Practical examples of volume use on intra day US shares
- Thread starter Mr. Charts
- Start date
- Watchers 18
I would have liked to place a stop buy order just above 36, the upper range of the triangle. Failing that I would enter a buy stop above 36.20, the high of the day.
There you go: I've probably just made a fool of myself. Keep your gob shut OpenMind.
There you go: I've probably just made a fool of myself. Keep your gob shut OpenMind.
Don't know what the answer is, but my observations are:
Potentially bullish factors:
- A 1 3/4 hr consolidation ending in a narrow base with v. low vol suggests range expansion may follow, and the base has broken to the upside.
- The opening bar and various other down spikes over the next 1 1/4 hrs appear to show active intent to accumulate and to support price around 35.65-35.70.
- After the open, although vol on the down spikes does pick up a bit it is not particularly high, which may indicate an absence of serious selling pressure ie. the buyers are deliberately holding off in order to accumulate before a mark up.
- The bottom of the consolidation eventually slopes up into a narrow base on reducing vol, which may indicate that selling has progressively dried up. The flat top may also show a deliberate cap by the buyers imposed until they have done their business.
- After the open, the second long green bar has a high range on relatively low vol, which may indicate an absence of serious selling pressure, and that the high vol right at the open was just short term panic. Also that the subsequent pullback and consolidation may be planned accumulation to avoid running the market up too fast.
- There is a pick up in vol within 7 bars of the end, particularly the third from the end, but no real associated price movement. If the vol is correct could this be a renewed attempt by sellers to take price down? If so, no success, buyers step in and the price moves up.
Potentially bearish factors
- The high of the opening range set by the first 2 bars has not yet been convincingly broken, so potential res overhead.
- The final bar is on high vol - higher than when price went there before (the second bar), which may indicate heavier selling now present. It has also tested the opening range boundary and been pushed down off its high - so at least some res has been shown to be present at that level.
In terms of what I would do - I can't say as I dont know the characteristics of whatever I'm looking at, or what the context is. However, I suppose from the lengths of those 2 lists that I'm in the bullish camp - but I'd really like to see the opening range taken out, as others have said above.
So go on - show how it plummets through the floor then :cheesy:
Potentially bullish factors:
- A 1 3/4 hr consolidation ending in a narrow base with v. low vol suggests range expansion may follow, and the base has broken to the upside.
- The opening bar and various other down spikes over the next 1 1/4 hrs appear to show active intent to accumulate and to support price around 35.65-35.70.
- After the open, although vol on the down spikes does pick up a bit it is not particularly high, which may indicate an absence of serious selling pressure ie. the buyers are deliberately holding off in order to accumulate before a mark up.
- The bottom of the consolidation eventually slopes up into a narrow base on reducing vol, which may indicate that selling has progressively dried up. The flat top may also show a deliberate cap by the buyers imposed until they have done their business.
- After the open, the second long green bar has a high range on relatively low vol, which may indicate an absence of serious selling pressure, and that the high vol right at the open was just short term panic. Also that the subsequent pullback and consolidation may be planned accumulation to avoid running the market up too fast.
- There is a pick up in vol within 7 bars of the end, particularly the third from the end, but no real associated price movement. If the vol is correct could this be a renewed attempt by sellers to take price down? If so, no success, buyers step in and the price moves up.
Potentially bearish factors
- The high of the opening range set by the first 2 bars has not yet been convincingly broken, so potential res overhead.
- The final bar is on high vol - higher than when price went there before (the second bar), which may indicate heavier selling now present. It has also tested the opening range boundary and been pushed down off its high - so at least some res has been shown to be present at that level.
In terms of what I would do - I can't say as I dont know the characteristics of whatever I'm looking at, or what the context is. However, I suppose from the lengths of those 2 lists that I'm in the bullish camp - but I'd really like to see the opening range taken out, as others have said above.
So go on - show how it plummets through the floor then :cheesy:
Last edited:
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
Sorry to have been so long continuing this thread, but I've been very busy coaching.
As can be seen by the attached chart, price rose trapping the bulls as it then reversed.
This stock, ENER, was on my radar for the day, but I didn't trade it for the following reasons:
1. It had moved through far too narrow a price range. Movement facilitates profit and there wasn't much.
2. Look at the volume - it was far too low, with often only a few hundred shares traded per minute. Any genuine larger trades going through would probably take out several levels on level 2. Some of those trades might not have been straightforward buys anyway.
3. Look at the high of the day up to that point - 36.19 at 1431 UK time - a likely zone of resistance.
I think many traders make the mistake of looking at volume and assuming it must be significant - well, whatever anybody says, the reality is that sometimes it is, often it is not.
I am talking here about stock prices and volume, not index futures.
Learning when it probably matters and when it doesn't is, in my opinion, priceless.
If you look at the later volume spikes you can see they didn't indicate immediately subsequent direction either.
In my opinion, the "correct" answer was not to touch this stock with a barge pole.
Richard
As can be seen by the attached chart, price rose trapping the bulls as it then reversed.
This stock, ENER, was on my radar for the day, but I didn't trade it for the following reasons:
1. It had moved through far too narrow a price range. Movement facilitates profit and there wasn't much.
2. Look at the volume - it was far too low, with often only a few hundred shares traded per minute. Any genuine larger trades going through would probably take out several levels on level 2. Some of those trades might not have been straightforward buys anyway.
3. Look at the high of the day up to that point - 36.19 at 1431 UK time - a likely zone of resistance.
I think many traders make the mistake of looking at volume and assuming it must be significant - well, whatever anybody says, the reality is that sometimes it is, often it is not.
I am talking here about stock prices and volume, not index futures.
Learning when it probably matters and when it doesn't is, in my opinion, priceless.
If you look at the later volume spikes you can see they didn't indicate immediately subsequent direction either.
In my opinion, the "correct" answer was not to touch this stock with a barge pole.
Richard
Attachments
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
The other thing I meant to say was that if you are reading a volume "story" make sure there is actually a volume story to read, don't impose the concept that volume must tell you something. In other words, is there actually a story to read, or are you just looking to find one.............?
Same with patterns..............are they actually there, or are you expecting that there must be a readable pattern, when often there simply isn't.
Don't impose pre-conceived notions, be open-eyed and see what there is to see, if anything. If not, move on.
Richard
Same with patterns..............are they actually there, or are you expecting that there must be a readable pattern, when often there simply isn't.
Don't impose pre-conceived notions, be open-eyed and see what there is to see, if anything. If not, move on.
Richard
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
Yes, it was (is) an interesting one and the contributions remaining (after the mods wisely removed all the nastiness) are well worth reading, imho.
It's a shame some of the contributors are no longer on t2w.
Richard
It's a shame some of the contributors are no longer on t2w.
Richard
tar
Legendary member
- Messages
- 10,443
- Likes
- 1,314
I am starting to look at shares trading , uk and us , i saw this thread yesterday , it will be good when u have time to share your thoughts and ideas about voulme indicator .
thanks...
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
If you mean TA volume indicators. useless. Looking and thinking work much better, just as I do and several of the other excellent contributors to this thread.
There is no short cut to success in trading; learn, work, experience.
Richard
There is no short cut to success in trading; learn, work, experience.
Richard
From what I recall he trades US shares only. In addition to the above reasons, it's also that in the US there are more companies to select from meaning better quality signals and trading candidates. It means much more competition meaning tighter spreads and trading costs.
However, I think the biggie is the quality of level II data available for Nasdaq stocks. You'll find this is where the likes of Mr C and Naz (of old!) ply their trade. The quality and depth of level II data is really amazing.
If you can take the trouble to learn it, it can give you significant advantages of those who are pure TA based traders.
However, I think the biggie is the quality of level II data available for Nasdaq stocks. You'll find this is where the likes of Mr C and Naz (of old!) ply their trade. The quality and depth of level II data is really amazing.
If you can take the trouble to learn it, it can give you significant advantages of those who are pure TA based traders.
I should think so. Obviously there's a cost but definitely yes. It may be free though with certain account types via certain DMA brokers. Try the usual suspects IB, Tradestation, eSignal, Futuresource, Trading Technologies and others.
Word of warning, there's further education for Level II beyond normal TA disciplines. You'll need this to be able to take advantage of it. I don't currently use it but from looking into it a while ago, I heard it massively improves your win ratio. The Level II scalpers and day traders I knew back then typically spoke of 80%+ winning trades.
:|
Last edited:
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
