The only 'way' I want 'it' done is for people to express themselves clearly and provide arguments and evidence to back up what they are saying. If you think this is unreasonable or somehow wrong, I don't know what to tell you. I guess we have different approaches. I try to write coherently and make sense and you write stuff like this: 8. The prior step is where the first derivative of volume goes from 0 or a persistant low constant to an accelerated value. That is, the volume velocity is seen to be increasing from a constant prior very low value caused by just a variety of market orders hitting. I've tried very hard to understand what you are trying to say. I've given you a lot of my time and attention. I've read and re-read what you've written. I've thought about it and attempted to come up with possible things you could be trying to say. In the end what you write is either gobbledigook (what I don't understand) or it is incorrect (what I do understand). In the latter case I've provided a few examples above. Finally you say that I want 'conventional wisdom' verified. In fact, if you had been paying any attention, you would clearly see that I'm trying to challenge conventional wisdom (when it comes to giving volume so much consideration). [sigh] If you want to be constructive, I suggest you look over what I've written in response to your posts (prior pages in this thread) and give me feedback. If not, you can just continue to post strings of words handcuffed together.
Ok, I know a lot of people complain about your language use, but I tried to get through all of this despite the fact that it read like an econ theory paper. No maths, no proof, just abstract concepts. That said, I would greatly appreciate it if you could answer some questions on this post: a) the first derivative of volume = volume velocity(transaction speed)? b) "At this time when new information arrives, it is observable as the how the information affects the size of the nearby groups. No one need track the new information per se. What is important to do is observe the size of the groups near the trading price. Long before the trading price changes it is very apparent that there is nothing that can stop the pending change coming up for the very reason that the smallest nearest group is dissolving to no size at all." - Is this in regards to only an EOD/swing perspective, or also short-term? So, let's say an uptrend is forming. When you say the smallest nearest group(assuming the current owners - I know this cannot be known until after we see which group - bids or offers size is dissolving) is dissolving to no size at all, you mean that they are pulling their offers back(cancelling, amending to a new, more favorable price), right? So then, any suggestions how to filter for this type of activity on the ES, YM? At the same time(step 8), more and more traders start getting anxious, lifting whatever the nearest offers are(chasing price), and hence the volume velocity picks up? I think Nononsense or Nitro coined this the avalanche effect in another thread?
I use volume... yeah, usually breakouts that occur on low volume retrace right back to their prior range, but if you look at sharp climatic moves, you will miss out on $$ if you are waiting for volume to confirm the retrace move. One of my fav psychological plays is to go long on a stock that has fallen a great amount in a few days...each day worse than the prior with increasing volume. I go long if the last down day is huge with several times the ave volume. Now....this stock will move up easily with very little volume....simply because there is an imbalance in buyers/sellers....in other words it wont take much to move the stock up (path of least resistance). These plays have made me good $$$ in the past. 1 or 2 pt moves with little volume. On most other plays...i do not wait for volume to confirm....if you wait,......... well you know.
I see volume in the same light as the chicken and the egg. Sometimes price is leading, sometimes volume is leading. Have not looked at volume in years, my system works fine without it. Sherlock
Just two thoughts: "Buy and Sell should always equal so volume increase does not matter" One must first distiguishe price driven and order driven market; In price driven market (US markets) Volume is clear an important signal associated to price as Market Makers have no choice but being on the other side of the trades and providing liquidity. This is what they are paid for. Second even in order driven Market, Information assymetry will lead some category of buyer to step in when crowd is selling and Volumes increasing (or vice versae). Last intraday volume information can be totally blurred today by Algorithmic trading tools : These tools objective is to beat some predefined benchmark such as VWAP, for a buy order for example they willl generate sell and buy order during the day that will completely blur Volume and price signals and that will at the end of the day allow them to reach and potentially beat the benchmark. So the old signal may be in some instance totally polluted by these tools.
In my opinion, volume is not consistent. Volume varies from provider to provider. In Spyder's journal, for example, there have been instances where FRV was met on one provider, and not another. Volume is also calculated differently from exchange to exchange. Block trades can also distort the picture. Price is the only consistent and absolute indicator. Regards Oddi
The slow downward drift is something that has always fascinated me and one of the reasons that I lean heavily to the short side but am not clear on what causes it. I just think of it as gravity.
Which is more likely to signal a reversal, a low volume hammer, or a high volume hammer? Both are white hammers, and both are reversing off clearly defined support.
This seems like a very dangerous play for individual stocks, even for mega-caps like IBM (see April). I'd think you'd need to go for alot more than just a few points rebound to make up for the few times whatever news is coming out has not yet been fully priced by the time you are in. Setups like these are very susceptible to optical fallacy of cycling through chart histories and saying "I would have bought there (last down day with huge volume)" when often times the days prior to the final drop will visually qualify as a buy signal in terms of price and volume when that actual last day is taken out of the chart.