every hour? WHY? NO really Why?

What,s also impressive is the ratio of buy to sell order goes up as price goes up and vice versa. Charted out, one has difficulty distinguishing that data from price itself !

Why ? And is there an indicator that already calculates this ? There is no way I am the first to do this.




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At the moment, I am a short term scalper or momentum trader and I use level2 and T&S, no indicators. Maybe there are useful indicators for longer term trades but for short term they would lag. What I look for is what happens to price when volume picks up, especially at support or resistance. Its nothing new but I have not found anything more reliable. It is important to try and follow what is happening and indicators will take you away from this. Why do channels, pullbacks, reversals or any pattern form because of supply and demand? Focusing on price action alone works for me.
 
Yeah I look at teh level 2's I can get an idea of when things are switching to the other side, but they switch one way and the then then other so you Its good for a few cents.

But honestly lookting at a tick chart probably just as good.

The indicators help. Get it out of your mind that they are leading or lagging

People watch these lines and every thing you see is seen by others. Any thing will do . I stick to drawings . They always have some reasction
 
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