Concept of Volume in intra day trading

G

GDSL

New Member
#1
#1
My query is regarding the The volume of trading.

Example 1: Lets take a share ABC where I am the only trader throughout the day. I bought 1000 share at 10:00 am and sold them at 12:00 pm. which of the following statement is appropriate:

a) 1000 at 10 am and nothing at 12 pm, thus total volume of 1000 for the day
b) 1000 at 10 am and 1000 at 12 pm, thus total volume of 2000 for the day

Example 2: Lets take a share ABC where I am the only trader throughout the day. I sold 1000 share at 10:00 am and bought them at 12:00 pm. which of the following statement is appropriate:

a) 1000 at 10 am and nothing at 12 pm, thus total volume of 1000 for the day
b) 1000 at 10 am and 1000 at 12 pm, thus total volume of 2000 for the day
c) 1000 at 12 pm and nothing at 10 am, thus total volume of 1000 for the day

In brief I want to know how the volume is calculated. Is it based on purchase or based on sale or both.

Thanks.....Suresh
 
G

GDSL

New Member
#2
#2
GDSL said:
My query is regarding the The volume of trading.

Example 1: Lets take a share ABC where I am the only trader throughout the day. I bought 1000 share at 10:00 am and sold them at 12:00 pm. which of the following statement is appropriate:

a) 1000 at 10 am and nothing at 12 pm, thus total volume of 1000 for the day
b) 1000 at 10 am and 1000 at 12 pm, thus total volume of 2000 for the day

Example 2: Lets take a share ABC where I am the only trader throughout the day. I sold 1000 share at 10:00 am and bought them at 12:00 pm. which of the following statement is appropriate:

a) 1000 at 10 am and nothing at 12 pm, thus total volume of 1000 for the day
b) 1000 at 10 am and 1000 at 12 pm, thus total volume of 2000 for the day
c) 1000 at 12 pm and nothing at 10 am, thus total volume of 1000 for the day

In brief I want to know how the volume is calculated. Is it based on purchase or based on sale or both.

Thanks.....Suresh
Click to expand...
 
R

rigel

New Member
#3
#3
Surely when you sell 1000, there has to be a bid on the other side, hence the volume on that particular transaction is 1000.
If you have an electronic platform for trading you can see all the limit orders on the bid and the offer side,
however if you are placing your order via a broker, they still have to match your offer with a bid. The offer or the sell order is not taken up in vacuum.

Similarly when you buy 1000, you are bidding, hence there has to at that moment an offer which will match your bid, hence vol is 1000 again,

So total vol would be 2000.
 
G

GDSL

New Member
#4
#4
Hi....Rigal

Thanks for your reply. So I understand that, the actual volume for the day is just half of what we see for the whole day. Am I right?

Thanks.....Suresh
 
R

rigel

New Member
#5
#5
No,
1. In stocks and shares, when you buy 1000, the offers to that amount ie. 1000 has to be hit, in other words there has to be somebody selling 1000, so the overall volume is 1000, not 2000, and vice versa.

2. In the futures market if you buy 10 contracts, offers matching that are filled, ie. 10, again overall vol is 10 contracts and not 20

Volume is activity ie. effort, movement of price is the result, if you can learn to read this balance between supply and demand which is the fundamental law governing any market in any time frame, anywhere in the world, then you can do away with all the maths based indicators such as RSI, MaCD, Bollinger bands etc. They make the charts look pretty but they are all derivatives of price.

More on Volume here, check out the Wyckoff forum on traders Laboratory website and study the various threads , tons of free invaluable info.
Hope this helps.

http://www.ehow.com/about_4607821_volume-stock-market_.html

http://www.greekshares.com/volume.php

http://www.traderslaboratory.com/fo...n-trading-opportunities-vad-graifer-4658.html

http://www.traderslaboratory.com/forums/f131/
 
G

GDSL

New Member
#6
#6
Hi....
Good morning

I think I did not put my question in right way.

In intraday trading, when I buy 1000 shares at 10:00 am, at this time the volume will be counted as 1000.

If I sell same 1000 shares at 12:00 pm, again there will be a volume of 1000 at this time.

Thus by end of the day the net volume would be 2000, one at 10:00 am and another one at 12:00 pm.

Questions:
Please let me know if my understanding is correct in above statements.

If the net volume for the day is 1000, kindly let me know is it because of 10:00 am or 12:00 pm.

Why wouldn't 2000 be the net volume of the day? At 10: am I was the buyer so i created the volume of 1000. similarly at 12 pm someone else was the buyer whom I sold, so there could also be a volume of 1000 from his perspective at 12 pm. Thus net volume for the day should be 2000.

Can I have your contact number so that I could call and clarify the doubts.

I really appreciate you taking my queries so interestingly.

Thanks.....Suresh
 
Placebo

Placebo

Well-Known Member
#8
#8
rigel said:
Volume is activity ie. effort, movement of price is the result, if you can learn to read this balance between supply and demand which is the fundamental law governing any market in any time frame, anywhere in the world, then you can do away with all the maths based indicators such as RSI, MaCD, Bollinger bands etc. They make the charts look pretty but they are all derivatives of price.
Click to expand...
Rigel

If my memory serves me right then are you the same guy who is an active member and contributor of the Wyckoff forum on TL ?

Sorry for using this thread to communicate but was unable to send a PM

Cheers
 
R

rigel

New Member
#10
#10
GDSL,
YES, if you buy 1000 and later sell 1000, that will end up as 2000 to the total volume for that particular share.
However if you desire to read price chart via price and volume, there is no need to fret over how much is buying vol and how much selling vol, the histogram at the bottom shows total volume, which is trading activity, both retail and professional and you can gain profound understanding of the supply/demand balance in the market if you make an effort to study Wyckoff principles.

PLACEBO,
I can't claim to having made significant contribution but have certainly gained immense amount from contributions from Dbphoenix and Bearbull, both of them have freely provided invaluable information which was never there in the public domain.
But despite all that if you look at that website, vast majority are engaged in twiddling about with maths based indicators.

I have taken trouble to explain on this website in other threads that these derivatives have their use as decision making tools but their limitations have to be understood, they cannot be Buy and Sell signals. This is what is being pedalled by most vendors and system Gurus out there. bUT SOME MODERATOR OR ADMIN GUY IN HIS WISDOM HAVE ERASED THE POSTS. AMAZING.

I will try it again here.
Price "A" is a variable, we now go about slicing and dicing it and arrive at all these indicators, Bollinger bands, RSI, CCI, Stochs, Agrodics and god knows what else.
Lets term one of the value of such an indicator as "X", now "X" also is a variable WHY?
because it is based on A,
We then set about predicting or forecasting Variable "A" using Variable "X" which in turn in dependent on Variable "A",

DWELL ON THIS, THE LOGICAL FALLACY WILL COME TO LIGHT:))))))
 
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