System Improvisation-Thought process!

[newbee]

Hello

How useful is the volume information, and how should it be used? In determining the directional bias, position sizing, possible target, etc or its better to focus on price alone.

So far we have a few point of views

1. Whether volume is a cause or if volume is an effect serves no deuce to a trader trading time frame greater than intraday - Oxy
   
   
2. Volume follows even in Intraday - uasish
   
   
3. Wrong - CV
   
   
4. Volume precede price, so far position trade concern - Oilman
   
   
5. This is not Price Vs Volume but rather Price & Volume - KKS
   

A simpler question and perhaps more useful to us newbies would be

• Can we use the volume information effectively for trading.

1. YES
2. NO

The answer for me at this point of time is NO. I should be spending more time trying to explore if it can be yes.

As with everything else in trading, maybe its more of a personal thing. For those who can answer YES, would be nice if we get pointers as to HOW?

Kuri, you have one hot thread going on here .


Thanks
nb

 

[kuriako]

Thanks for a compilation without complication newbee!!!

What I felt is that every analyst(dnt kill me- traders inclusive) studies PRICE-TIME series.

And those who are more adhered to it thinks that volume is an effect!

If we analyse Volume-Time chart, we may be thinking that Price is the effect!

What I feel is there is interrelationship (complex or simple) between price and volume!

Eg:- Price difference of two points= X * difference in volume( How easy!!!)

May be a plot of price v/s volume may be helpful in the discussion!!!
But the problem is that we wont be able to find a trend!

What I am thinking is that

Volume represents emotion of crowd
And
Price represents emotion(emotional value) of a scrip

And when emotional value of a scrip increases naturally, the crowd emotion would be increasing!
And if the crowd emotion moves down, the emotional value of the price should also decrease!

Rather than taking one following other, it will be good if we think that both happens at same time affecting each other!

Like two explosions or rather two waves "interfering" with each other.

May be some bloated idea like my PVR!!!
Please correct me if I am wrong!

 

[uasish]

There is nothing like right or wrong in absolute terms ,in debate obviously there is a right or wrong.
The proff of the pudding is in eating.At the EoD how much is input in the bank a/c.
Which is a reality starkly evident hence nothing is wrong nor everything is right.
The approach may vary ,hence i am always open to all type of concept if it helps me to improve my bank balance.

 

[uasish]

Wrong.......

My experience in intraday does'nt say so.

 

[uasish]

kalyan,

Your view is in sync. in few points will try to revert back by 12 noon. today.

Asish

 

[kuriako]

kalyan,

Your view is in sync. in few points will try to revert back by 12 noon. today.

Asish

Why not a chat session?

 

[uasish]

kalyan,

Your these points:=

1)"Price Vs Volume but rather Price & Volume"

My experience in Break - Outs is that there is a lul before the thunder.


2)"if we could incorporate Float into the picture how volume affects Float
& how change in float affects change in price"

Fully in sync with you regarding Float.

3)"The 'critical point' you refer to would be one where this tussle between
Demand & Supply volume reaches a peak, a climax (Hence you have
a large volume bar as it is really a summation of Demand + Supply volume)
may take more than one day (for the 'tussle' to produce a decisive outcome,
resulting in 2-3 consecutive moderately high vol bars) and may even happen
over a period (explaining perhaps some of the 'false'/'whipsaw' breakouts)"

My experience in intraday 1min chart is that after Price crosses a threshold
there is sudden burst of volume ,driving it still further (this is 90% cases) but
how far & thus far ,is not known beforehand ,but few points far from the
critical point is 90% times known beforehand if we know that "Critical Point"

4)"But to quantify Demand & Supply volume we need to make a clean segregation
of the two and for doing so what 'fuel' do we have on the daily charts - just a
volume bar depicting the whole day's volume (not even an OHLC) like it's been
added as an afterthought (This depiction, this traditional structure of the chart
itself is enough to inculcate a bias towards price, to condition the psyche of an
unbiased, unprejudiced onlooker)."

Very true ,any dumb knows vol drives price the very term Liquidity is nothing
but vol but here we are trying to match our experience of daytrading daily
day in & day out ,what i find the big cluster of vol bars in PIB 1min happens only
after price crosses some point & then these massive vol bars drives it for either
'false'/'whipsaw' breakouts.

Many exponents of our trading community ,world wide burnt lots of
midnight oil to find the story of volume.There are few very good work done in
"Tradestation" Language,for last 6 months 2 of our friend is studying the
Total Buy & Total Sell available in PIB,Joydeep has been studying & earning on
this particular aspect of Price / Vol in Tradestation.I have also tried for few months
relentlessly in Metastock & now the essence is to find that "Critical Point".

We dont know as per the following chart whether this is a false breakout but we could definetely earn the last bars few points which in high leverage is few Ks.

Asish

 

[uasish]

Why not a chat session?

Not now for few days ,plz excuse me.

 

[kuriako]

Err... Sorry forgot it!!!

Best wishes!

 

[oilman5]

read works of cassidy............trading on volume.
see 2days back a small stock 'agro dutch'
see rumor mill on 20-9'-o7.......ongc play after

.......hope sufficient given to u .....[newbee as diwali gift]