[Dogpile]

<<one thing though is don't you think std dev bands on vwap make more sense as far as market volatility than BBs? I've always been fascinated by BBs, I have Bollinger's book right in from of me. >>

the problem with bollinger bands is that they make the assumption that the moving average is the point of 'value' -- which seems kind of flawed.

<<Maybe its just philosphical but it would seem to me the dev bands make more sense when you add volume over just what Bollinger tried to do. >>

I think the difference in volume-weighting the prices versus just using the closing prices is not such a significant difference.

I have grown up on the key concept that 'momentum precedes price' -- such that just as a ball that is thrown up in the air deccelerates before it reverses its flight, a similar tendency occurs in the markets -- a strong directional move will often get a second push in the same direction (which may then be of lesser force). you can measure such with various oscillators. these oscillators are never volume-weighted -- volume is kind of just an adjacent concept. this is how I think of volatility bands -- yes, if the band widens on higher volume that is a more valid move if it doesn't. but a strong momentum push needs to still be respected to some degree. it gets tricky because what if the move is on less than average volume but that volume reading is higher than the immediately preceeding move -- is it valid or invalid then?

Many situations have kind of a 'grey area' aspect to them -- I think you have to just develop a sense for the various factors going on and weigh the ongoing buying and selling 'pressures' and not get caught up too much in all of the technical issues.

Originally Posted by Dogpile »

I have grown up on the key concept that 'momentum precedes price' -- such that just as a ball that is thrown up in the air deccelerates before it reverses its flight, a similar tendency occurs in the markets -- a strong directional move will often get a second push in the same direction (which may then be of lesser force).

So is volume the motive force causing all of this? And is the use of MP a means of price-volume discovery?

[Dogpile]

<<So is volume the motive force causing all of this?>>

not necessarily, IMO... but volume is often important. earlier this year we had these days that just grinded up on low volume and then the market would launch further up and only THEN would the volume come in. volume would come in at bad prices creating a subsequent hard flush the other way ~2 days later. but following volume only left you not believing in the move.


<<And is the use of MP a means of price-volume discovery?>>

MP is good for its concepts. MP concepts are something that helps you with your 'trade location' -- Dalton says "the most important skill you can master to become a successful trader is to distinguish 'price' from 'value'" (pg 100). I don't know if this is the MOST important skill, but its an important one. My results got much better when I began combining my set-ups with concepts of 'value' (trade location). examples of such might be using 'single prints' and buying/selling tails to help pinpoint support/resistance. but momentum is also important. thus something like finding that 'first pullback following strong short-term momentum' combines both concepts -- the first pullback will generally have pretty good location relative to recent 'value' (equilibrium) and you are entering with high reward potential as price has just begun to 'auction' with momentum away from the last equilibrium level -- as it seeks a new level.

[Dogpile]

as I mentioned in the video I did over the weekend... the best coil is when volatility (std dev bands) contract AND you can draw a triangle... this occured today around 11:38am EST... the breakout occurs when price moves enough to get the bands to expand.

volume was weak on the move relative to previous day -- but you had a non-statistical long bias on days the fed is to announce a decision -- market tends to be safe until an hour or two before the fed announcement -- so the lack of volume was less concerning today.

[darthtrader]

ok dog, i soppose pick this up from my PM.
My biggest problem with BBs is they are a std dev measure from a moving average. I'm actually trying to get rid of all thought of ma's from my thinking. I just dont see how they matter. I just think BBs could be done better. Like std dev bands around X atrs. The first "system" i started trading was a linear regression/BB cross that i stumbled on. I can't even tell you what the regression vars were there though.
That was an interesting video with the volume stuff, I would love though as I said though if you could go through some Dalton stuff on a video. I kind of get this stuff, Dalton beyond value pivs make no sense to me.
Have you ever explored Marc Fishers ideas? I have Crabel's ORB book as a pdf, just say the word and i'll find a way to get it to you.