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Soultrader

Intro to Equivolume and Candlevolume

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Most of you are probably familiar with Equivolume and Candlevolume, but for those that live by price and volume this charting method is an extremely useful way of plotting price.

 

Equivolume was developed by Richard W. Arms, Jr. and plots the low and high as a square/rectangle with the width representing volume. "Equivolume displays prices in a manner that emphasizes the relationship between price and volume."

 

attachment.php?attachmentid=2977&stc=1&d=1190204720

 

This is a very useful visual representation of the commitment and fight between buyers vs sellers. A fat equivolume tells us that alot of volume took place. If a fat squishy equivolume takes place at the top of a rally, this indicates that alot of buyers were still interested in pushing prices up but met as many sellers who were willing to dump it all at higher prices. These equivolume bars show a turning point.

 

In my opinion, it is an easier way to see price charts compared to trying to match each bar with each volume histogram. Below shows a few samples of various equivolume shapes.

 

attachment.php?attachmentid=2978&stc=1&d=1190205044

 

Also attached is a free ebook from Richard W. Arms titled, "Trading with Equivolume".

 

Now, exploring this further I would like to introduce candlevolume. This is actually a better way of viewing equivolume as it mixes traditional candlesticks with equivolume, hence you are able to see the open, close, high, and low.

 

Below is a sample of a candlevolume chart. I will be adding a few charts of my own whenever I get a chance as well.

 

attachment.php?attachmentid=2980&stc=1&d=1190205442

 

One of the most useful ways to use candlevolume charts is to identify "test" of the PDL/PDH as well as spotting potential weakening rallies, lower volume pullbacks, trend continuations, strengthening declines, etc...

 

Hopefully traders who already use this charting package can add their inputs here as well.

equivolume1.png.dd7c34d9a5d0f0dd9cbef1ed9879d726.png

equivolume2.png.64a79733370543fbc97b8b9037387510.png

Trading With Equivolume.pdf

candlevolume.png.4c6c5b4850d23ac3aae02aa526a33d6d.png

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Thats actually quite a nifty tool. Never actually seen it on many charting platforms before. Is the actual candle type called Equivolume? Would make it much much easier to spot reversals and sticking points.

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Yes, on my platform is it labeled equivolume or candlevolume. I understand it is not widely used and therefore not readily available on all trading platforms.

 

It makes VSA trading alot easier in my opinion.

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Yes, on my platform is it labeled equivolume or candlevolume. I understand it is not widely used and therefore not readily available on all trading platforms.

 

It makes VSA trading alot easier in my opinion.

 

I assume Tradestation supports equivolume right?

I've used it somewhat in the past for stocks. I can see how your application especially combined with the tick delta indicator gives a great visual interpretation.

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Guest cooter
I assume Tradestation supports equivolume right?

I've used it somewhat in the past for stocks. I can see how your application especially combined with the tick delta indicator gives a great visual interpretation.

 

Don't assume. Ask somebody. Or better use the search function at this forum.

 

The accuracy of the TS constant "volume" charts has been discussed. They are not the same as Arms' Equivolume bars, IMHO.

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Here we have todays candlevolume and equivolume in comparison on the Nikkei futures. Notice the break of the 30min range low was on a wide tall candle bar. This indicates a valid breakdown to the downside with a target at the previous day value high.

 

When price reached the VAH pivot, we saw a fat squishy candle (slightly tall) but wait.... the next bar is a skinny toothpick looking bar. Thus a classic VAH play can be taken.

 

The run up on the bounce of the VAH is followed by skinny bars indicating no demand. This is a warning signal and is followed by a power supply bar downwards to test the VAH once again. Notice the test is now on a skinny bar compared to the last test.

 

The bottom chart shows equivolume. I personally find candlevolume a better way to visually see price action and volume combined.

 

attachment.php?attachmentid=3010&stc=1&d=1190256143

5aa70e0617582_September202007CandlevolumeandEquivolume.thumb.JPG.8c10ead04e26eecbc7f067a8d46c8063.JPG

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Thanks for the differentiation, I can see why you like the first style better.

 

So the skinny bars on the last test show the VAH may hold up since the selling pressure has dried up right?

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Interesting charts James. As you know, I like trading off the candlesticks and these fat/skinny guys look funny to me. :o

 

It would take some getting used to, but I could see the value here, esp if volume is an integral part of your decision making.

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I assume Tradestation supports equivolume right?

I've used it somewhat in the past for stocks. I can see how your application especially combined with the tick delta indicator gives a great visual interpretation.

 

There have been lots of suggestions for this to be built for TS in the forum but have been suggested with tons of other features. Just don't hold your breath. I use another platform that has it (mrswing.com) for stocks.

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Hello to all and great thread Soultrader. Just to let you know, Ensign Software has both equivolume and candlevolume integrated in the software and you can use it either for future, forex, stock or any other trading instrument that you like.

 

At 39.95$ US per month, this charting software is really a great asset. In fact there is a large portion on their website discussing all the possible ways volume can be used.

 

Since I am using them since some time, I really like their sofware. Very good quality for the price you pay monthly.

 

Just wa thinking to share my insight on another software alternative for people interested in going deeper in their studies of equivolume or candlevolume analsyis.

 

BTW, Soultrader, I really see your point when talking about the usefulness of incorporating candlevolume in VSA.

 

Sincerely

 

Shreem:)

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Can a member tell me which platforms support equivolume charts now

 

 

 

Multicharts not yet responded 2 my QUESTION

 

NINJA i was told cannot do it & same for Esignal

 

john

 

 

 

Here we have todays candlevolume and equivolume in comparison on the Nikkei futures. Notice the break of the 30min range low was on a wide tall candle bar. This indicates a valid breakdown to the downside with a target at the previous day value high.

 

When price reached the VAH pivot, we saw a fat squishy candle (slightly tall) but wait.... the next bar is a skinny toothpick looking bar. Thus a classic VAH play can be taken.

 

The run up on the bounce of the VAH is followed by skinny bars indicating no demand. This is a warning signal and is followed by a power supply bar downwards to test the VAH once again. Notice the test is now on a skinny bar compared to the last test.

 

The bottom chart shows equivolume. I personally find candlevolume a better way to visually see price action and volume combined.

 

attachment.php?attachmentid=3010&stc=1&d=1190256143

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Dick Arms (the Equivolume guy) has a new charting method that he calls "Arms Candlevolume."

 

I don't want to spam so I won't post any links, but if you're interested he does have a book out on the technique.

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