Since things are slow thought Id give my 2 cents on this subject. While I like the way volume charts smooth out price action I feel that watching volume compared to price gives you more information. The attached chart show ES around noon yesterday. Price had just poked above the morning high and was pulling back. Are we dealing with a reversal or a pullback? The time chart shows clearly that volume is decreasing on the pullback which indicates that we are dealing with a pullback and not a major reversal. Of course if we see volume suddenly picking up we can see it turning into a reversal. I found that when I experimented with the volume charts that I was handicapped by not having this information. I suppose one could look at both but it doesnt work for me.
Why do people use Volume, Range and Tic charts?
- Thread starter fearless9
- Start date
- Status
I agree. I learned price/volume and I'm good at it. On the other hand, I understand what ProfLogic is talking about and I agree with it. There is no incompatibility between what he does and what I do. And I suspect that if I were to spend as much time studying constant volume bars as I have the continuous price/volume relationship, I'd have no trouble with it.
Any confident trader with a well-thought-out and consistently profitable strategy ought not to have any difficulty allowing others who have different strategies from discussing them, unless, of course, he is at bottom an asshole.
LC
I suppose, since I originated this thread some time ago, I might as well throw my 2 cents into the arena.
I find now that I can trade range or volume charts more easily than time charts.
Each has something to offer and maybe I have now become unaccustomed to time charts. But I just cannot read their true intent as well as range and vol charts.
No, I do not try to read, simultaneous time and vol charts as I am not that clever. In fact it is the realization that I am not that clever
that forms the backbone of my trading.
regards
f9
I find now that I can trade range or volume charts more easily than time charts.
Each has something to offer and maybe I have now become unaccustomed to time charts. But I just cannot read their true intent as well as range and vol charts.
No, I do not try to read, simultaneous time and vol charts as I am not that clever. In fact it is the realization that I am not that clever
that forms the backbone of my trading.
regards
f9
You've missed the point of my post which is that if we are comparing two variables, time and volume, then we immediately see that price does not change because of time. Volume may come in at certain times, sure, but it is the volume that causes price to move not the time showing on your chart. Constant volume bars remove the illusory effect that time has some bearing on price.
Price moves when the supply is consumed. i.e supply and demand. This is shown by volume, I believe.
Hello PointOne,
I thought that you expressed this point rather well, very well in fact.
Two traders observing the same variables, then drawing two differing conclusions has more to do with their ability to expand their minds into the problem than it does with one being correct and the other being not.
Right and wrong has less to do with the mechanics of trading than most people imagine.
A couple of points to ponder upon in this discussion.
"what do you call a group of active traders"
I call them "volume"
The next point being (assuming you can see where I am coming from)
100K of contracts go rattling through the exchange.
It is fair to assume that these 100k represent a significantly
reduced number of decisions, otherwise you would be looking at 1 lot traders.
"should you be looking at the decision volume or the lot volume?"
No, I got your point. Mine was, again, that volume per se does not move price. Imbalances between demand and supply move price. The accompanying volume can be slight or substantial, but if the balance between buying pressure and sellling presssure does not shift, even for a tick, price won't move.
Therefore, the benefits of time vs volume can be discussed a number of ways, but the movement of price need not have anything to do with either, depending on whether or not buying pressure and selling pressure are balanced, and, if not, to what extent.
LC
You may be trying too hard surf,
Vol charts are simply showing you the trades as they enter the exchange and forming a new bar after a prescribed number of contracts. This number being set by you.
Vol bars do not have a personality, do not require testing, and make no demands on you to make sense of them.
They are simply a means of arranging raw data along with time, tic and range bars.
As far as having confidence goes, I think that this should be directed more towards your data vendor, charting software and front end.
On what basis a bar is formed has nothing to do with confidence.
regards
f9
thanks F9. i disagree on several points, but respect your opinion.
best,
surf
- Status