Price & Volume 6971

Is there anyone out there who successfully has a career trading just on price and volume without indicators?

Thanks for the responses.

-Nic

Great chart

My post was intended for edmccall1 privately, but since i already made this mistake, i wanna thank all of you (BruceM, sandoxe, destiny, Tradezilla, LisaP) for your informative posts in the daily trading forum. Please keep them coming.

DR

The logical trader really has no mention of volume at all. Yes they need markets to be liquid to get in and out of positions but the strategy really doesn't rely on volume at all. I am trying to figure out how to use volume with price action.

-Nic

Originally posted by neeko

The logical trader really has no mention of volume at all. Yes they need markets to be liquid to get in and out of positions but the strategy really doesn't rely on volume at all. I am trying to figure out how to use volume with price action.

-Nic

Will be interested to know when you find the answer.When es came down from 1190 yesterday, there was no volume till it was pretty late and price action was bullish all day long with market internals. I look at value rather than price.

Volume profile/market profile is another excellent data displaying system to get clues into what may or may not happen.

neeko,
I studied volume for years. I mistakenly thought that it had to be the most important measurement of the validity of price movement; I was wrong in terms of that, but there still is value in paying attention to volume.

Realize this though; I studied NYSE volume compared to PA in the SPX (CASH S&P 500). These were daily bars (back to 1954) but the following observations are still worth something even for intraday bars.

Here are two things I still repeat to myself about the studies (I studied volume for years)

the most important things I realized were:

1) It usually takes larger than normal volume to signal a reversal from down to UP. But the same rule does not necessarily apply to tops.

2) markets can trend up or trend down on virtually no volume at all.

I saw that destiny mentioned that even though yesterday had bullish attributes, the decline was on low volume. Technicians used to call a decline on low volume a "buyers' strike." No buyers (relatively speaking) were willing to step in, therefore, no volume, but in an act of price discovery (what price were the buyers willing to commit funds?), price had to decline further and further until volume was unearthed (bigger volume = buyers were enticed by the price and willing to make a stand).

And there you go, right there is common sense explanation as to why most of the time the attempts to turn from down to up usually need to see volume at least higher than most of the recent bars in the Decline.

Another kind of huge volume is called capitulation volume (NOT as useful as just regular old "more than normal" volume, because capitulation volume is rarer and if you fail to move to the long side just because you did not see "CAPTULATION" style volume then you've got brown thumbs while longs are raking it in.

Capitulation volume is when price hits a point where many of the longs have simply had it, It is the "uncle" price point; there can be a free-fall in price as weak-handed bulls finally abandon ship and sell everything at market regardless of price. If there is a huge volume (like 2 times the 10 day average (just an example) that is a capitulation. If price cannot move appreciably below the Low of that bar, then stronger hands have control of the market.

If you want to understand how volume profile is used, read BruceM's comments. the volume I referred to above is simply the volume histogram (vertical bars at bottom of chart) for each of the bars on the chart.

Originally posted by PAUL9

neeko,
I studied volume for years. I mistakenly thought that it had to be the most important measurement of the validity of price movement; I was wrong in terms of that, but there still is value in paying attention to volume.

Realize this though; I studied NYSE volume compared to PA in the SPX (CASH S&P 500). These were daily bars (back to 1954) but the following observations are still worth something even for intraday bars.

Here are two things I still repeat to myself about the studies (I studied volume for years)

the most important things I realized were:

1) It usually takes larger than normal volume to signal a reversal from down to UP. But the same rule does not necessarily apply to tops.

2) markets can trend up or trend down on virtually no volume at all.

I saw that destiny mentioned that even though yesterday had bullish attributes, the decline was on low volume. Technicians used to call a decline on low volume a "buyers' strike." No buyers (relatively speaking) were willing to step in, therefore, no volume, but in an act of price discovery (what price were the buyers willing to commit funds?), price had to decline further and further until volume was unearthed (bigger volume = buyers were enticed by the price and willing to make a stand).

And there you go, right there is common sense explanation as to why most of the time the attempts to turn from down to up usually need to see volume at least higher than most of the recent bars in the Decline.

Another kind of huge volume is called capitulation volume (NOT as useful as just regular old "more than normal" volume, because capitulation volume is rarer and if you fail to move to the long side just because you did not see "CAPTULATION" style volume then you've got brown thumbs while longs are raking it in.

Capitulation volume is when price hits a point where many of the longs have simply had it, It is the "uncle" price point; there can be a free-fall in price as weak-handed bulls finally abandon ship and sell everything at market regardless of price. If there is a huge volume (like 2 times the 10 day average (just an example) that is a capitulation. If price cannot move appreciably below the Low of that bar, then stronger hands have control of the market.

If you want to understand how volume profile is used, read BruceM's comments. the volume I referred to above is simply the volume histogram (vertical bars at bottom of chart) for each of the bars on the chart.

These observations by Paul are worth24 K solid gold. Thanks Paul.

Hi,

Do you not use the value areas as key ref level at all?

neeko, juniorh, et al,

if you want some trading observations on the volume profile, you have to see BruceM's comments in the incorrectly labelled ES Thursday 9-28-11 (the actual date should have been today's date, 9-29-11.

there you go, complete with charts for illustration.

I use price and volume but not the MP method:

Look at the 5min candle 3:55pm et. yesterday ..
This was the biggest volume bar of the day .. BUT
the key is the bar range ... all that was being sold was bought ..

In candle theory after a down move a candle with big volume and
little movement is accumulation .. the higher time frame of the
candle the stronger the signal ... to the upside it would be distribution ...

thanks, redi

makes perfect sense.

Neeko,
I've seen many trade very successfully with many indicators but, I think it can often takes your eyes off more important information on a market read.. The best concepts I've seen work is the mark fisher ACD concept to spot potential trends, and market/volume profile concept for non-trends and even choppy markets.. time is also an important concept in reading price, which many overlook.. Also learn to watch the market form new pivots as it develops in real time to confirm your levels.. Simple volume bars can also tell you a lot about how decisive a move is on a BO or pull back and etc.. Putting it all together in the right context is the hard part..