No offense taken. I've read most of Al's stuff and it is fine sound reading from a fundamental standpoint but he has never done anything to solve the embedded problems that time and tick charts create. He created "work arounds" that DO work but are inconsistent. The difference between Al and I is that I solved the inconsistency problem of time and tick based charts. Other that that are philosophies are similar. He only has a couple years on me as far as trade experience but not nearly the computer research side experience.
And from what little I have read you write a hell of a lot better! I'm trying to think of something nice to say about volume...it's voluminous...it's voluble...it's voluntary...I'll get back to you.
There really isn't anything to say. Price is what is paid for an item and volume depicts the number of items sold at that price. There is a symbiotic relationship there that is inseparable but I love your attempt.
One day I will learn not to argue with you. But not today. My pitiful little world is NQ. That's all I know about, except for the stocks I hold for dividends. In my little NQ world volume has very little meaning because so much of it is hedging, buying at the top and selling at the bottom. The real action clearly is somewhere else, maybe options. It is rare that the net position at the end of the day is more than a percent of the total contracts traded. The number of net contracts during the day is usually utterly irrelevant to the price direction. Price moves tradeably with volume so small it doesn't register on the scale I set. Or does nothing on ferocious volume. But I have a little unused space on my screen, so I keep a volume study up. Hoping that something will happen there. Like I hope Jennifer Anniston will knock on the door looking to get laid.
with the discussion of voluminous Jennifer Anniston aside, someone back in 2007 said that not all vendors, namely tradestation doesnot offer true volume charts and the tick data from most vendors is tainted, so its best to use constant volume charts. Is this still true in 2010, that some vendors do a better job of providing volume charts than others? Thanks.
All data vendors have their problems. However, every trader has a slightly different expectation or need in comparison to another trader. Thus, if someone shows up and saids one particular vendor has cleaner volume data another trader will show up and say it doesn't. Simply, only way you're going to know if that particular data vendor will meet your needs is to try them for one month. Putting that aside, if you need volume as a price action only trader...go for it. However, eventually after many years of using volume you should be able to not need volume on your charts because you'll be able to see the volume in the price itself. Last of all, if someone is using volume as a key component of their trading...he should call himself a "volume base trader". Someone that's using moving averages as a key component of their trading should call himself a "moving average trader". I myself do not use any indicators nor volume. Thus, I call myself a "price action only trader". Mark
Bearmountain sent me a PM and they let me out of detention I'm still an early student of PA and honing my method, distilling it down to pure PA with a 20-bar EMA to clarify trend and channel. Read Al Brooks' book, "Reading Price Charts Bar By Bar". PA in a nutshell: Flat 20 EMA = range/channel/consolidation Rising 20 EMA = uptrend Falling 20 EMA = downtrend With-trend trades are easiest and most profitable (trading with a rising or falling 20 EMA). Buy or sell breakouts or pullbacks: Price in an uptrend pulls back (down bars), look to buy a break through a previous bar's high. Price in a downtrend pulls back (up bars), look to sell a break through a previous bar's low. Price in an uptrend comes from a pullback to test the previous resistance, buy at or a tick above the high. Price in a down trend comes from a pullback to test the previous support, sell at or a tick below the low. If trading a breakout, use a tight stop because a failed breakout (breaks a few ticks then reverses) is a sign the trend may be reversing. Counter-trend trading: All trends eventually end and here are some signs of reversal - Price has 3-4 pushes in a trend OR price has a strong push in one direction, consolidates in a narrow range, then has a breakout and another push in the same direction (measured move), look for reversal signals: A hammer (bottom of a downtrend) or shooting star (top of an uptrend) with a long wick. Usually trend will reverse soon. Short as soon as that bar closes. This is pure counter-trend. Waiting for the first lower high/higher low is confirmed counter-trend. The second lower high/higher low usually confirms the new trend is underway (the 20 EMA should now be rising/falling instead of flat and price should have closed on the opposite side of the 20 EMA) and produces the first strong move of the new trend. For a college-level education in PA, read Al Brooks.
There you have it, gentlemen. What else is there to say? Print it out, laminate it, and trade it every day.
I bought Al Brooks's book because of all the positive comments about it here at ET. I returned it to Amazon within 3 or 4 days of receiving it.