Price, (Volume), Support, Resistance, Demand, Supply . . .

[erierambler]

$indu

See attached chart.

 

[nine]

Sulong, why are you being so unhelpful to haleh. And then you tell haleh to go to another thread just because he uses the word "indicator". What a bigoted response.

Haleh, you can get everything you need from qcharts (or Sierrachart with IB or Ensign or Esignal). If you look at the attached picture you will see both price and volume displayed in formats that are similar to the approach used here.

 

[porgie]

dbphoenix,
Your teaching has turned my trading from same as always and always same muddled pictures with too much lagging distractions, to clear pictures pleasing to the eye and emotions. When I first ran across you on another site, I was skeptical and my ego said I know too much after 4 years of studies to revert to something as simplistic as price and volume plus a few other simple items thrown in......I can now see any chart and see what you mean . At least, basically and well enough to understand what is happening and what is likely to happen. Please stay on message as best you can. Price and volume is not rocket science, is it? Not perfect, just low risk, high probability...Thanks as always......Porgie

 

[porgie]

Pain was the problem for me....The point of pain was price....not @ other points...that's why I formerly watched the other stuff...price/volume studying eased the pain @ the price..I focus on the price/volume/trend which demand/supply creates ... realtime....intraday trading mini dow...price/volume....the scariest part for me WAS when it turns....db's stuff eased the pain....I do wish to convey that buying low and selling high is my preference.@ retracement range...with the trend....which I can see with my eyes as price creates the trend....Price paints the picture...Volume say's " this is bad or good picture"....Only price can paint the realtime picture....

 

[dbphoenix]

What tempers the "scary" part of the turn is research and study. If one understands how to incorporate the new highs/new lows info (depending on whether you're at S or R), the difference between the volume of advancers and decliners, what S and R mean, and the significance of testing S and R, then it becomes about as high probability as one can ask for in this life, though it helps (the research) to look at turning points over a period of years. Which is what those charts I posted are all about.

 

[RUDEBOY]

Large volume overhangs need to be heeded? The downside action recently seen on the Dow was due to a build up of resistive volume seen in Dec 04. Though this is easily said, its hard trying to pin point when the volume will kick in? I suppose you have just got to be wary of any given situation and take it into account, when going into a position, the price action at the time?

 

[porgie]

db,
Please excuse me for overposting. But, I could talk this stuff as I have for 4 years, and the light might be coming on....the intraday YM is all I trade now as ES and NS stops stressed me and my underfunded account. It is better suited for $5 market or at least my emotions are at this time........I have adjusted to 5 minute charts as I can now see the real picture as intraday trends are the same trends seen on all charts just different scaling and so forth..As you said the 5 min does allow for earlier change recognition, most of the time... ..one can trip up on trends within the trends if one doesn't recognize the complete picture....as you once said, "moosh" 3 fives and you have a fifteen...I don't do that anymore but it helps me forget the 15 minute charts as I no longer need them to see reality of price movement/direction...Question please...When clear buy trade is on, for instance, green candle after green and a red candle nicely retraces, but doesn't break the db trendline as I call it, that is the one I've hand drawn @/from demand points, or bottom line easily seen with my eyes, what should volume bar @ time of red candle show in relation to previous volume bars that I should pay attention to? I do not trade until turn is obvious and this is not one of those time usually, but I am trying to understand volume reading that might allow me to not exit the trade too earIy..I have exit strategy and this red bar would usually not cause the exit as I require point target hit or trend line broken to opposite direction plus of course, using candlesticks to the best of my ability, which is in it's infancy.......I understand previous posts regarding S/R, but let's say it is not @ S/R when retracement?/pullback occurs... Thanks and I will not bother you again today ....Happy Holiday

 

[dbphoenix]

You're imposing a great many conditions here, so my answer has to be the most general sort, which is that volume ought to be "lighter" on the retracement than it was on the primary move. Which is close to meaningless without knowing your exact setup and what the results of your testing of it have been.

If nothing else, find three examples of where this "works" and three where it doesn't "work". Then try to figure out why the difference. Post them if you like.

 

[porgie]

db,
5 minute intraday chart for earlier recognition of price direction change, demand/supply "lines" have turned and are agreeing/aligning with price direction, volume giving confirmation , candlesticks doing same..all of above occurring @ or anywhere between S/R ranges. Is this close to correct thinking or am I just stating the obvious point of the thread? Just trying to work toward simplicity..................Thanks as always.....

 

[dbphoenix]

Just for Fun

1. $ makes a LrL and closes at the low, but there's no increase in trading activity. The next day, trading activity increases, $ rebounds and closes near the high (buying pressure exceeds selling pressure). The next day, trading activity increases yet again and $ tries to make a HrH, but falls back below the high of the bar. Trading activity declines dramatically thereafter, but price rises anyway. Why? Selling has exhausted itself.

2. Trading activity increases from the 2nd to the 3rd week in October and $ declines. Selling pressure is increasing. However, when $ tests S, trading activity increases and $ closes at the high. Buying pressure gains the upper hand. Volume then declines, but price rises anyway. Why? Selling has exhausted itself.

3. . . . ?

 

[skinstg]

Here goes, I will start my analysis in the last week of Feb, at the high.

Up to the last week in February, price has been rising nicely with little volume, buying pressure clearly overwhelming selling pressure.
In the last week of February, volume increases, buyers run into sellers and the sellers win out, with $ closing down for the day altho not at the low - $ is clearly running into some form of overhead resistance.
The next bar volume increases again, and sellers are again clearly in control, altho the buyers struggled to hold prices up - after all this increased volume, we will be wondering which side is spent, are sellers done or are buyers done.
The second week in March it seems clear that the buyers are done, sellers are in control with price closing at the low .
The third week in March $ runs into support at 30 (formed in November & December, marked on attachment), sellers are in charge and then buying comes in and price closes well off the lows at support - $ is still slightly down for the day, so selling pressure still in charge, however not as dominant as before.
The last week in March volume is well down, buyers try and push price higher, however it takes very little volume to overwhelm them and price again closes down on the day.
The first week of April sellers come into the market in size, buyers who are underwater may be selling their positions when support is broken, and the result is a nice long down bozo on good volume - thinking possible selling climax here
A note on support levels here, i would say that the zone between slightly below 28 to 26 represents a solid support zone, and this down bar closes right in the middle of it.
The second week of April buyers come back in and try to defend $, however $ is easily beaten back down by sellers, and although $ is up on the day, buying pressure & selling pressure are pretty equal here. Another point, if the previous bar was a selling climax, we would expect to see less volume on this bar (I think??), and buying pressure asserting more control, so although we cant rule it out, the probability of the previous bar being a selling climax is reduced.
The third week of April is another high volume tussle, with niether side gaining advantage.
The fourth week of April, volume drops significantly, $ rises nicely, and it looks to me like sellers are done, & buying pressure is once again dominant.
The first week in May proves this thinking wrong, as selling pressure once again dominates, volume is still high, but not climactic, and we again have a nice bozo down, although not as big as the first bozo - not sure how we could have foreseen this?
Of significance here is we have a lower low, we can draw a tentative supply line in.
The next 2 bars again represent a tussle, buying pressure seems to be coming back in.
Although buying pressure does seem to be coming back in, the downtrend is established until we get a higher low.

Apologies for the length of this, got carried away, DB plse delete/edit if necessary.

rgds

gavin

 

[SOCRATES]

Here goes, I will start my analysis in the last week of Feb, at the high.

Up to the last week in February, price has been rising nicely with little volume, buying pressure clearly overwhelming selling pressure.
In the last week of February, volume increases, buyers run into sellers and the sellers win out, with $ closing down for the day altho not at the low - $ is clearly running into some form of overhead resistance.
The next bar volume increases again, and sellers are again clearly in control, altho the buyers struggled to hold prices up - after all this increased volume, we will be wondering which side is spent, are sellers done or are buyers done.
The second week in March it seems clear that the buyers are done, sellers are in control with price closing at the low .
The third week in March $ runs into support at 30 (formed in November & December, marked on attachment), sellers are in charge and then buying comes in and price closes well off the lows at support - $ is still slightly down for the day, so selling pressure still in charge, however not as dominant as before.
The last week in March volume is well down, buyers try and push price higher, however it takes very little volume to overwhelm them and price again closes down on the day.
The first week of April sellers come into the market in size, buyers who are underwater may be selling their positions when support is broken, and the result is a nice long down bozo on good volume - thinking possible selling climax here
A note on support levels here, i would say that the zone between slightly below 28 to 26 represents a solid support zone, and this down bar closes right in the middle of it.
The second week of April buyers come back in and try to defend $, however $ is easily beaten back down by sellers, and although $ is up on the day, buying pressure & selling pressure are pretty equal here. Another point, if the previous bar was a selling climax, we would expect to see less volume on this bar (I think??), and buying pressure asserting more control, so although we cant rule it out, the probability of the previous bar being a selling climax is reduced.
The third week of April is another high volume tussle, with niether side gaining advantage.
The fourth week of April, volume drops significantly, $ rises nicely, and it looks to me like sellers are done, & buying pressure is once again dominant.
The first week in May proves this thinking wrong, as selling pressure once again dominates, volume is still high, but not climactic, and we again have a nice bozo down, although not as big as the first bozo - not sure how we could have foreseen this?
Of significance here is we have a lower low, we can draw a tentative supply line in.
The next 2 bars again represent a tussle, buying pressure seems to be coming back in.
Although buying pressure does seem to be coming back in, the downtrend is established until we get a higher low.

Apologies for the length of this, got carried away, DB plse delete/edit if necessary.

rgds

gavin

In your chart above you mark seven lows with the letters Tst, can you tell us what it is that you imply by these markings please.

 

[dbphoenix]

The first week in May proves this thinking wrong, as selling pressure once again dominates, volume is still high, but not climactic, and we again have a nice bozo down, although not as big as the first bozo - not sure how we could have foreseen this?

Depends on what you mean by "foresee". Given the length of the rise, it's not unreasonable to expect S levels to be tested more than once. And if there are multiple S levels, as in this case, particularly if they are close together, as in this case, one has to be prepared either for a bounce after that April bozo or a further test, in this case of the much more important S level at 27.

What is important to note here, though, is that although the test in May represents a lower low, the volume on the lower low is less than on the previous low in April. This suggests a certain exhaustion in selling, and represents the same dynamic as the charts I recently posted showing the May 2 buypoint. This does not mean that price will rocket from there; it may only seek equilibrium for a while. If one can detect the signs of this search for equilibrium in real time, he can avoid getting caught in chop.

 

[dbphoenix]

The "macro" chart is, for now, of interest because of the context, and the preparation for the advance. This will be revisited.

As for the area within the box,

1. There is nothing particularly climactic about this, but the angle of ascent is visibly more severe than previous advances. It is perhaps for both these reasons that $ hovers here for more than a month.

2 & 3. Note that within these groupings, the volume is relatively stable while remaining strong. $ is also relatively stable. This suggests a certain "jockeying" for position. A tug-of-war. This is apparently resolved to the downside the second week of April, but buyers rush in the following week to propel $ back toward the previous week's high. This is met by further selling, but the trading activity is consistent.

4. . . . ?

 

[porgie]

chart

db,

I can't address volume yet. Work in progress. HARD WORK........Looking @ chart from an intraday trader's perspective only as that is all I know...charts look similar... I see the previous strong 27 resistance now becoming support..demand/trendline broken to down side, support @ 27 held w/pullback to 29 {supply line}for sell entry point for low risk/high probability. YM entry would need only tight stop as sell entryf @ 29 would be perfect sell high point if normal run occurs....all of this might not be applicable to this discussion but if it were a YM/ES/NQ intraday chart it would give me the above pictures., I would sell @ supply line..in this case 29...selling high...for YM trading when price moves away to positive 10 point range I move to breakeven..........A buy would be triggered only after demand/supply lines turn to upside..waiting on pullback to demand line for buying low .Price/Volume/Candles/demand/supply/S/R all are very important to me now.... .Thank You as always........

 

[skinstg]

[QUOTE=dbphoenix]Depends on what you mean by "foresee".

What I was really trying to say was how could one have given this outcome a reasonably high probability of happening, in order to avoid being caught long - but you have answered my question, thankyou.
I will go back & relook at your earlier posts.

Socrates, the TST markings were in DB's original attachment in #484, I took it to mean price dropped to support levels, found support and carried on up.

 

[dbphoenix]

sell entry point . . . tight stop as sell entry . . . perfect sell high point . . . sell @ supply line . . . selling high . . . move to breakeven . . . A buy would be triggered . . . buying low

What you would do or not do is not particularly important unless you've reached the point where your understanding of the dynamics is thorough. Otherwise, you're just guessing. Focus on understanding it first. You will then find profiting from it to be much easier. If you're rushing to meet some sort of deadline, you will be more likely to extend the learning process, not shorten it.

 

[porgie]

deadline

db,

I am not on a deadline. I tried that once and once was enough. Thanks for the comments. The understanding of the dynamics is the hard part after years of following lagging indicators and creating many losing systems from them....I intend to learn what you suggest....I am not looking for a system...Just answers that obviously most futures traders don't have...I believe you have the profitable answers. Thanks

 

[dbphoenix]

For some reason, most of us feel compelled to do something about whatever it is that we're studying. But gathering data has a purpose in and of itself. Don't concern yourself with how you might profit from whatever it is you're observing. Focus on understanding it. Give objectivity a chance to take root.

 

[SOCRATES]

[QUOTE=dbphoenix]Depends on what you mean by "foresee".

What I was really trying to say was how could one have given this outcome a reasonably high probability of happening, in order to avoid being caught long - but you have answered my question, thankyou.
I will go back & relook at your earlier posts.

Socrates, the TST markings were in DB's original attachment in #484, I took it to mean price dropped to support levels, found support and carried on up.

Ah, OK, I get you.