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I too am trying to learn T&S, and to that end am evaluating market profile-type software that lets you see Bid/Ask volume at each price level on a bar chart. My question relates to what I'm seeing in the cumulative volume delta and Bid/Ask/Sales for each candle. |
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I really think it's important to completely understand the raw data in trading. There is not very many variables (Price and Volume, that's about it.) BEFORE you start using more complex tools to analyse the raw data, or present it in another form.
This is an important point, if I could stress it more, I would.
Every single indicator or data tool is performing a calculation for you, and displaying the result. If you are going to make a decision (buy/sell/wait) based on that result, you need to understand the a) the underlying data and b) the calculation being performed.
Indicators are really just like math formula's. You should use them to calculate a result that is too cumbersome to do manually over and over again.
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YM trades down all morning on decent volume but at some point around 10:30 AM there is a 60 point rally but I'm seeing only negative volume delta for every single 3m bar and the bid is getting hit at 5 times the ask.How is price going up if the "tape" shows only selling by any objective measure?What else moves price besides hitting the bid or ask? |
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Whoa, whoa whoa.
Negative Volume Delta? Why do you care if volume is decreasing at a slower rate? and why 3 minute bars? What is 'decent' volume - are we comparing volume to an average in a 'look back' period? Do you see my point - there is nothing wrong with these specific things (I don't want to have a discussion about them), but you really need to understand what you are looking at, and most importantly, why you care about them.
Honestly, spend a week without charts, and just watch a price ladder & a time & sales window. I'm guessing you probably just need to be more familiar with the dynamics of how the market actually works - the mechanics of the auction process, etc.
I don't like talking about specifics, but this myth about needing complex tools to earn good money is just complete bullshit. Maybe people assume that successful traders "out there" all use hi-tech tools. All of the people in my office who earn 6 -7 figures a year have the most simple trading setup you could imagine, just using a price ladder & basic charts with no indicators. Just bars/candles and volume. I'm still waiting to meet a trader with a really advanced setup who actually makes a good living.
Time and Sales is showing you the end result of everything you need to know in trading. Buying and Selling. At the end of the day, if you can understand only a moment beforehand that people are likely to buy or sell at a particular point, that is ALL you need to know. It's actually pretty simple, just difficult to do consistently.
Hope it helps.