Supply & Demand

[TheBramble]

I have heard before about the psychological impact of colour on volume bars.

Had a similar shift in perspective when I changed my candles from white/red (traditional Japanese colours) to blue/red. Works for me.

 

[TheBramble]

Are there any good books on the whole supply, demand, price volume relationship ?

SG - the pdf that RR posted at the start of this thread is excellent.

Concise and free. I don't know which is more valuable these days.

 

[Trader333]

dbphoenix,

I am reading the Techniques of Tape Reading by Vadym Graifer and Christopher Schumacher which is recommended by yourself. The book concentrates on stock trading and in particular the Nasdaq where they recommend using Level II as part of the tape reading technique.

Based on your previous response to Salty Gibbon you dont believe this is needed. Can I ask why you differ in your view on this ? or is it just a variation of use on the same theme ?


Paul

 

[dbphoenix]

I wouldn't say Vad recommends it, but what he or I think is not all that important. If it is of value to you, use it. For me, it's irrelevant.

 

[dbphoenix]

SG - the pdf that RR posted at the start of this thread is excellent.

Concise and free. I don't know which is more valuable these days.

Altho I do have a wish list posted at Amazon . . . :cheesy:

 

[Mr. Charts]

IMHO level 2 is a powerful additional tool in the armoury.
Not only does it facilitate scalping, but often warns of price movement BEFORE it occurs and therefore before price movement actually appears on a chart.
One requires every useful edge in any market.
When I personally started using it, my profits rose by an additional 25%-30%
Richard

 

[Mr. Charts]

PS Lovely place Phoenix, Arizona. You're lucky to live there - North of you, deserts and high plains, canyons and mountains - and the warm air.

 

[Salty Gibbon]

When we talk about "reading the tape" we are usually thinking in terms of Level II and T&S.

Does tape reading also include the reading of volume and relating it to price bars ?

 

[Salty Gibbon]

By the way Paul I ordered the book too.

 

[dbphoenix]

When we talk about "reading the tape" we are usually thinking in terms of Level II and T&S.

Does tape reading also include the reading of volume and relating it to price bars ?

Depends on who "we" is. There was a lengthy argument about this on ET, and there have been "debates" on the issue here.

But when I refer to tape reading, it has nothing to do with Level II and T&S. It has to do with price and volume. I see no point in rehasing these arguments since anyone who's interested can read the pertinent threads. But since this thread was begun due to my demand/supply file, it's up to me to clarify what is meant by "tape reading" in what I've written, i.e., tape reading as it's been practiced for a century.

 

[Trader333]

I guess this just shows how easy it is to misunderstand what is meant by Tape Reading. As you say any argument on what it should be is pointless and I am more than happy to learn based on the "Price and Volume" definition.


Paul

 

[Salty Gibbon]

Thank you Dbp.

You are giving me inspiration here - the inspiration to dump something that I cannot understand and which is not helping me ( Level II) and the inspiration to focus on price and volume which I am able to analyse, understand and act on more readily.

 

[dbphoenix]

I don't want to fan any flames here, but the ET thread I referred might be more than usually informative since it involves authors and not just the usual message board flamethrowers. This is not to say that there isn't a lot of heat, but there is also some light:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=20101&perpage=40&pagenumber=1

As far as "misunderstanding" goes, it's probably more a matter of the context or the time in which one finds oneself. I see a very distinct difference between T&S and tape reading, but someone who's never known anything but T&S might have insurmountable difficulties seeing that difference, just as those who grew up with "indicators" such as RSI, MACD, stochastics, etc., may have difficulties understanding how one could trade without them.

One of the reasons I recommend Magee's book is the distinction he makes between the map and the territory, the territory being the observable and verifiable reality (i.e., the price and volume data), and the map being our various notations of it. The closer the map is to the territory, the more likely one is to be perceiving the demand/supply reality. The farther away the map is from the territory (even a plain chart is one step removed from the territory since it "manages" the data in some way), the looser the trader's grasp of reality and the more likely he is to disconnect from it (e.g., people who trade indicators without looking at price at all).

Again, I don't want to initiate anything here. Read the thread if you like. Consider the opinions. Think about it. Decide what's best for you.

 

[neil]

great stuff DB - keep it coming

 

[Salty Gibbon]

Agree - this is a great thread as is all your other material Dbp.

 

[Rognvald]

If you have been interested in what this thread has revealed, take a look at this link

http://finance.groups.yahoo.com/group/Wyckoff-SMI/

 

[ilia king]

Great Stuff DB an elite trader who is willing to share all his knowledge. I will read all your material

 

[Mr. Charts]

Re-my earlier comment about level 2.
I've posted my first trade today on the "Trading The US the Naz/Mr. Charts Way" thread.
Without understanding level 2 and being able to read the tape that +51 inside one minute would have been impossible.
Richard

 

[dbphoenix]

Without understanding level 2 and being able to read the tape that +51 inside one minute would have been impossible.
Richard

Or would could simply note that the higher high in price was not accompanied by a higher high in volume.

 

[Mr. Charts]

Or would could simply note that the higher high in price was not accompanied by a higher high in volume.

Errr.......not so since the high on the opening one minute bar was not exceeded in the time frame of the trade as illustrated on the screenshot and so there wasn't a higher high.

Hence, with all due respect, your comment is simply not applicable in this instance and my statement about level 2 and reading the tape on this particular trade is a statement of fact, not opinion.