Hello Everyone, First time poster, been trading for a long time. I have used mostly tick charts and volume charts in my trading (probably like many of you). Although I think volume charts are less commonly traded. I am wondering if any of you also use volume charts, and how much volume makes up 1 bar on your chart? I typically trade ES or NQ, so hopefully this is the right forum as obviously it depends what one is trading. I also scalp for a couple of points. Just some suggestions on volume bar settings, if anyone uses them as well. Thank you all!
I would expect most successful futures traders anyway use mostly time charts and some tick. A problem with volume charts for technical trading decisions is that they are uncommon. In theory better than tick but not in practice in my experience though I am a very technical trader. Horses for courses, the messy history of decentralised Forex data etc. did not help I expect. The "self fulfilling prophecies" of some PA structures are a bit wonky as a result it seemed to me.
I do not primarily use volume charts, mostly tick charts. But on occasion I have used volume charts. I think that it really just depends on trading style. I've found that volume charts work better with scalping than other styles of trading (for myself at least). Hopefully some traders on here can give some insight into how volume charts have worked for them. Would love to know what type of settings, if anyone uses volume charts , that people have found useful on either an ES chart for scalping, or for the NQ.
I day-trade NQ, YM, and RTY index futures, and I use volume extensively, but not volume bars as you've described. As is the case with volume, range, and tick charts, the time element is eliminated which is a necessary datum for my trading methods. Additionally, the "shape" or "construction" of non-time-based bars must be witnessed in real-time to be useful. For example, sustained levels of volume or volume spikes can not be seen within a volume threshhold(unless witnessed in real-time). To be fair, the "construction" limitation exists but to a lesser degree with time-based bars. And we all know, price can and does move up AND down on decreasing volume as well as as increasing volume. I happen to believe that knowing what IS happening, is important. HTH
In my view, Volume is an item to be discarded as it is too much information that can be interpreted a thousand different ways.