Volume tells all

VSATrader · Nov 14, 2004

I wonder how many of you use Mathmatical formulas and then give up as they never seem to work? Have you ever thought of studying volume as a leading indicator?

In the good days when the markets were easier to read, did the tape worms turn their head from the ticker tape to perform some calculation based on maths? I have never heard of it, so why do you?

Have you ever wondered why? when you click a buy or sell order that you create volume, yet you never watch volume?

Volume is the key to activity, the balance of supply and demand, intrest and no intrest.

I shake my head in wonderment.

aarie5 · Nov 14, 2004

sounds like somthing i read a while ago called "don't tell the professionals" am i right?

Roberto · Nov 14, 2004

And what about all the people who trade Forex for a living?How do you suggest that they proceed?

trendie · Nov 14, 2004

Excellent and thought-provoking post, VSAtrader.
The analysis on the attached image is incisive.

Would you be able to provide real-time "as it happens" analysis for a test-period ?
i.e, identify moments of over-supply / under-supply etc, and thus identify ideal conditions to buy or sell, with stop-losses etc ?

Personally, I have never been able to get my head around supply and demand !!
I have always thought of it as people deciding whether something was cheap or expensive !
( lower volume represents the price has is regarded as too high for people to continue buying, so they stop bidding, so the price drifts down until people think it is fair value.
When the price spikes down, people rush in as they think they are getting a bargain, so the volume increases.
If I misunderstand volume, thats probably why I have blown 2 accounts so far

)

aarie5 · Nov 14, 2004

I always thought forex charts had no volume so what's this vol on live charts?

VSATrader · Nov 14, 2004

Yes it is easy with hindsight, but I can read the live edge, and have 65 people to prove it. I gave a commentry on a seminar and it was almost as if the market(SP500 emini) was waiting for my que, I have many years experence which is not easy to come by, just hard work marking charts every day for months and years.

Sometimes you can find me on the tradeguider seminars on a wednesday, I do not work for TG, nor am I paid by them, but I do help out from time to time as I have had the software since 1996, originally VSA by Tom Williams a syndicate trader in Beverly Hills, so I am not trying to sell you anything. I am trying to bring your attention to a little overlooked indicator which no one ever seems to take notice of.

Jesse Livermore once said the ticker tape was a crystal ball for those who could read it.

sounds like somthing i read a while ago called "don't tell the professionals" am i right? sorry, but I never heard of this.

Kind regards

dbphoenix · Nov 14, 2004

trendie said:
Personally, I have never been able to get my head around supply and demand !!
I have always thought of it as people deciding whether something was cheap or expensive !

If I misunderstand volume, thats probably why I have blown 2 accounts so far )

You may be interested in the following thread:

http://www.trade2win.com/boards/showthread.php?t=11104

The issue is not so much literal demand and supply but buying pressure vs selling pressure, particularly if your idea of supply is that it is some sort of inventory. It's the imbalances in these pressures that move price, not volume per se. This also solves the Forex issue.

aarie5 · Nov 14, 2004

why no open tick on your charts?

Trader333 · Nov 14, 2004

I agree with Trendie, this is good material VSATrader and I look forward to more of your posts.

Paul

aarie5 · Nov 14, 2004

http://www.livecharts.co.uk/

aarie5 · Nov 14, 2004

what are your thoughts on volitility breakouts?

Roberto · Nov 14, 2004

dbphoenix said:
The issue is not so much literal demand and supply but buying pressure vs selling pressure, particularly if your idea of supply is that it is some sort of inventory. It's the imbalances in these pressures that move price, not volume per se. This also solves the Forex issue.

I fully understand your first point, and find "buying pressure" and "selling pressure" a far more meaningful and useful way of looking at it, DB (always have done since reading your own posts here, Elder's books and the posts of another party no longer posting here), but how does this "solve the Forex issue"? How would you trade Forex without volume, then? Or would you keep away from it because of the lack of volume?

dbphoenix · Nov 15, 2004

Roberto said:
I fully understand your first point, and find "buying pressure" and "selling pressure" a far more meaningful and useful way of looking at it, DB (always have done since reading your own posts here, Elder's books and the posts of another party no longer posting here), but how does this "solve the Forex issue"? How would you trade Forex without volume, then? Or would you keep away from it because of the lack of volume?

I've never traded Forex, but I assume that you can plot at least 1m bar intervals, if not ticks, i.e., that the daily bar is not just presented, fully formed upon completion. Correct?

Roberto · Nov 15, 2004

Yes, you can plot 1-minute bar intervals with no problem at all. You can get ticks, too, but nobody ever knows if they're totally reliable. I must say that 1-minute's the highest frequency I've ever tried to trade from.

dbphoenix · Nov 15, 2004

Roberto said:
Yes, you can plot 1-minute bar intervals with no problem at all. You can get ticks, too, but nobody ever knows if they're totally reliable. I must say that 1-minute's the highest frequency I've ever tried to trade from.

In that case, you can sense the balance between buying pressure and selling pressure just by watching them form. Volume bars really aren't necessary unless you're an EOD trader going by daily and weekly bars.

Roberto · Nov 15, 2004

Ok, I thought perhaps you meant something like that. Thanks as always for your input, DB.

LevII · Nov 15, 2004

VSATrader

Interesting posts here and on other threads.

Are you connected to Tradeguider or just use their software?

Does TG materially assist your analysis? If so any tips on how best to use it?

LII

jlo_bidlo · Aug 25, 2005

Master the Markets

Hi,

wonder if anyone can help. Very interested in VSA tradeguider however before I part with all my cash for the RT version I would really like to read all of Toms book, Master the Markets. I have downloaded a sample however its only 30 pages. Would anyone one who has it be prepared to sell me a pdf of it, know its cheeky but must be cheaper than me buying $2k of software to get the book as a freebie

many thanks in advance guys,
Jlo [email protected]

mr_cassandra · Sep 7, 2005

Jesse Livermore ended up broke & suicide

His stellar achievements didn't end well.

osho67 · Sep 7, 2005

Hi VSATrader

Can this analysis be done for YM intraday ? I see charts like this, but no one posts something similar for an index intraday. I would be interested to know how useful it is to view intraday volume, I just can't understand it at all, or is it better to observe prices only ?

Thanks

Volume tells all

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