Dear Moderators and dear friend Karthik,
This is not an attempt to mirror or hijack the VSA thread in advanced trading strategies. This is just a thread wherein members desirous of posting comments or contributing to the main thread may post if they don't have sufficent posting privileges for the main thread. If this is not found to be a good idea then the moderators may please remove this thread.
by Karthik
By my experience, I sometimes find it more useful to take the period of the moving average as the period of the cycle of accumulation (a week, only, prior to markup), markup and distibution (a week, only, after distribution) of the pertinent market. This is speeded up by applying 1/3 of the above mentioned period. This probably will give an accurate snapshot estimate of volumes for all phases including congestion. As the usefulness of the information derived by any moving average is directly dependent on the correct adjustment of the period, this will work best if moving averages are used. Disregard this if you are using any other method eg ROC, Fisher transform etc.
I use the values as thus - volume greater than 2.2 times the value of the moving average is classified as excessive. The ideal initial markup should have volumes in the range of 0.7 to max 1.8 at least for two bars/candles. This would indicate that the market is moving up with less supply and the markup would last longer. Volume in excess of these values generally indicates presence of supply from some source and the markup may stall prematurely. In this case one has to assess carefully how much is the marking up syndicate willing to absorb (capacity to absorb will be very less in a bearish scenario. Vice versa in a bullish one
.
Tip-Those who keep an eye on open interest will find it beneficial to use open interest analysis akin to volume analysis. I dare say the open interest will give you forewarning of the impending markup
P.S - Just thought I would kickstart this with my 2 cents. No offense to the original thread intended. You will probably only see me posting if I have something worthwhile to contribute. If not, then silence is always golden.
This is not an attempt to mirror or hijack the VSA thread in advanced trading strategies. This is just a thread wherein members desirous of posting comments or contributing to the main thread may post if they don't have sufficent posting privileges for the main thread. If this is not found to be a good idea then the moderators may please remove this thread.
by Karthik
By my experience, I sometimes find it more useful to take the period of the moving average as the period of the cycle of accumulation (a week, only, prior to markup), markup and distibution (a week, only, after distribution) of the pertinent market. This is speeded up by applying 1/3 of the above mentioned period. This probably will give an accurate snapshot estimate of volumes for all phases including congestion. As the usefulness of the information derived by any moving average is directly dependent on the correct adjustment of the period, this will work best if moving averages are used. Disregard this if you are using any other method eg ROC, Fisher transform etc.
I use the values as thus - volume greater than 2.2 times the value of the moving average is classified as excessive. The ideal initial markup should have volumes in the range of 0.7 to max 1.8 at least for two bars/candles. This would indicate that the market is moving up with less supply and the markup would last longer. Volume in excess of these values generally indicates presence of supply from some source and the markup may stall prematurely. In this case one has to assess carefully how much is the marking up syndicate willing to absorb (capacity to absorb will be very less in a bearish scenario. Vice versa in a bullish one
.Tip-Those who keep an eye on open interest will find it beneficial to use open interest analysis akin to volume analysis. I dare say the open interest will give you forewarning of the impending markup
P.S - Just thought I would kickstart this with my 2 cents. No offense to the original thread intended. You will probably only see me posting if I have something worthwhile to contribute. If not, then silence is always golden
.
