How can Price Volume Analysis help Breakout Plays?

[babymush]

Hi

How would Price and Volume Analysis help traders using Breakout Strategies?

I have heard that

If the price starts closing with higher highs and lower lows with increasing volume, prepare for the breakout.

How else would price and volume analysis reduce the whipsaws in breakout plays (like what you look at when a stock breakouts)?

 

[sulong]

Hi

How would Price and Volume Analysis help traders using Breakout Strategies?

Ideally P/V will tell you what price is breaking out from. Once you determine the "from" part, you then put the odds in your favor by having a specific "from" that you attempt to take advantage of.

 

[babymush]

Hi sulong

Thanks for your reply.

Don't quite understand how volume will help in determining the from? Price perhaps due to a resistance level being seen -

How would volume assist in this "FROM"

 

[sulong]

Hi sulong

Thanks for your reply.

Don't quite understand how volume will help in determining the from? Price perhaps due to a resistance level being seen -

How would volume assist in this "FROM"

BO's from a low V area will be different from a BO from a high V area. The length of the "from" or "area" will have something to do with the successfulness of a BO.

Studying basses and trading ranges will help you recognise the differences.

 

[des44]

Hey BM,

Increased volume (over the stock's "norm") certainly acts as a (major) indicator that the perceived BO might actually be a BREAKOUT.

In response to your "price starts closing with higher highs and lower lows with increasing volume, prepare for the breakout", I have not heard of this before. This will be interesting to look at. Thanks.

d-

 

[babymush]

However, I have heard that TOO much volume would not be good - how does anyone determine TOO MUCH or increased volume Intraday (when I am about to buy) - as I am trading EOD

 

[ardhill]

Thought you might like to know, if you didn't already, that DBPhoenix has started a new 'Forum' on T2W on Price and Volume.

http://www.trade2win.com/boards/forumdisplay.php?f=107

 

[babymush]

oh ye I know about it - Only after I started this thread lolz

 

[TheBramble]

However, I have heard that TOO much volume would not be good - how does anyone determine TOO MUCH or increased volume Intraday (when I am about to buy) - as I am trading EOD

Too much volume is anything which keeps the big players away.

Contrary to perceived wisdom, the retail players CAN make a difference to professional involvement.

When joe public (and retailers) get in to a stock it can and does impact the long-term aspirations of the main players.

As for a metric for this Babymush - there isn't one, other than to 'read' the 'typical' volumetric patterns over a long (long....) period and get a 'feel'.

 

[TheBramble]

Thought you might like to know, if you didn't already, that DBPhoenix has started a new 'Forum' on T2W on Price and Volume.

He has indeed. And I must have another look sometime.

But it's much nicer (and somewhat more in the true spirit of t2w IMVHO) to post in a thread where you only have bona fide mods (and t2w team members acting as mods) applying acceptable use policy (abuse, personal attack etc.) than to have your efforts subject to a second layer of somewhat strictly enforced 'thread purity' without any redress.

I say this only in that I have had some very deep thoughts over subjective and causative volume (thanks Socrates) this last day or so and plan to post on an edit-free thread on this very topic quite shortly.

I'm actually considering putting in a reference to an indicator or two so the mods don't move it there (P&V) and have me subject to the mercy of dbp's rabid anti-ind policy. He has the floor in his own forum.

This isn't a poke at dbp BTW - just a statement of what I feel comfortable in expending effort in doing for t2w and any members who may be interested.

 

[Splitlink]

Too much volume is anything which keeps the big players away.

Contrary to perceived wisdom, the retail players CAN make a difference to professional involvement.

When joe public (and retailers) get in to a stock it can and does impact the long-term aspirations of the main players.

As for a metric for this Babymush - there isn't one, other than to 'read' the 'typical' volumetric patterns over a long (long....) period and get a 'feel'.

I have always been confounded by volume. Someone, on one of the recent boards, has been expounding his ideas about high volume plus a big move up being a good way to pick money from the floor. That does not convince me.

Yesterday I decide to short JMAT, having decided that it was overbought, opening at 996p. I see today that it was a very heavy trading day for that share- 3.07 million and I bought near the high. I did not know that at the time and I only read his post this morning, so I am interested to see how this goes. At present, I am B/E, but I admit that the guy has me nervous and will,probably,
close it out by 1330, when I go to work- we all know what work is don't we? That thing we do to live on!

Split

 

[TheBramble]

I don't trade UK stocks, but looking at the chart there seems to be some support at 990 which it tested twice yesterday and currently looks like it might test again sometime today.

It failed to make it's 52-wk high (set in late November) yesterday so weakness is indicated.

If it drops below 990 next potential support is a little hazy, but possibly 980 followed by 950.

 

[Splitlink]

I don't trade UK stocks, but looking at the chart there seems to be some support at 990 which it tested twice yesterday and currently looks like it might test again sometime today.

It failed to make it's 52-wk high (set in late November) yesterday so weakness is indicated.

If it drops below 990 next potential support is a little hazy, but possibly 980 followed by 950.

Sorry! I said I bought near the high. Should have been I sold near the high! I am short at 996p
since yesterday afternoon. Sorry about that. It is hanging around 994p at present and I was hoping to see it lower by now. But yesterday was an interesting example of a big move on high volume. If I had read that other thread (can't find it now) beforehand, I would not have shorted it!

Split

 

[TheBramble]

I realised what you meant anyway, and my comments were made on that basis. If it breaks down through 990 first stop may well be 980 followedd by 950.

But if you're unhappy with your trade, and realise you shouldn't have been in it - get out - don't wait!

 

[Splitlink]

I realised what you meant anyway, and my comments were made on that basis. If it breaks down through 990 first stop may well be 980 followedd by 950.

But if you're unhappy with your trade, and realise you shouldn't have been in it - get out - don't wait!

I decided to close before I went to work at 992.5, partly because I had had a good day with another share and did not want to lose my profits. I closed ahead by 2.5 points. JMAT eventually closed at 993 (a perfect jodi, if anyone is interested in those).

To get back to volume. As I mentioned before, JMAT closed up 31points with volume 3.07 million, which was the highest since the end of July . This shows that EOD volume, at least, does not mean that the next day is going to be good, but it is said that London shares EOD is the only figure that can be relied upon. Does anyone have any opinion on this? I do not take volume into consideration because I have given up trying to understand it, but my opinion that JMAT was overbought clashed directly with that high volume figure although, in the event, I only made a couple of points out of it.

Split

 

[Splitlink]

Can anyone tell me how to transfer a Sharescope chart over to here, please?

Split

 

[zambuck]

Click on chart you want to post and then choose EXPORT chart...and choose windows and choose *.WMF setting.....The chart will be exported as WMF format for you to post anywhere....

If you have paint then you can convert it to *.JPEG format if you need....

 

[Splitlink]

Click on chart you want to post and then choose EXPORT chart...and choose windows and choose *.WMF setting.....The chart will be exported as WMF format for you to post anywhere....

If you have paint then you can convert it to *.JPEG format if you need....

Thanks, zambuck, but am not getting any success out of this. This chart has gone over to a file called Export in Windows and when I press it from there Excel comes up and says that it does not understand the format. At least, when my son did it, he got some coded stuff but I am getting nothing!

This is worse than picking stocks!

Split

 

[barjon]

Can anyone tell me how to transfer a Sharescope chart over to here, please?

Split

Click edit then copy graph to clipboard , then open paint click edit and paste then save as a gif file. Then upload to your post via the manage attachments route.

A bit cumbersome, but that's what I do anyway. There's probably easier ways

jon

 

[zambuck]

Thanks, zambuck, but am not getting any success out of this. This chart has gone over to a file called Export in Windows and when I press it from there Excel comes up and says that it does not understand the format. At least, when my son did it, he got some coded stuff but I am getting nothing!

This is worse than picking stocks!

Split

...I am surprised....on drop down menu click FILE and then select EXPORT GRAPH....it is as simple as that....that will save chart as a *.WMF format file....
Only make sure that chart you want to EXPORT is open and that you click on that chart before doing EXPORT....

If you get a choice of directory where that chart should be saved, then select MY DOCUMENTS as a default....or remember where the chart is being saved....

HTH