The myth of volume as a leading indicator of price direction...

Discussion in 'Technical Analysis' started by HolyGrailSeeker, Aug 8, 2021.

  1. NazSherpa

    NazSherpa

    No - it's the entire data set from friday going back to october of 01 just a screen shot as suntrader asked me to post 'proof'
     
    #61     Aug 14, 2021
  2. userque

    userque

    The screenshot only shows the start of the data. The sheet, I'm sure, contains the rest of the data.

    It would be a really big screenshot to show it all ... right? :)
     
    #62     Aug 14, 2021
    NazSherpa likes this.
  3. Overnight

    Overnight

    *shrugs* All I see is volume of 170kish, and OHLC in the 1700 area in price. NQ currently has a price of 15,000, and an average daily range of 100+ points. So, not seeing it.
     
    #63     Aug 14, 2021
  4. SunTrader

    SunTrader

    Got a yellow color fixation. If you want I can change it. What's your fancy?

    But the point will still be the same. Proving with actual market data, not some disjointed spreadsheet output, that says 0.63 even though it is not significant no matter how much you claim it is. Happens all the time. Intraday, daily and higher. Large ranges follow small ranges and vice versa, large volume follows small volume and vice versa. Mix and match the two variables however you like.

    So when do you take the stock trading training wheels off and join us big boys over on the futures side?
     
    #64     Aug 14, 2021
  5. NazSherpa

    NazSherpa

    smh... It's 20 years of OHLC & volume for the NQ. Why would I fabricate that? It's not like I'm sharing some state secrets here. But it's frightening to me how the group of you would pounce on a statistically significant mathematical observation over 20 years of data. I'm simply offering empirical evidence to help the OP out. So I'll try this again, statement of fact: There is a high degree of correlation between volume and range in the NQ over the past 2 decades of data. If you are trading a strategy that is looking for continuation it might be helpful to take the current session's volume in consideration. I'm amused at the pushback. Just about all other the professional traders I know keep tabs on it and use it to assess the probabilities of a given outcome. I'm puzzled.
     
    #65     Aug 14, 2021
    comagnum likes this.
  6. tiddlywinks

    tiddlywinks

    Something I call Pro-Rata Volume can be used...

    Since you are using Daily data, take a volume reading every 30 minutes, just as example. Multiply it by the number of reading increments in a day. This will tell you if daily volume can be expected or anticipated to be greater than, less than, or about the same as the preceding day.

    Of course, other more obvious situations occur which lead to an expectation or anticipation as well. For instance, if volume is running for example at 80% of the preceding day, and its only 3 hours into the rth trading session, this could indicative of what to expect end of day.

    Honestly, this portion of the thread is why I don't normally participate in such... I just don't care if someone, besides myself, uses volume or not. And Yes, I make extensive use of volume, including Pro-Rata Volume as mentioned, in my trading.
     
    #66     Aug 14, 2021
  7. Overnight

    Overnight

    I am more puzzled than you are. Why is your 20 years of data showing an average NQ price of 1700 per day? The NQ has not held an average price of 1700 for 20 years. Or has it? Is the average price of the NQ, from Nov 2001 until now, 1700ish?

    So today, with the OHLC of the NQ being, say, 15,000 to 15,100, it's average over 20 years is still 1700ish?

    I must not know the new maths.
     
    #67     Aug 14, 2021
  8. NazSherpa

    NazSherpa

    When do I or did I? I trade both and have for nearly 3 decades? You're absolutely correct about the expansion and contraction of volatility. This conversation has nothing to do with that.
    I'm talking about the same session. You aren't going to get very far out of the initial balance on < 1x relative volume. Try trading breakouts on a day where volume is running .25 of it's average pace. Lemme know how that works out for ya.
     
    #68     Aug 14, 2021
  9. NazSherpa

    NazSherpa

    What is so puzzling about that? Any other diversions you like to make in the conversation? Are you questioning the fact that the correlation coefficient between the days volume and range in the NQ over the last 20 years is >.60? Please disprove that.

    Edit - I don't see an average. That's the OHLC for that date?
     
    #69     Aug 14, 2021
  10. userque

    userque

    I see what you're saying: extrapolate the end-of-bar volume.

    Even though we may not care what the other is doing, there is nothing wrong with reasoning together/debating/etc.; and all parties could potentially benefit. Glad you made an exception and decided to chime in.
     
    #70     Aug 14, 2021