You're posing two questions (actually three, but we'll set aside the extraneous stuff for now): (1) is all the information needed to determine the balance between demand and supply in the chart and (2) what extra information does behavioral finance supply? (1) Yes. If price is rising, then demand, or "buying pressure" outweighs "supply" or selling pressure. IOW, buyers are willing to pay the ask (when they are no longer willing, price stops rising, which is the basis of "resistance"). However, one need not have OHLCV. A line chart will answer the same question: is price rising or falling? (2) In many if not most circumstances, the "why". Why did price stop rising here? Why did it stop falling here? When and where and why did it start trending? When and where and why did it stop trending and start ranging? This at bottom is what Auction Market Theory attempts to answer.
None, all is in open, high, low, close, volume. You don't even need all these figures. But the problem is how to get the correct information out of these figures.
If price finds support (uptrend) or resistance (downtrend) close to a 9-period EMA, the trend is strong and the more times support is established on the shallow pullbacks to this mobile S/R level, the more likely the trend is likely to continue. If the Support/Resistance is established close to a 20-EMA or even deeper through the 20-EMA and into a wide-channel trend line, the easier it is to extract profits in either direction. The key question is how to enter with odds in your favor. Study the beginnings of new trends on static charts and look for clues surrounding the place where the trend gains traction. The two ways I've found to enter a trend on a pullback is to place a limit order in the vicinity of a S/R level based on the demonstrated strength of the trend with a tight stop, or trail a stop order to initiate a trade when price gets to the vicinity of the applicable S/R level. If you're entering around trend reversal price action, then it's wise to let the winner run or add to it if a new trend asserts itself. I use the EMA's as mobile S/R levels. I generally use trend lines to help me identify potential reversals.
%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% A 10 year chart can be real helpful, for study of trends, all data can also. Chop slop trend[aka range] is not so scary on a longer term chart. A trend change can be a problem.....LOL
OK. Your post inspired me to go and read up some of the free sources online for Auction Market Theory. Here are my thoughts. Still trying to digest it all. A market or an exchange helps with price discovery. Nobody really knows what the fair value of an asset is. Different consensus emerge at different times through the negotiations between buyers and sellers. A market or an exchange can also be thought of as a voting machine. Buyers and sellers vote on different prices. The price with the most votes is where the consensus is converging regarding the fair price for the asset. This consensus for the fair price can be measured by using heuristics based on time or volume (number of transactions). Measuring consensus for fair price using time: The principle here is that if the asset spends a lot of time being traded at certain price points, then those price points are likely to be good estimates of the fair value. To objectively measure this, we can divide time into discrete chunks (typically 30 mins), and count the number of intervals each price point occurred in. The price point(s) with the highest counts are likely to represent fair value. Measuring consensus using volume (number of transactions): The principle here is that if the asset is bought and sold a lot of times at a certain price, then this price is likely to point to the fair value for the asset. To objectively measure this, we can count the trading volume for each price point. The prices with highest counts are a good measure of the fair value. This is similar to volume weighted average price (VWAP). Usually time based and volume based fair values will be close to each other. But many times big players may try to manipulate the market (“If you wanna buy 1000 contract, sell 100 first”) thereby skewing trading volumes. In such a case, time based method should be trusted. One could also minimize risk by choosing not to trade at all when fair values are not clear due to divergence between the two methods. Regardless of the method chosen to count the votes (time or volume), the histogram of votes plotted against prices will usually form a bell-shaped curve (not necessarily Gaussian, merely looks like a bell). The central portion of this histogram represents fair value, while the tail ends (high and low) are the price points rejected by the market. These tail ends represent support and resistance levels. Trading opportunities arise when prices move away from the current estimate of fair values. Thus if the current price is entering the tail ends of the histogram (support/resistance regions), then one should look out for either a breakout or a reversion to the fair value.
Wow, I'm impressed. Curiosity is critical when studying the market as a prelude to developing a trading plan. Kudos to you. What you have is correct, but the details are largely unnecessary. Introducing too many elements into your decision-making process -- criteria, checklists, components -- will make the whole thing so complicated that by the time you've been through all this and decided to take the trade, it's gone. Therefore, simple is best. The perfect example found in books and in software sales literature is correct as far as it goes. But reality doesn't always cooperate. For example, the standard example, which is not difficult to find, consists of price hitting the top of what will become a range, reversing to a level where many trades are conducted, then falling to a level which will become the bottom of the range, then returning to the middle, then back down to the bottom or continuing on to the top and so on. So what you end up with is a lot of trades in the middle -- i.e., "value" -- with comparatively fewer at the top and at the bottom. If you know how to trade reversals and do so at the top and bottom, you can make some money. If you try to trade in the middle, you will most likely be chopped up in the trendlessness. And there are plenty of trends which have tons of trades along the upper level and the lower level, hence loads of volume, but relatively little in the middle, or the "mean". Sometimes price lingers at that mean and this will be revealed in a volume analysis of some sort, like Volume At Price. However, price will often shoot right through the mean on its way to the opposite extreme, creating greater volume at those extremes and two "value areas". Therefore, if you want to turn all of this to your advantage, you must get past software and theory and guruspeak and focus on what traders want to accomplish and what they're doing in order to accomplish it. Right now, for example, we are at the top of a long-term trend channel in the NQ. We've been here for several days. But at some point sellers will try to entice buyers to pay higher prices and price will rise, perhaps creating a more acute trend channel, or buyers will force sellers to accept lower prices and price will fall. The following chart was posted Saturday and provides an example: If traders want to take prices lower, or if they don't want to take prices lower but are dragged into doing so anyway, and you trade a longer bar interval, hourly or daily, you may have a nice ride down to the "mean" or even the lower limit of this channel. But even if you trade a shorter interval, something that can be traded within a day (15m, 5m, 1m), an understanding of what traders have in mind may give you a clue as to whether you ought to be focusing on the short side or the long. Some instruments, like this one, are simple. They're mean-reverting and all one has to do is trade the reversals, sort of like pinball. Other instruments are not mean-reverting and provide few if any clues as to what they're going to do, when they're going to do it, and how far they're likely to go. I prefer the simple, but not everyone does. Then there's scalping, which is still an auction market, but charts aren't going to do you much good, if any. If you want to read what I came up with after going through essentially the same process you did, see this, pages 31 through 42. You may find this to be more practical when it comes to actual trading and making actual trading decisions.
Then, at its most basic, it's a matter of tracking higher highs and higher lows (in an uptrend), perhaps with a trendline or a moving average. Volume just isn't all that pertinent as long as the trend holds.
Trend is where the bank is relative to where the price is. The bank is always on the profitable side of the price, while the 99% "successful" and positive-waves spewing internet gamblers are on the other side.