[AgeKay]

Originally Posted by phall »

Hi AK:

Thanks for the feedback; it's nice to hear other points of view...

Please don't take this negatively; but if you could elaborate a little on what you specifically think we're missing in the VS approach that would be alot more helpful than generalized observations.

phall

Thanks for your polite request.

I'll try to explain why I think VSA and other approaches based on bars/candles and indicators based on these are questionable to say the least. I have not wasted too much time looking into VSA so please correct me if I am wrong but it seems to me you are comparing price bars and volume bars with previous price bars and volume bars.

The general problem with price bars is that it's just a summary of a lot of information with just 5 pieces of information: periodicy, open, high, low, close. The open and close is completely meaningless on all bars but bars that represent an entire trading day. Even the high and low has little meaning since the periodicy is arbitrary. Due to this bars hide important price action information such as repeated tests of local high and lows. I don't think I have to get into why indicators based on these limited meaningless pieces of information could have any value.

Then you have this volume bar that shows you the number of contracts traded during the specified period. That's all the information it gives you - no more no less. It does not show you how many contracts traded at each price, how agressive the traders were at each price and the timing of the trades. And then people compare the volume of one bar with the volume of another. This is ludicrous. There might be 1000 different scenarios of trading and they can all end up with the same number of contracts during that periodicy and the same looking price bar. No meaning can be derived from the volume alone. Watch trades at every price change and you will understand how wrong interpretations based on VSA are. They might still make the right decisions based on luck or having acquired a good feel for the market, but VSA cannot not be attributed to their success.

I just want people to really really think about whether an approach makes even sense (rationally) before following it. Please use your brain.

[Tasuki]

Originally Posted by AgeKay »

completely meaningless....limited meaningless pieces of information ....ludicrous.... No meaning . Please use your brain.

Actually, I am using my brain, and these "meaningless" approaches are making me money. Your theoretical objections notwithstanding, these approaches work, and pretty darn well, too.

Out of curiousity, AgeKay, how do you take money out of the markets? That's not a facetious question, but a serious one. What is your methodology? In an earlier post, I was encouraging an interdisciplinary approach to the markets. So, what has meaning for you?

[pimind]

agekay,

I agree with you on the type of information that a bar gives us. I think what we are trying to do is get as much information from the bar a possible for our own interpretation. By your comments I assume that you only use the tape ie, time and sales. Although some may be able to trade without bars or indicators, others myself included need a graphical representation of what is going on in the market. I'm sure that we would all appreciate any insight that you may have that will add to this thread. Slamming an approach is easy trying to add to it and increase its value by maybe taking it in another direction has value.

As I'm sure you agree no approach including your is flawless, unless you have the holy grail everyone talks about. Trading in 80% mental. The ability to stick to a trading plan and execute it. Any tool or knowledge or ability that allows you to do that is far from meaningless.

I personally use indicators to visually assist me in making decisions, and give me the confidence to execute the trade. I have been trading full time for over a year and manage to make a living at it.

Again if you have any positive contributions that will assist in developing this indicator, "the purpose of this tread" then it would be greatly appreciated, otherwise i'm sure there are other threads that discuss the legitimacy of indicators and bars.

[RichardTodd]

Originally Posted by AgeKay »

The concept of the Volume Splitter is very powerful but all of you are using it wrong since you don't understand what it's really good at.

Oh, I think I know what it's really good at, but I've watched it every day for almost a year now. It takes time to see the nuances. My hair stands up a little when I see people interpret the splitters in ways I think are probably wrong... but I don't see any reason to get bent out of shape about it. They are making inferences from too few cases, plain and simple.

Imagine how much more helpful it would be if you simply posted an example of what you'd consider good analysis. Since you seem very sure of yourself, I'm sure it would be of interest to all. More interest than essentially calling everyone an idiot, at any rate.

[pimind]

kudos richard.

I have just started using the volsplit and am just starting to see its nuances, it has also made me study volume and realize how important it is especially at key points.

[BlowFish]

AgentKay,

there is nothing wrong with 'sampling' price data to help make sense of it. How you choose to sample that data is of course somewhat arbitrary. Firstly the variable you hold constant (time, range, volume) Secondly the sample size you use for that arbitrary constant (e.g. 5min 4points range 1000contracts). Same holds true for point and figure, renko, market profile, volume profile and any other charting method I can think of. (I'd be delighted to find a truly unique way of sampling data if you have one )

At its very simplest sampling allows you to determine trend. If the price now is higher than it was when you sampled it an hour ago (or perhaps the close yesterday) you might say the hourly (or daily) trend is up. How can you determine tend without sampling data?

Agent Kay how do you make any sense of the price data without sampling it somehow? Maybe just by watching the tape stream by (though you will still be constantly sampling and comparing in your head). Or are you saying the only meaningful sample is comparing price now to yesterdays high/low/close (I guess you mean an actual 'session'). Using that argument a weekly sample would make much more sense with 24 hour trading and markets globally correlated.

I guess you are being provocative to get people to think but you have 'over stated the case' imo. Unless you make decisions based on ...I dunno lets say planetary movements for example? You are absolutely going to need to sample price data and when you do that you are going to absolutely need to make arbitrary decisions on how how you sample it and what you hold constant.

[AgeKay]

Originally Posted by pimind »

By your comments I assume that you only use the tape ie, time and sales. Although some may be able to trade without bars or indicators, others myself included need a graphical representation of what is going on in the market. I'm sure that we would all appreciate any insight that you may have that will add to this thread. Slamming an approach is easy trying to add to it and increase its value by maybe taking it in another direction has value.

I do use a graphical representation of trades but one that makes sense to me (which I have not seen anywhere). My intend is not to slam an approach, just to point out its flaws which is not being done enough in my opinion. It seems that anyone can come up with an approach, give it a fancy name and say Jesus used it and no one will question it at all. I know I might sound rude at times, but hope it will make people really think about trading.

Originally Posted by pimind »

Again if you have any positive contributions that will assist in developing this indicator, "the purpose of this tread" then it would be greatly appreciated, otherwise i'm sure there are other threads that discuss the legitimacy of indicators and bars.

Ok, I'll suggest you use it to predict the next inside market before it changes and use it as confirmation to stay in a trade or exit.

Originally Posted by RichardTodd »

Imagine how much more helpful it would be if you simply posted an example of what you'd consider good analysis. Since you seem very sure of yourself, I'm sure it would be of interest to all. More interest than essentially calling everyone an idiot, at any rate.

I don't want to post my charts, sorry.

Originally Posted by Tasuki »

Out of curiousity, AgeKay, how do you take money out of the markets? That's not a facetious question, but a serious one. What is your methodology? In an earlier post, I was encouraging an interdisciplinary approach to the markets. So, what has meaning for you?

I am not going to tell you. I think everyone has to find it for himself. I know, it's a cliche, but it's true. I've posted in other threads what I think makes sense. If you don't think you would have come up with an approach, then I don't think you should use it. Observing the market, would you have transformed a series of individual trades which contain 4 pieces of information (price, time, size, side) into bars, candle sticks, MACD, VSA or other indicators/approaches? If not (which is highly likely) then there must be a reason (yes, we are naturally not stupid, but we like to believe other stupid ideas). No one is going to tell you there method if it makes them shitloads of money which is the reason you don't read about top trader's methods.

Originally Posted by BlowFish »

there is nothing wrong with 'sampling' price data to help make sense of it. How you choose to sample that data is of course somewhat arbitrary. Firstly the variable you hold constant (time, range, volume) Secondly the sample size you use for that arbitrary constant (e.g. 5min 4points range 1000contracts). Same holds true for point and figure, renko, market profile, volume profile and any other charting method I can think of. (I'd be delighted to find a truly unique way of sampling data if you have one )

I do not sample data and none of my indicators use parameters/variables (this is actually one of my criterias, I do not use it if it requires a parameter). Your jaw would drop at how obvious/natural it is and how much easier it makes profitable trading decisions.

Originally Posted by BlowFish »

Agent Kay how do you make any sense of the price data without sampling it somehow? Maybe just by watching the tape stream by (though you will still be constantly sampling and comparing in your head). Or are you saying the only meaningful sample is comparing price now to yesterdays high/low/close (I guess you mean an actual 'session'). Using that argument a weekly sample would make much more sense with 24 hour trading and markets globally correlated.

My price charts do not use bars or candles and my time charts have no resolution or you could say they have infinite resolution. I trade very short term and do not hold positions overnight.

Originally Posted by BlowFish »

I guess you are being provocative to get people to think but you have 'over stated the case' imo. Unless you make decisions based on ...I dunno lets say planetary movements for example? You are absolutely going to need to sample price data and when you do that you are going to absolutely need to make arbitrary decisions on how how you sample it and what you hold constant.

Yes, I try to be provocative because it's a very sad state the trading education and software is in right now. I have wasted more than 2 years reading about traditional trading advice before I started to really think about it and come up with my own approach which took a lot of research, observation and thinking.

This is why I loved UrmaBlume's contributions. They are original and inspirational. He does not spoon-feed you and of course I wished he divulged more information, but there is a reason he does not. He is making a lot of money from it. Why give away your hard work?

And no, I do not see what effect planetory movements could have on the markets.

[BlowFish]

Well you have piqued my interest (again). How about a tiny hard to make out screen shot