Volume on a short term basis 1min or 5min is hard to glean much from it by comparing it to the previous bar or X number of previous bars - at least in my opinion. Current volume compared to the same time of day in the past is another story. Friday's ES for instance 5 minute volume bars versus 10 day average volume for each 5 minute timeframe (inside red box, cyan greater than avg, yellow continuing to close - greater than avg by +125% or more) and cross signs above before, during and after RTH open show increasing volume which fueled big drop once support broke - wide range engulfing candle @ 940am EDT signal to go short or all fake long only traders to exit :-
That's an interesting way of looking at PACE. In that, I haven't seen it used in that way. Immediate thought is, since time of day activity IN GENERAL is a "known" (golden hour(s), midday, last hour(s)), you have many event and even seasonal driven signals. For instance, for futures, pace will pick up in the days leading up to roll, as well as daily "news" items. I'll take a deeper look... SierraChart has a builtin study named Relative Volume which does this. Off the top of my head, I may having trouble in pursuing the idea with a null hypothesis basis. No matter, the important thing is to recognize changes in PACE! Thanks for the idea.
If price is going down and volume is getting less then it will likely go back up, or in a sideways in a TR to get more volume. If it were to keep going down volume would likely get less. If it is going down on less volume then it is going in the wrong direction. If it is going up on less volume then it is going in the wrong direction. Price probing is basically an auction where bullish and bearish pressures are probing to find areas of more transactions or trades. It is a probing of the interest to see at what price point more traders are willing to place more trades and execute more transactions. Markets are designed to facilitate more traders and to facilitate more trades taking place. Brokers want more traders, not less. In terms of real estate if nobody lists their house on the real estate market then there will be no real estate market. As the market goes down there may be an increase in volume at first but soon that volume will begin to decrease as less and less sellers are willing to sell at such lower prices and price will then have to go up to find more sellers (sellers coming back in) willing to sell. Or it could “in theory” reach a point of no transactions. Flip this around in bullish moves. When no one is willing to buy as price gets higher and higher price will have to go down to attract buyers. Putting too much emphasis on volume can cause a trader to miss out on an otherwise good trade. In my post above I showed a bear move and stated that likely volume was increasing. Why? Price previously had some sideways price action and now beginning to go down. However, a BO south can start on low volume. If I am keen on volume I may not take a trade because of low volume. But if I look to the left and see BO bar is a new low below the last 20 bars and the general trend is down then in spite of the low volume the context favors more of a move south so I will short it. However, if I was waiting on volume confirmation I would probably not take a perfectly high probability trade. The low volume would have made me fear taking the trade, tricked me, and I therefore will have missed taking the trade. Look at some charts. Say for instance, a chart that has a bearish context. You can have a bear BO on low volume that is a high probability trade but because of the low volume you might decide not to take a perfectly logical high probability trade. A little further along the same chart show a strong bullish bar or two so you think price has to go up so you go long, instead it goes sideways, then down. So you get trapped in a long trade. In the former you have a bear BO on low volume but get tricked into not taking the trade and in the latter you get a bull BO on high volume and get tricked into taking the trade and instead price goes against you. The volume was misleading on both trades. In the former it convinced you to NOT take the trade. In the later it convinced you TO TAKE the trade. In these cases it was not a leading indicator but a mis-leading indicator. In the former you missed out on a good trade. In the latter you lost on a bad entry. …ROFL. Bottom line: looking at volume is probably not going to result in making more money but more likely will result in losing more money by losing out on good trades and being tricked into bad trades. Conclusion: volume is not going to be that much of a help, if any, especially in intraday scalping. Extra large trend bars that are in a context of much smaller bars are almost always going to have bigger volume. I don’t have to look at volume bars to know this. I just take the trade in the direction of the trend betting there will be at least enough more of an additional move to give me a good scalp. I don’t have to see other indicators such as stochastics…etc I just act and take the trade. I am placing trades based upon Price action ACTION not volume ACTION. On a BO say south the market will try more than once to get lower as it is probing to where volume gets less. Once it gets so low where there are no sellers then if someone wants to buy they are going to have to bid up and take the offer thus price will rise. No sellers or few sellers then price has to go up. No buyers or few buyers then price has to go down. I usually don’t look at volume. I usually place my trades on PA action not volume action. Price is going to move where more volume will take place. Look at this chart below. Do I need a look at volume to tell me that a whole bunch of traders just bot on that big bull bar? Of course not. Odds are 70% or more that the market is going to continue up enough additional movement for me to take a profitable scalp. It was a strong BO from previous sideways PA and had FT. There will likely be enough more push up for a decent scalp. The market is going to price in the news. It doesn’t matter what the news is it matters how price reacts to the news and that will show up on a chart. Price is truth. All institutions have opinions on what the market should do on an upcoming report. Those opinions may differ. What matters is what price does. That will be obvious on a chart. There are about 200 or more larger institutions that control the markets. They cannot know each others opinion about the market. All that matters is what price does in reaction to the news. 50/50 chance it will go up or it will go down. Nobody knows how many dollars are betting the market will go up and how many are betting it will go down. You only know after the market starts to move and it's movements will show up on a chart. If there is bad news on bullish price you just buy and don’t worry about the news. News is useless. Price is truth. If news is bad but price is good I am buying. I don’t care what the news is. If news is good but price is bad. I am selling. If news is bad and price is bad I am selling. If news is good and price is good I am buying. Price will tell me what I need to do. I don’t care about the news. And generally don’t need to look at volume. At least not for scalping 1 to 8 ES points. The market can go up or go down on good or bad news. All that matters is how it reacts to the news. I don’t have watch the news nor watch volume.
My suggestion is if you really want to learn more about these kind of concepts just spring for Brooks course. The books are more for reference in IMO. I admit it is a massive undertaking at least it was for me (as I am not the sharpest hoe in the shed). I honestly know of no other person who deals with PA in such depth as Brooks. But everyone has to do whatever floats their boat. Happy and profitable trading.
he clearly says the book is for a trader who already knows a lot. it is an advanced course. the videos he has explained the basics. but he has not gone into the finer points. he just loves to discuss about markets. in a nutshell i can paraphrase all that he writes in this: markets trend and then range.......in a trend buy above bars in a bull ,below bars in a bear.......in a range sell above bars at top of range and buy below bars at bottom. difficult to argue with that. why then should you lose money? the cause lies in your entry exit and risk management or rather mismanagement.
it is very clear that market can go up on low volume as well as high volume. probably just as it can go up on buying and also lack of selling..... The most ridiculous thing that i have heard is that moves on low volume is not sustainable.....be that as it may, some moves sustain further than others ...and you have no way of knowing which will sustain for longer time. The truth is that NO move is sustainable......the million usd question is to figure out how long a move will sustain. the other bull shit is that a wedge is a reversal pattern......most wedges do not reverse..... in fact most reversal patterns do not reverse and fail.....what does fail mean? it means the reversal pattern only leads to a corrective move....
manipulating the market is easy........GS can manipulate the the ES upwards easily. what is not easy is profiting from that manipulation. As the Hunt brothers and their adventure with cornering the free float in silver, shows. because everyone is selling ,and will sell, high. Gs has to buy low and then manipulate the market up ,to have any chance of turning a profit.