An alternative perspective,... Starting from the ending PA of the prior day, we have a short carryover. The overnight session was generally long with a new long traverse starting at 5:35 am pst with increasing volume above the red pace line of 2k contracts. This trend segment has a peaking volume at 5:50 am pst which becomes the pt2 of a larger channel as a volatility expansion. However this bar is not entirely long. The close of the bar is close to the 50% mark which is evident of a non-Dominance short traverse and is an anticipated retrace. The 6:05 bar XO the RTL yet returns to the Dominant direction. This is the FBO of this RTL. Volume is generally up at close to 2k contracts which on a normal day is slightly higher than average. This indicates the possibility that the day will have a larger than average participation. The 6:15 bar XO the RTL is XO which also tested the high of our pt2 but with decreasing volume compared to it. The bar initially was long but reversed to close near it's lows but found support at the prior bar's low and forms a StB (Stitch Black) with that bar. This particular price form is found frequently near the end of trend segments regardless if the trend segment is long or short. This could be non-Dominant traverse expanding this small long channel and with the upcoming US open we anticipate rising volume up until the open at 6:30 pst. We fan the RTL. The 6:20 bar is an XR (Translation Red) and forms our three points to establish the next trend segment. A RTL short is drawn. Since this bar XO's the fanned RTL we have a BO of the RTL but not of the lateral established with the H and L of 5:50bar. This is a non-Dominant traverse expanding our channel. We know this from volume decreasing compared to the prior bar. The 6:25 bar is a Hitch but XO of our RTL short. Since it is an IB (Inside bar) there is the possibility that the short trend segment will reassert itself. A fanned RTL short is drawn establishing a new possible pt3 short. The open at 6:30 has price continue short within our defined trend segment and breaks the low of the prior bar. However larger volume comes in to reverse this price direction to XO of the RTL short. This bar initially is a FBO of the prior two bar's low and completes the non-Dominant trend segment short. Since price reverses off the low a new fanned RTL long establishes a wider channel trend in that we have a Dominant trend segment (long), a non-Dominant trend segment (short) and a return to Dominance on Increasing volume. It also XO's the lateral boundary of the 5:50 bar's H. However, increasing short volume comes is causing it to reverse off the high. This is not a cause to shift the current bias until it XO it's own open changing it from one form of OB (outside Bar) to it's other form. Since OB's are workhorses and indicates two directions by which one could profit off the open, we wait to see what the next bar brings. Since there was a carryover short front the day before, we anticipate looking for a short entry off the current highs as PA presents itself. Since this was the third peak in a volume formation, (the trough at 6:20 was assigned as a peak since it broke the long's RTL. This is a little confusing in that the volume bar itself was a trough but the PA broke the prior's bar's low and the established RTL long), this form when combined with acceleration is known as a PP1 (pre-primary band). The next bar is assigned as a new P1 but we don't yet know which way. We now move to assigned bar numbers. The 6:30 bar is 1 and bars are assigned incrementally to up to and including clearing and settlement at bar 81. Bar 2 starts as a SYM (symmetrical pennant) these bars are generally the market catching it's breath before deciding what to do. We describing price and volume bars with consciousness but really it's the market's participants behavior we are quantifying. The SYM is long initially and is contained within our established long trend channel. However short volume overwhelms the longs to break the L of the Bar1 and XO our RTL long and green BM (bookmark) failsafe. We reverse short, annotate the RTL short and place a BM at the High of this bar just in case. The volume is high and surpasses 12k contracts testing the low pt1 that our pre-market long channel established. There is a retrace of the low which is the non-Dominant sentiment of this bar. The volume is less that the prior bar so even though it's a high volume bar it's price form is XR and volume form is T1. Bar 3 opens and continues the down thrust only breaking the prior low if one were to deGap the bar forming an XR in form. If one doesn't deGap then it looks as it looks and is an IB. The high of this bar with a deceleration of volume pace and the RTL short gets an updated annotation of increasing volatility by accelerating the RTL. Since price is off it's lows, we are in a non-Dominant traverse of this current short trend segment. A BM is placed at the low. Bar 4 opens as a SYM. Since it has crossed the accelerated RTL short we hold until it crosses it's open. The Dominant traverse has evolved into an A turn (D-nD) into a non-Dominant traverse. This could extend the retrace of the Dominant short and with the bar itself becoming a XB on decreasing volume, the Dominant Short is still intact. However since the bar XO the accelerated RTL short yet just touches the RTL short defined by bar1 and bar2 on decreasing volume, we anticipate increasing volume to arrive but uncertain of the direction. Bar 5 opens as an XB, XO's the RTL short (the line isn't extended to see it explicitly) and quickly reverses short. In doing so, it has XO the RTL of the non-Dominant long. This is occurring on accelerated volume from the previous bar yet decreasing volume when the volume bars of the trend (composed of the Dominant short, non-Dominant long) are compared. The bar itself forms an OB on increasing volume. This is a progression of trend. Unless more short volume arrives this trend is anticipated to reverse soon. Bar 6 opens as an XR, on decreasing volume and then retraces until it crosses it's open and with increasing long volume presents as a long bar. The high establishes a new RTL short, the form in comparison to the prior bar remains as an XR but the sentiment has changed within the bar itself for no increasing short volume has arrived. This is a possible FBO with a continuation short. We have to look at the initial price action of the next bar to determine. Bar 7 opens and continues short so it could be a fan of the RTL short, however it quickly retraces to the open and reverses long with increasing volume pace. Since it has XO the RTL short with increasing long volume, this is a BO of the T1 of the RTL short. We are now long. There is risk here in the context shifting rapidly. However since we are reversing long at a low, it's quick to see if we break the previous bar's low and thus drawdown is minimized. Bar 8 opens and the shorts attempt to reassert their Dominance, however without backup the move grinds up on increasing long volume pace. This could be a case where the RTL of the prior Dominant short reasserts itself and a fan of the RTL short would contain this. However since price has XO a RTL short and is increasing we hold long. Bar 9 and Bar 10 are IB of the H and L of Bar 8, therefore price is contained within a lateral yet we have earlier established a RTL long sentiment trend segment. This movement within the lateral is the non-Dominant traverse. This is confirmed with Bar 11 BO of the lateral. The price action within a lateral requires a different kind of logic. To get into that here would be adding more complexity. A shorthand is to ignore PA within a lateral and catch the BO of price in whichever H and L horizontal boundary it crosses. Bar 11, the magic bar. The doji. The doji represents simultaneously, indecision, pause for breath and a precursor to a increasing volatility. Price could BO either way and since we are seeing decreasing volume long it could be the pt3 of a new fanned RTL short. This is only if we see increasing volume pace short and price XO our RTL long. Bar 12 gaps down and can trap the trigger happy into the idea that short is Dominant. However, without it's first leg it goes long from the open and arrives with increasing volume long and with 12k contracts worth of larger players are entering. We get a slight retrace as the high of the bar. Bar 13 continues the increasing volume long pace as the second bar without it's first leg. We accelerate the RTL long since we tape the FFF (faster fractal first). This is the third P1 of this trend segment which is another PP1. What comes after a PP1 is an assignment of a P1 to the next bar that passes our screening. Bar 14 gaps ups, starts short XO of the accelerated RTL yet reverses long and stays within the RTL long. However since this is on decreasing volume and it's H creates a pt3 for a new RTL short we are now short. We'll use this or the next bar as our new P1. It's a risk but just as buying at a low gives a close 'line in the sand' the same is true for selling at a high. The angle of the RTL would require a lot more volume long to arrive to continue the markup. Bar 15 gaps down, retraces to a high before reversing past it's open. Since it by virtue of the geometry, the defined sentiment annotated by the RTL's - we are short. Since this is the last bar of this narrative, we exit flat. The commentary is similar for the rest of the chart. Perhaps this can illustrate the use of volume and price in bar-by-bar analysis to know where one is in trend at any particular point in time. Merry Christmas !!
In futures, there is open interest besides volume. It puzzles me whether one should consider both open interest and volume in futures analysis. Which is more important consideration? Open interest or volume?
If this is the case, then you should be easily able to marshal plenty of cites from Business Schools, academic journals, corporate white papers and such, that agree and adhere to the notion that volume just doesn't matter. It's a global world! And except for North Korea, they all pretty much uphold ideas like rational actors, efficient markets and, WHEN ANYONE HAS AN EFFECT FROM THEIR BUYING/SELLING IN THE MARKET, a description of how that volume will be made-up/absorbed/dissapated as the market seeks its EMH steady-state. So, of the 10,000 -- 100,000?? -- 10,000,000* Business Schools around the globe? Post away on ANYTHING that supports volume being redundant to price. Ohmilord, this'll be a Christmas to remember. * [You *do* hear Dr. Evil in there, right?? "Ten million Business Schools..."]
I think many might feel since price is in part caused by volume and yet when you see a huge bar and don't have "Market profile", you can't tell if there was volume all the way through one bar or volume at bottom and or top. But as in any indicator, trendlines to mark S&R or monkey throwing darts, can be way to reduce trades and must be done IMHO, of back testing and studying the stats. Just by themselves, nothing works all the time nor work never of the time. I lean on as prices drop against strategy system to add to position whereas many rather add on as trades becomes positive, each new rule either adds or takes away signals. Does any of it make a difference? It can if your back testing shows it will over ten plus years. I believe that providing you can read charts well, make one system when there is divergence based on higher highs and less volume to buy at Ganns' 50% retracement or sell at 50% retracement might in certain timeframes, both could be profitable or both can be losing trades. I this newer traders would do better that less is more and as your experience expands, more favorable signals added because the stats makes the decisions. So can you make a living in sport of Bowling? I think bowling has become less and less of dying sport, but those who never went, just like trading, skills make the difference.