[rcossey73]

Originally Posted by BlowFish »

AS this is open discussion I'll post these here The high of the day (so far) on the DAX followed by a low (not the low) some hours later. No fancy volume based indicators just a 15second chart with a volume histogram. In isolation dosen't mean much but there are some plain (to me) clues here.

I have often wondered if I should start taking volume into account with my setups.

It is interesting that when I look at your charts I see the exact same thing when I cover up the volume or look at them with the volume. Not sure I could find a way to trade those charts any different taking the volume into account.

I see the following...

Price goes up on low volume
Price goes down on low volume
Price goes up on high volume
Price goes down on high volume
There are big price ranges on low volume
There are small price ranges on low volume
There are big price ranges on high volume
There are small price ranges on high volume
... Am I missing something?

[Tams]

Originally Posted by rcossey73 »

I have often wondered if I should start taking volume into account with my setups.

It is interesting that when I look at your charts I see the exact same thing when I cover up the volume or look at them with the volume. Not sure I could find a way to trade those charts any different taking the volume into account.

I see the following...

Price goes up on low volume
Price goes down on low volume
Price goes up on high volume
Price goes down on high volume
There are big price ranges on low volume
There are small price ranges on low volume
There are big price ranges on high volume
There are small price ranges on high volume
... Am I missing something?

What are the context of those observations?

[BlowFish]

Originally Posted by rcossey73 »

I have often wondered if I should start taking volume into account with my setups.

It is interesting that when I look at your charts I see the exact same thing when I cover up the volume or look at them with the volume. Not sure I could find a way to trade those charts any different taking the volume into account.

I see the following...

Price goes up on low volume
Price goes down on low volume
Price goes up on high volume
Price goes down on high volume
There are big price ranges on low volume
There are small price ranges on low volume
There are big price ranges on high volume
There are small price ranges on high volume
... Am I missing something?

Just look at the volume peaks. "Peaks" are kind of a relative term but look what happens when there is a spike that is about 4 or 5 times the norm. If you simply faded any 15second bar with 400+ volume I am pretty sure you would make decent money. If you only look at this sort of thing where you might anticipate major S/R even better.

[euclid]

Originally Posted by Spydertrader »

"Height of Volume Bars" represents only one possible relationship shown on the chart with Respect to the Volume Bars. By first understanding the fractal nature of the market, and then, applying that understanding onto one's chart, the trader can readily see the same sequences repeat - over and over again.

- Spydertrader

Eh? The height of the volumes bars is the volume it is all the information the volume bar gives.

I understand that you are trying to show fractal waveforms in the volume data. I'm not convinced you can extract four separate waves from that small amount of data. You seem to be using price as the primary cue as to where the volume waves are. I don't see how you claim volume leads price from this.

Sorry, I'm not convinced about these sequences either. Never mind, whatever works for you.

[davem1979]

I have been studying volume as an indicator of price movement and although I am not trading live, I see many potential patterns of price and volume and market delta possible to create trading setups. These are my observations...

1. High Volume climaxes at support or resistance many times can create price rejection, shown through hammers, or inverted hammers, or narrow range bars. This can be an indication of possibly more strength or weakness coming into the market.

2. When price returns to a previous High Volume area at a prior High or Low, and there is low volume, maybe the delta is becoming less positive, fading these extremes based on the volume/delta information seems like one is using a more complete understanding of the market to make those kinds of trades.

3. When a market makes a new low and the next few bars close above that low, many times you see a candle with low or high volume test the lows again and close near its' highs. A high volume test and a positive delta volume could be used to confirm a further up move. A low volume test could also mean that sellers are not hitting bids, but this is also at times an indication to traders that if lows are tested and nobody is hitting the bid, then buyers don't have to worry so much about pushing through a heavy supply essentially making it easier for them to take prices higher.

4. Delta Divergence (which is outlined on Market Delta website) = Higher Highs or Lower Lows made on a delta which is less than the previous bars. For instance, let's say that price reaches a prior resistance level, and the delta is becoming less and less positive, and turning negative at resistance, meaning more and more people are selling, and less buyers are aggressively lifting the offer, this could be an indication that the market is not interesting in trading above resistance and that the market will return lower.

5. Looking at trading ranges---pretend we're in an uptrend, and the ES dropped in the morning, from 912 to 900 and a now it's a few hours later and there's a 4 point range developing between 904 and 908. Why not look at volume as it is traded near 904 vs. 908, and if we see more volume and positive delta around 904's vs. 908's and that at the 908's the delta is not strongly negative, we could form an opinion that the buyers are supporting the market, but aren't yet ready to take price higher, and buyers can either hold on to longs, or try to enter on a failed selling test of the 904's....

6. if you just look at a volume at price chart, without looking at the volume of each bar, you can get good ideas of where the market is finding value, and where trades make sense to be entered---
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On another note, for those who enjoy learning about volume and market internals, and market psychology, a trader and psychologist named Brett Steenbarger has a blog here TraderFeed

And correct me if I am wrong, but he uses volume, volume at price, VWAP, as well as the market internals such as NYSE TICK, to form not only an opinion of what the market is attempting to do, but to create his trade setups.
------------

To me, undertanding volume and how price is being affected by it seems like one of the best tools for gaining an edge and understanding why the market is doing what it's doing.

Best,
David

[jajuanm2]

VSA works! However, if someone has a hammer in their toolbox it does not mean they understand how to use it to build a house. The person probably can drive a couple of nails and yet not understand how to build a house. It takes a little time to learn how to use volume , but once you get the art down you will be on your way to something special. I use to be afraid that too many people would find out how to use it and that it would stop working for me. In summer months, setting minimum volume levels for different time frames helps to keep you on the side lines until it's time attack. Also you still have to know where the S&R levels are . A lot of times volume is just pushing to a level where the big orders are located. In short, you have to understand market structure and S&R levels to use volume properly. You also can't try to make using volume a mechanical process. There is judgment involved because you have to put things into the context of the market structure. You also have to monitor multiple time frames to understand the structure. Once you do that, just stay out of chat rooms and just let the tape tell you what to do.

[Spydertrader]

Originally Posted by euclid »

Eh? The height of the volumes bars is the volume it is all the information the volume bar gives.

Much more information exists in a Chart Volume Pane than simply the 'height' of a specific Volume Bar. The slope of the changes in Volume changes over time. The Peaks and Troughs of Volume change over time. These represent just two examples of items which exist within the Volume Pane. Other information (such as the sequences mentioned previously) exist there as well.

I simply suggest some might find value in making an attempt to look at Volume from a different point of view.

Originally Posted by euclid »

I understand that you are trying to show fractal waveforms in the volume data. I'm not convinced you can extract four separate waves from that small amount of data. You seem to be using price as the primary cue as to where the volume waves are. I don't see how you claim volume leads price from this.

Volume leads Price because unless and until the sequences of Volume complete, the trend cannot change. The largest (slowest) fractal cannot complete its sequences unless and until the smallest (fastest) fractals complete their sequences. Volume provides the signal indicating when each fractal completes, and as such, provides the signal required to see when one trend has ended and another trend has started.

Originally Posted by euclid »

Sorry, I'm not convinced about these sequences either. Never mind, whatever works for you.

DB brings up a valid point about vocabulary and common definitions. When I use the term 'fractal' I do not refer to 'time frame' (e.g. 5 min, 30 min, daily, etc.). Instead, I use the following definition:

(n) fractal (mathematics) a geometric pattern that is repeated at every scale

When I refer to Volume, I mean any information gleaned from a Chart Volume Pane as it pertains to the various Volume bars and not exclusively the absolute Values of each bar.

Good trading to you all.

- Spydertrader

[thalestrader]

Originally Posted by Spydertrader »

Volume leads Price because unless and until the sequences of Volume complete, the trend cannot change. The largest (slowest) fractal cannot complete its sequences unless and until the smallest (fastest) fractals complete their sequences. Volume provides the signal indicating when each fractal completes, and as such, provides the signal required to see when one trend has ended and another trend has started.



DB brings up a valid point about vocabulary and common definitions. When I use the term 'fractal' I do not refer to 'time frame' (e.g. 5 min, 30 min, daily, etc.). Instead, I use the following definition:

(n) fractal (mathematics) a geometric pattern that is repeated at every scale

When I refer to Volume, I mean any information gleaned from a Chart Volume Pane as it pertains to the various Volume bars and not exclusively the absolute Values of each bar.

Good trading to you all.

- Spydertrader

The definition of fractal is not what is the issue here. Rather, it is your assertion about the existence of "sequences of volume" that must "complete."

You wil need to provide a much more detailed account of what you are asserting for that assertion to have the character of proof, rather than character of a mysterious scroll that only the initiated may translate.

Best Wishes,

Thales