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Just buy dips on high volume

  1. Looks like these are commonly turning points. I mean I guess you could try to wait for a trend to be established but I feel like that's not working.

    See the charts. Price goes down, and then it goes down, and then it goes down on some big ass volume spike and then it goes up.

    Seems like this is a good starting point for building a system.
     
  2. There it is - plain as day.

    Or are you yet another ET long only "trader"?
     
  3. Gotta love the amazing ideas here
     
  4. google "wyckoff volume spread analysis"
     

  5. Hahaha thanks for that, cool stories! Double down, baybe!!!!
     
  6. TLDR
     
  7. i am always suspicious to bright fresh ideas that appears in trader's minds during the corrections, especially when support and resistant still work perfectly
     
  8. Isn't something being down on big volume supposed to be a bearish sign?
     
  9. I had this idea a while ago. It has nothing to do with what just happened.
     
  10. This is like anything else, no one has any idea and no one can explain anything. Have you ever talked to someone about support? All the people can't agree on where it is.

    People say sinking price on high volume is bearish. I'm not sure, man, there seems to be a big jump in volume when price is done going down.

    How I'm talking about it looks like.
     
  11. this idea does not work... imho
     
  12. No absolutes - either way - in trading.

    S&P volume this week, with a trading day to go, is the highest in over a year.
    Maybe it will end with a blowout bottom. Maybe it will continue to drop.

    Funny many a talking head were on the boobtube yesterday saying the damage was over.
     
  13. %%
    IF only people agreed on every thing- wouldn't any market get simple then ?? LOL What makes you think we want all using a 200 day moving average. ??OOPs; we can't even agree on what kind of DMA, simple, weighted, ema, Hulls ma, double ma......Good question .:cool::cool: DOW/DIA may not have support like QQQ; and why should it?? NOT a prediction
     
  14. Your posts are hard to read.

    When you're not predicting you're doing it wrong. All trading is predicting, either direction, volatility, correlations strengthening, arbitrage is predicting, too, that a price difference will continue for long enough for you to profit.
     
  15. I must be onto something as everyone is telling me I'm doing it wrong. If I made a thread about Aroon indicator or something everyone would be like seriously, that's a good thing, you should keep studying this.
     
  16. High volume at specific bottoms.
     
  17. Now you have to understand when the volume is done increasing, because decreasing price on high volume might have another decreasing on higher volume after it.
     
  18. Dang, that's prediction.
     
  19. I will double down on the long or short side if I get an additional extreme buy/sell signal...or price goes to significant s/r. At this point obviously my first Trade was early, and if price went up/down too far I might take a break even stop on that first part. I won’t buy/sell a third time, because at this point I will assume I am wrong and be trying to get out of my double position at break even.
     
  20. + 1

    But not just at a swing low compared to the previous bars lows leading into the swing low but between the volume at that swing low and the prior swing lows before.
     
  21. what?
     
  22. Compare A to B and C. A and B were similar volume but A was lower price and A was much lower in volume than C ... which says selling is fading. Also notice after A low was in place big volume did not come in right away unlike previous lows B and C, which tells me it would sustain - the other two pops were panicked shorts covering mostly not new longs:
    Swing lows.png
     
  23. Can you elaborate on this?
     

  24. There are no shorts panicking. Short positions are unloading and taking profits in C and B. Price is decreasing, with volume (in general) also decreasing. Decreased volume = decreased transactions. The down move is running out of steam.

    None of this matters though. The "why" isn't important. There isn't much additional egde, if any, by looking at volume. A simple trendline will suffice. You can see that the lower channel line wasn't being touched by B and A when the downtrend was running out of steam. This is also a hint that the move is ending. Volume isn't needed. Sometimes it's helpful as a visual other times it's not. In the end, it's just adding additional criteria to make a decision instead of just following price itself. suntrader.png
     
  25. Ooooobviously not all shorts are panicking OR taking profits. Geez. Agree move down was running out of steam as I said previously at A volume was less than C and about equal to B.

    As for whether none of this matters or if enough additional edge is gained is for each of us to decide.
     
  26. At low A initially volume did not increase as at low B although it was similar to low C. Most reversals, that hold, start with muted volume that increase once "everyone" else notices what is happening.
     

  27. Yes, poor wording on my end regarding shorts panicking. I see no additional edge in volume, and I've studied it. Just trying to save OP the time.
     
  28. %%
    Usually not this dramatic;
    but a ten year chart of URE ,volume tells a lot.Maybe not a frequent help. Buying dips in a bear trend/market is a good way to lose lots of money regardless of volume.:cool:
     
  29. Seriously, from looking at that chart I'm surprised price didn't reverse at the 14:05 candle.
     
  30. Alright, yellow line = no, green line = yes

    I have no idea what happened around 7:15 because the volume overlaps with price.
     
  31. 1a2b3cppp, interesting. Question - why is your line between 7 and 7:15 yellow? It looked like a down day on big volume - shouldn't that be green? Thanks.
     

  32. Seriously?

    In real-time your green or yellow line thingys would not have been recognized as you've marked. Just look at a few bars prior to each. How do you know in real time, the context of what a trade-able peak is?

    You have a computerized way of backtesting your theory, I hope.
     
  33. bump for 1a2b3cppp!
     
  34. Possibly it should. I wasn't sure which candle it went with since the chart was so zoomed out. Price did ascend after that.
     
  35. Precise. I mentioned this on page 2.

    That's why you average down.
     
  36. Green line = good! black line = bad: See the line right before 10:30 which did not work
     
  37. .
     
  38. Green bars profitable, black bars unprofitable. The second black bar is black because despite being a bottom the subsequent candle went pretty low thus stopping people out.
     
  39. Untitled-15.gif
     
  40. the black lines didn't work, green line did. Untitled-16.gif
     

  41. so wait. are you saying you cant see those volume indicators that seem to be a key in your theory until after the fact? that would seem very important. your work around is to average down? where so you start averaging? or is this still being fleshed out? :)

    Very interesting.
     
  42. You start at the open of the following candle. Average down based on price movement.
     
  43. Many winners appear. Untitled-1.gif
     
  44. So, 1a2b3, this is very interesting, but are you going to develop it? So you wait for a down bar on high volume, and start averaging in. How much of your portfolio per each average in, and over what period? And when do you stop averaging in, get out on the downside (it keeps going down and down and down), and get out on the upside? It seems that if you start averaging in when you have a down day on high volume, a lot of the time you are going to be picking times when it has a looong way to drop, even though many (most?) you will be picking times when it is about to turn around.

    Seems your strategy is very much opposite the chart/etc. that suntrader was posting.
     
  45. Too bad I don't still have SierraChart, I could code this up really fast to identify the lines in real time.
     
  46. I don't know. Increase down to 4 points on ES, close at 2 points past original entry and let one ride in case you pick the low of the day? This is what I just imagined right now.
     
  47. A few years ago I explored 5 second volume charts. I need to explore these again.
     
  48. Today didn't really work that well. Untitled-2.gif
     
  49. I don't use anything like this, but here's one idea on this method: in the case of a long, wait for the next bar's close to exceed the signal bar's open. opposite for a short.
     
  50. However I look at this I think that it could work for shorts, too. We are calling tops and bottoms rather than looking for trend confirmation.
     
  51. Not too many successes here.
     
  52. What happened today in the afternoon, how come there was so much trading? Including shorts on this one. The two in the middle are not green because price didn't go far enough in the new direction before switching. Untitled-8.gif