[matinthehat]

I don't understand how volume can really be used on an intra-day basis. It seems like a lot find signals based on volume, but I'd venture to guess they could find the same signals based on nothing but price?

Here is a hypothetical example: Price is making continuous higher highs and higher lows. The up-trend started quick producing a steep trend line, but over time the trend line got less and less steep until price just stopped and went sideways. The bears are not taking price down or they are unable to. The bulls are resting or they are done. Or the bulls and bears are fighting for power. Now check volume. If volume is low at the top then bulls are either resting (unlikely based on previous price action) or they are worn out. But the bears are equally not present and this is beacuse they are waiting for higher prices, or because they are unsure, or because there just are not enough bear traders (new shorts and previous bulls selling their longs and turning into bears). If volume is high, then the bulls and the bears are fighting for dominance. The bears will most likely win based on the length of the up-trend, but the bulls could still win out if they attract a strong following of new bulls. If the bears win out then when price action starts to drift downwards the bulls who entered in at the top would be compelled to sell and possibly become new bears, adding to the supply. Either way, if the up-trend was a lengthy one, then there is a good chance that the bulls will be unable to proceed as the majority of the bulls who wanted to express their opions have already done so.

Seeing as how volume and price occur simultaneously, volume is reflecting what "has happened already," I don't get it?

Volume and price are reflecting what has happened already. No matter what you see on your charts, it is all past action.

It seems like a good trader that has traded price for years could apply MACD to their trading and it would still be profitable in a similar fashion that some may successfully apply volume?

To me anyways, trying to guess,based on previous action, where price is most likely to go is just plain fun. I would rather develop my own opinion on the market than have some formula based indicator tell me what is happening. I would rather potentially profit (or lose) from my own analysis than have some indicator "guarantee" me profit (or loss). But, I am here because I am having fun. If I was not having fun, I would not be here.

[matinthehat]

Originally Posted by euclid »

Both price and volume are indications of transactions. Transactions change both volume and price simultaneously. Volume does not "create price" or "lead price". Combining price and volume data simply gives more information about order flow than price data alone. Maybe not more information, since everything is revealed in the price eventually, but more timely information.

I agree with you that volume does not lead price, but volume does create price. Volume is the effort and price is the result.

[brownsfan019]

Originally Posted by Spydertrader »

Clearly, a relationship exists between both Price and Volume. Those who disagree simply have yet to see that which exists right in front of their nose. By understanding how all markets exhibit a fractal nature, one can take the first steps required to see the Price / Volume Relationship in action - irrespective of market and / or time frame used to trade.

For example, using the ES 5 minute chart, and only making decisions and taking action at the close of a 5 minute bar, the market provides crystal clear information as to where Price sits with respect to the Volume Sequences which require completion. By 'containing' Price within these Volume Sequences, the market reveals its trends across three seperate fractals each day - every day.

Volume leads Price.

Always.

- Spydertrader

Interesting spyder. How about some charts to illustrate the idea being presented here?

[thalestrader]

Originally Posted by Spydertrader »

Volume leads Price.

Always.

That is an assertion.

Prove it.

Thales

[thalestrader]

Originally Posted by matinthehat »

I agree with you that volume does not lead price, but volume does create price. Volume is the effort and price is the result.

People create price through agreement.

Price is the amount of goods or money given in exchange for something else.

Price can rise on falling volume.

Price can rise on rising volume.

Price can hold steady on falling volume.

Price can hold steady on rising volume.

Price can fall on falling volume.

Price can fall on rising volume.

The question for the speculator is simply "is price rising, falling, or holding steady?"

Best Wishes,

Thales

[tape reader]

Humphrey Neil, the author of Tape Reading and Market Tactics, said price represents the value of volume.

[Spydertrader]

Originally Posted by brownsfan019 »

Interesting spyder. How about some charts to illustrate the idea being presented here?

Sure thing. Let's start by taking a look at today's (6-22) S & P 500 E-Mini (The ES) using a five minute chart. Thinking fractally, we want to locate the Volume Sequences which the market displays all day, every day in every market. By describing these Volume Sequences using Volume Color (Black for Up and Red for Down), a trader should expect to see R 2 R 2 B 2 R (for a down trend) and B 2 B 2 R 2 B for an Up Trend. Again, thinking fractally, the market should provide these sequences on each and every trading fractal.

An example of a very fast fractal:



An example of a slightly less fast fractal:



An example of a slow fractal:



An example of the slowest fractal:




As you can see, irrespective of the chosen fractal, the market provides the same exact sequences. Combine these fractals, and a trader can 'see' that which must complete.

Learning to thoroughly and properly 'contain' Price and Volume in order to more easily see these sequences represents the first step toward profitability.

HTH.

- Spydertrader

[euclid]

Originally Posted by Spydertrader »

As you can see, irrespective of the chosen fractal, the market provides the same exact sequences. Combine these fractals, and a trader can 'see' that which must complete.

Learning to thoroughly and properly 'contain' Price and Volume in order to more easily see these sequences represents the first step toward profitability.

HTH.

- Spydertrader

I can't see any relationship between your lines/labels and the height of the volume bars.