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Ideal Volume in Channel UP/Down

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In a rising channel you would want to see rising volume as price moved from inside line (right) to outside line (left). You would want to see diminishing volume outside to inside. Put another way rising volume on impulses diminishing on corrections.

 

At the outside line you might expect a volume surge (climax) however that might push price through, or turn it.(Channels frequently double in size). I used to like entering on those as if you are lucky you pretty much nail the trend change to the tick. Nowadays I try to be more sensible :).

 

At the inside you might expect 'no supply' or volume to tail right off. If you get a surge through at that point there is a good chance the trend line (inside line) is breaking. It might signify the start of a trend change or It also might drift through if the 'slope' of the trend is diminishing or as price goes sideways for a bit.

 

The easy answer to your question however is 45,632. I have to say from the nature of your (many) questions you are still looking for simple answers where as you really just need to do the work.

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B = Black Volume

R = Red Volume

 

See Attached.

 

HTH.

 

- Spydertrader

 

Could you please post the whole chart so that I can see how the lines on your volume histogram correspond with your channel? This looks very interesting.

 

Thanks

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here's the basic concept of the Volume/Channel relationship:

 

Thanks. I think I understand the basic concept but I would like to see how the volume example given earlier by "Spydertrader" corresponds with the channels on his price chart. Perhaps he would be kind enough to post it.

 

Zan-shin

Edited by Zan-shin

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Thanks. I think I understand the basic concept but I would like to see how the volume example given earlier by "Spydertrader" corresponds with the channels on his price chart. Perhaps he would be kind enough to post it.

 

Posting my chart for today isn't going to provide you with much help as you'd not understand the annotations. However, I posted the following chart last October. The attached chart has a few more 'explanatory notes' than the chart I use each day.

 

HTH.

 

- Spydertrader

 

 

attachment.php?s=&postid=2135502

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Posting my chart for today isn't going to provide you with much help as you'd not understand the annotations. However, I posted the following chart last October. The attached chart has a few more 'explanatory notes' than the chart I use each day.

 

HTH.

 

- Spydertrader

 

Yeah you're dead right, I don't understand. :confused: What's going on?

Edited by Zan-shin

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Yeah you're dead right, I don't understand. :confused: What's going on?

 

Near the inception of this thread, I responded to your question by providing the 'ideal' Volume 'picture' one needs to 'see' when trading any market. Another post provided the overall template for the Price - Volume Relationship. I then attached a chart, so you could see how one applies this knowledge onto an ES 5 minute chart.

 

I guess that's it for "explanations"..............

 

Having a conversation with a person who does not yet understand the language spoken represents a difficult proposition at best. If you wish to learn the market's language, begin by learning to annotate a chart in order to represent thyree types of trends - short, intermediate and longterm.

 

HTH.

 

- Spydertrader

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True, but not defining the terms and NIYA (not introducing your acronyms) is always going to result in a one sided conversation and is unlikely to impart any knowledge FWIW :) Not meant as a criticism, merely an observation from someone that does understand the phenomena you describe. YMMV of course.

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True, but not defining the terms and NIYA (not introducing your acronyms) is always going to result in a one sided conversation and is unlikely to impart any knowledge FWIW :) Not meant as a criticism, merely an observation from someone that does understand the phenomena you describe. YMMV of course.

 

Fair enough.

 

FTP = Flat Top Pennant

FBP = Flat Bottom Pennant

Sym = Symmetrical Pennant

OB = Outside Bar

Lateral = Left to Right Movement within Bar 1 of the formation

B2B = Black to Black (Change in trend direction from down to up)

R2R = Red to Red (change in trend direction from up to down)

 

Dominant = moving in the same direction of the channel

Non-Dominant = movement contrary to the channel direction

Tape = skinny line (Short Term Trend)

Traverse = Medium Line (Intermediate Trend)

Channel = Thick Line (Long Term Trend)

 

HTH.

 

- Spydertrader

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Spydertrader,

Great. Starting to make some sense of this :) Do the colours of the horizontal lines on the volume histogram tie up in some way with the colours of the channels ? What does the blue P mean?

 

Thanks

 

Zan-shin

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From the Bottom Up, the colored lines in the Volume Pane represent different 'Pace Levels' (ranges) of Volume. VDU, Dry Up, Slow, Medium, Fast, Extraordinary. The 'Blue P' represents Peak Volume.

 

- Spydertrader

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Fair enough.

 

FTP = Flat Top Pennant

FBP = Flat Bottom Pennant

Sym = Symmetrical Pennant

OB = Outside Bar

Lateral = Left to Right Movement within Bar 1 of the formation

B2B = Black to Black (Change in trend direction from down to up)

R2R = Red to Red (change in trend direction from up to down)

 

Dominant = moving in the same direction of the channel

Non-Dominant = movement contrary to the channel direction

Tape = skinny line (Short Term Trend)

Traverse = Medium Line (Intermediate Trend)

Channel = Thick Line (Long Term Trend)

 

HTH.

 

- Spydertrader

 

Thanks. So how do you use this stuff? What are the signals?

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Personally I'd concentrate on the key concepts (which I mentioned before) that is in a rising channel you want to see rising volume on the move from right (trend line) to left (channel line) and diminishing volume from left to right. Once that 'pattern' breaks something is changing and you might anticipate that the channel is about to break.

 

If volume continues to rise at a left hand line you will likely get expansion of the channel/range. If it rises at the trend line you may well have a change in trend. If it diminishes before the left hand line and turns at the least you have a lessening of the trend. There is good synergy between channels and volume.

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