[Kiwi]

Originally Posted by johnjohn1hew »

Price can only rise when demand is greater than supply. And in your case demand is greater than supply as the sellers realize that prices are too cheap and so they withdraw and wait for higher prices. If the buyers share this sense, then price will rise as they try to find sellers. Also, we can only call the demand present at any given moment "true" as we have no way of knowing the targets of the sellers (if they even have targets) until we reach them. Hopefully this makes sense.

Yes, your statement does make sense.

What I was trying to suggest and I think you have expanded on is that the naive interpretation of supply and demand is dangerous. When prices are pulled up to achieve better short fills it looks like demand ... and in a sense it is - at that precise time. The problem is that the long term actors are simply building positions. Some of my best trades (and virtually the only time I hold for long) come when I start to suspect the activity, profit from it in the short term, and then join the main thrust that comes when the maximum number of fools have joined the short term move.

Price can not move with zero volume - because a new last price is not printed until a trade occurs - but at times significant moves are started without a conventional volume signature and interpreting volume is an art best practiced with a view to the next longer term context rather than as a bar by bar science.




note: I am certain that db meant that price can not move without volume in the post above.

[DbPhoenix]

Originally Posted by Kiwi »

note: I am certain that db meant that price can not move without volume in the post above.

Correct. But then it should also be pointed out that volume is continuous, like price, and doesn't move in bars. Perhaps that's why so many people don't understand it and, consequently, say that it's "unimportant" (since, without volume, there is no price, it is hardly unimportant).