I lost a bit this morning during my few trades... my 'entry signals' looked OK but the volume just wasn't there and things didn't quite work out. Is there any handy indicator that a newbie can use to chart intraday volume on the NAS to be able to tell when it is picking up, slowing down, etc. Obviously, if you're an old hand at trading you know this kind of stuff intuitively, but I'm looking for something to help out the tyro. Thanks, Mr. Toad
Yes, it has always peaved me that you cannot see intraday volume on any of the major indeces. There are a few things you can do: 1. Watch QQQ. Usually the intraday volume here gives you an idea, although there are some flaws with this approach that can mislead you. QQQ is tied to to the NDX, so the price of QQQ does not depend on the supply/demand for QQQ shares (the way it does for plain tickers). A lot of people use QQQ as a hedging tool, sometimes in the opposite direction of positions held or planned in underlying tickers. QQQ's are bought and sold to cover high numbers of options contracts. But even with all that, most of the time it is "close enough" for most people to assess the power behind significant COMPX/NDX moves. 2. Watch Naz Futures. While these are also used for hedging, I find the volume to be more reliable as an indicator than QQQ. Also, I find my CME NQ price feed to be more "real" than the QQQ price feed from AMEX which tend lag and be filled with late prints outside the real spread. 3. Depending on your realtime package, you may be able to write your own volume indicator which shows intraday COMPX volume. I did this for myself in TradeStation. Basically, I used the ticker symbol for Naz volume ($TVOLQ in TS) which reports the total volume, do some math on it bar-to-bar, plot it as a histogram, and color the histogram bars depending on the COMPX prices. If you have TS and want the EL code, let me know. One thing to keep in mind on intraday volume is that there are some volume patterns that are driven by time of day, more than supply/demand, and this is especially true in intraday index volume. If you look at a 5-min chart of COMPX with intraday volume, every day looks pretty much the same with high volume in the morning and before the close, with low volume midday. This can cause you to come to erroneous conclusions. For instance, a mid morning rally on declining volume may not be "weak" since the volume tends to drop off during that period anyway. Same if you are looking for "characteristic" declining volume through a technical pattern (triangles, wedges, whatever). A better indicator would be to track "volume pace" which uses averages of recent volume for various times of the day and calculates from that what you are "on pace" to reach at the end of day. The actual volume may be declining, but if your "pace" is increasing then you could regard the volume as "rising" relative to what the volume normally would be at that time of day. This could also be calculated and automated using Tradestation and $TVOLQ, but I haven't done this....yet. I currently get my pace information from a website (http://www.ttrader.com/stockchat/pace.php) which does it for half-hour periods throughout the day...enough to give a rough idea. Sorry that it took me a month to reply, but I hope that helps at least some. --Derek