Volume tells all

[dbphoenix]

It is more informative because it informs you i.e. imparts information about the level of trading activity

Or offers the same information in a different way.

Knowing why something happens informs you about cause and effect. Knowing something about cause and effect enables you to take more appropriate action and to be prepared to take more appropriate action. This is why it adds to the coffers.

Knowing why something happens informs you about cause, not effect. And if you wait for the effect, whatever appropriate action you might take will likely be late.

Indeed, many examples are given on this board of people making money, for which many do not approve e.g the Secker thread, but I don't see what relevance that has on athread about trading using price and volume

Largely because there are many ways of trading price and volume, hence this thread.

Fine, there are threads which discuss other methods. If VSA is not for you, fine. I'm not really interested in whether there is an advantage for you. I am merely responding to postings about the interrelationship between price and volume

And I was merely responding to a question asked of me.

Lighten up, Charlton.

 

[Charlton]

The added dimension of volume

Or offers the same information in a different way.

But it still adds an extra element that aids in understanding. The price is still there - it doesn't take away any analysis of price, but it puts it into context. Context is needed, particularly, for those who are position traders.

Knowing why something happens informs you about cause, not effect. And if you wait for the effect, whatever appropriate action you might take will likely be late.

Admittedly discerning a causal relationship between cause and effect in trading is difficult and is what most people on T2W strive to do. Some take the VSA route which attempts to determine the intentions and outcomes of professional traders. Others might use indicators, which might not aim to determine the primary causal relationship, but a secondary one based on comparing what happens to price when certain indicator relationships appear.

If the market is totally random then cause and effect will not exist. I for one do not think this is the case. If one accepts that there is a causal relationship at play in the market then determining the signs of the cause should lead to a prediction (admittedly with a certain level of probability i.e. a confidence level) that the effect will take place within a certain timeframe. As long as one can act appropriately within that causal timeframe, then advantage is gained.

I would certainly dispute your use of the term "likely be late". I do not see any evidence that this will be the case.



Charlton

 

[SOCRATES]

But it still adds an extra element that aids in understanding. The price is still there - it doesn't take away any analysis of price, but it puts it into context. Context is needed, particularly, for those who are position traders.
Admittedly discerning a causal relationship between cause and effect in trading is difficult and is what most people on T2W strive to do. Some take the VSA route which attempts to determine the intentions and outcomes of professional traders. Others might use indicators, which might not aim to determine the primary causal relationship, but a secondary one based on comparing what happens to price when certain indicator relationships appear.

If the market is totally random then cause and effect will not exist. I for one do not think this is the case. If one accepts that there is a causal relationship at play in the market then determining the signs of the cause should lead to a prediction (admittedly with a certain level of probability i.e. a confidence level) that the effect will take place within a certain timeframe. As long as one can act appropriately within that causal timeframe, then advantage is gained.

I would certainly dispute your use of the term "likely be late". I do not see any evidence that this will be the case.



Charlton

May I ?

"A confidence level" is not enough. It has to be underpinned by a high level of proficiency.

and...

"Acting appropriately within the causal timeframe" is not fast enough...It has to be absolutely instantaneous, I respectfully submit both the above concepts to you.

 

[dbphoenix]

But it still adds an extra element that aids in understanding.

It can aid understanding for some people, yes.

If one accepts that there is a causal relationship at play in the market then determining the signs of the cause should lead to a prediction (admittedly with a certain level of probability i.e. a confidence level) that the effect will take place within a certain timeframe. As long as one can act appropriately within that causal timeframe, then advantage is gained.

If one seeks to predict and if one acts appropriately and quickly. And VSA traders may seek to do both. And if they can, great.

But, again, I'm not a VSA trader. I responded to a question ljey asked on the PV board and which I suggested he move here so that the PV board wouldn't be derailed into a VSA arc that VSA traders would likely never find, much less be aware of. I hope all of you do extremely well with VSA.

 

[ljyoung]

There appears to be bits of fur and feathers floating about and so before things settle down again I would like to voice the following bit of pique. It is decidedly irritating when someone posts a note that there's this nifty article about this or that but fails to mention that you have to be a subscriber to such and such a magazine before you can access the article. Possible solutions might be to:

Post an attachment containing the article. (?copyright infringement?)
Provide a precis of the article.
Mention that you have to be a subscriber to access the article.

While it may be apparent to some what the diddle was that the MM's were foisting off on the unsuspecting lumpen, it's always nice to have it explained to the synaptically-challenged (like me) who failed to immediately see the complexity (or the simplicity) of the guile. As mentioned previously by Alan, that task has been admirably performed by Frugi. I thank him for doing that and in a most helpful, straight-forward and pleasant fashion.

ljey

One must not confuse ignorance with stupidity. Ignorance means you don't know. Supidity means you won't acknowledge that you're ignorant. Anon

 

[SOCRATES]

There appears to be bits of fur and feathers floating about and so before things settle down again I would like to voice the following bit of pique. It is decidedly irritating when someone posts a note that there's this nifty article about this or that but fails to mention that you have to be a subscriber to such and such a magazine before you can access the article. Possible solutions might be to:

Post an attachment containing the article. (?copyright infringement?)
Provide a precis of the article.
Mention that you have to be a subscriber to access the article.

While it may be apparent to some what the diddle was that the MM's were foisting off on the unsuspecting lumpen, it's always nice to have it explained to the synaptically-challenged (like me) who failed to immediately see the complexity (or the simplicity) of the guile. As mentioned previously by Alan, that task has been admirably performed by Frugi. I thank him for doing that and in a most helpful, straight-forward and pleasant fashion.

ljey

One must not confuse ignorance with stupidity. Ignorance means you don't know. Supidity means you won't acknowledge that you're ignorant. Anon

Yes, agreed. But there are many what you might call "tactics" of this type that occur on bottoms, also there are relatives of these variants that occur in congestion areas. Then again there are the similarities in reverse of these at or near tops, so it is quite complicated and merits a whole book be written about this subject alone, without including whipsaws and other anomalies. So it is quite big.

 

[fxmarkets]

The Way To Trade

SOCRATES Many of us are interested in cause, because cause, I will have you know, is linked to intent, and sussing the intent is what trading is all about

I think its The only way one should trade...... work towards or be seeking the answer to... doesnt it make sense? Shouldnt we be open to this ?

My friend Hanz likes to ski. uphill mind...... confused well you would be wouldnt you... then what do most "psychologists" do when you query the merits of uphill skiing ? do they show you the path to downhill Skiing? The Way To Ski ?

No......! they help you be o.k. whilst skiing uphill.

 

[ljyoung]

Yes, agreed. But there are many what you might call "tactics" of this type that occur on bottoms, also there are relatives of these variants that occur in congestion areas. Then again there are the similarities in reverse of these at or near tops, so it is quite complicated and merits a whole book be written about this subject alone, without including whipsaws and other anomalies. So it is quite big.

I believe you Brits (and that is said in the most congenial way possible) have a great saying:

Too clever by a half.

This type of finagling hopefully falls into that category of things because for every diddle there is a daddle and then one gets into timing and on and on as you've amplified in your post.. These things being so then, do you think that in spite of this, it is still useful to attempt to extract information from T&S, Level II and/or Open View which you can use in your trading strategy? Or is it more prudent (and possibly profitable) for the vast majority of traders to stick with the Level 1 volume/price information and let the practitioners of these dark arts mutilate themselves in the shorter time frames? There quite possibly is a "Prince of Darkness" but I would hazard a guess that most of the crew doing this sort of thing are in the long run lucky to break even insofar as this particular component of their trading tactical repertoire is concerned. I don't really know - just a guess.

ljey

 

[SOCRATES]

SOCRATES Many of us are interested in cause, because cause, I will have you know, is linked to intent, and sussing the intent is what trading is all about

I think its The only way one should trade...... work towards or be seeking the answer to... doesnt it make sense? Shouldnt we be open to this ?

My friend Hanz likes to ski. uphill mind...... confused well you would be wouldnt you... then what do most "psychologists" do when you query the merits of uphill skiing ? do they show you the path to downhill Skiing? The Way To Ski ?

No......! they help you be o.k. whilst skiing uphill.

Yes, absolutely, otherwise you reduce your efforts to just guesswork.

...Like standing in front of a window pane on a day when it is raining and betting the raindrop you choose is going to fall down the glass and in a certain direction and is going to end up in a certain place and betting money on it.:cheesy:

That is not what trading is about.

Trading is about betting on near certainties, and the ability to have all the odds in your favour in advance, and not about blind betting at all.

 

[SOCRATES]

I believe you Brits (and that is said in the most congenial way possible) have a great saying:

Too clever by a half.

This type of finagling hopefully falls into that category of things because for every diddle there is a daddle and then one gets into timing and on and on as you've amplified in your post.. These things being so then, do you think that in spite of this, it is still useful to attempt to extract information from T&S, Level II and/or Open View which you can use in your trading strategy? Or is it more prudent (and possibly profitable) for the vast majority of traders to stick with the Level 1 volume/price information and let the practitioners of these dark arts mutilate themselves in the shorter time frames? There quite possibly is a "Prince of Darkness" but I would hazard a guess that most of the crew doing this sort of thing are in the long run lucky to break even insofar as this particular component of their trading tactical repertoire is concerned. I don't really know - just a guess.

ljey

Well, it depends. You have to make the most of what you have.

In trading Futures time and sales and level 11 do not come into the argument at all.

But they are very relevant when trading Stocks, which is another ball game altogether.

Anything that opens a window is a bonus if utilised properly.

 

[SIMA]

Not being a subscriber to Traders', I am unable to get a hold of the article you mentioned above. Correct? Am I overlooking something at the site?

ljey

If you click on the website, there is a contact button there, they should be able to help you.
Also enter Erich Florek in the yahoo search,
it is a German magazine, but there is an English Translation,

This particular article "Order Book Scalping in the Futures Market", anyway scalping here is not that associated with floor trader picking up few ticks here and there, these are strategies engineering to outwit not only normal traders but also other professinal ones. Florek classifies them as The Placer, The Pusher, The Scalper.

Hope you manage to find it.

 

[SIMA]

There appears to be bits of fur and feathers floating about and so before things settle down again I would like to voice the following bit of pique. It is decidedly irritating when someone posts a note that there's this nifty article about this or that but fails to mention that you have to be a subscriber to such and such a magazine before you can access the article. Possible solutions might be to:

Post an attachment containing the article. (?copyright infringement?)
Provide a precis of the article.
Mention that you have to be a subscriber to access the article.

While it may be apparent to some what the diddle was that the MM's were foisting off on the unsuspecting lumpen, it's always nice to have it explained to the synaptically-challenged (like me) who failed to immediately see the complexity (or the simplicity) of the guile. As mentioned previously by Alan, that task has been admirably performed by Frugi. I thank him for doing that and in a most helpful, straight-forward and pleasant fashion.

ljey

One must not confuse ignorance with stupidity. Ignorance means you don't know. Supidity means you won't acknowledge that you're ignorant. Anon

LOOKS LIKE I POSTED THE PREVIOUS REPLY TOO EARLY, WAS TRYING TO BE HELPFUL,
CANNOT ATTACH THE FILE BECAUSE OF COPYRIGHT, EXPLAINING THE STUFF IN THERE WOULD REQUIRE 10PAGES, SURELY TO LOCATE THE ARTICLE BY JUST CONTACTING THE RIGHT DEPARTMENT ON THEIR WEBSITE DOES NOT REQUIRE IMMENSE EFFORT TO GAIN INVALUABLE INSIGHT INTO THE WORKINGS OF THE PROFESSIONALS, DOES IT)

 

[blackcab]

In trading Futures time and sales and level 11 do not come into the argument at all. But they are very relevant when trading Stocks

Why do you say that level 2 - DOM - is not relevant to futures trading?

 

[SOCRATES]

Why do you say that level 2 - DOM - is not relevant to futures trading?

Because volume and the correct interpretation of it in relation to price development or not, as the case may be, is sufficient. In the same way that price unfolding tells its story, so does the volume in parallel with it. When you put the two together, and when viewed properly, that is holistically, they give you a complete picture, provided you are familiar with the instrument you are trading and its quirks. No instrument is free of quirks, you just have to observe and clock them.

 

[ljyoung]

LOOKS LIKE I POSTED THE PREVIOUS REPLY TOO EARLY, WAS TRYING TO BE HELPFUL,
CANNOT ATTACH THE FILE BECAUSE OF COPYRIGHT, EXPLAINING THE STUFF IN THERE WOULD REQUIRE 10PAGES, SURELY TO LOCATE THE ARTICLE BY JUST CONTACTING THE RIGHT DEPARTMENT ON THEIR WEBSITE DOES NOT REQUIRE IMMENSE EFFORT TO GAIN INVALUABLE INSIGHT INTO THE WORKINGS OF THE PROFESSIONALS, DOES IT)

Cher SIMA:

If you look at the time stamps (vide infra) for prior posts relevant to this one and annotated with Y = you and M = me, e.g.,

8/23: 11:38 AM Y, 12:03 PM M, 2:48 PM M
8/24: 1:14 AM Y, 1:33 AM Y
where t = PDT = GMT - 8 hr

you will no doubt observe several gaps, the largest two of which are:

The time gap between my initial request for help and the post you referenced in your post quoted above (2 hr and 45min).
The time gap between my initial request for help and your first response to that request this AM (13 hr and 11 min).

I assume when you say ".. LOOKS LIKE I POSTED THE PREVIOUS REPLY TOO EARLY ..." you are referring to the fact that you posted your initial reply this AM, prior to reading my post of 8/23 at 2:48 PM.

I was unaware that "... JUST CONTACTING THE RIGHT DEPARTMENT ON THEIR WEBSITE ..."
was an option and I thank you for that new and useful information [I assume that you have done this sort of thing before, at this website (or more generally even) and were giving me the benefit of your experience. Again, thank you.]

It is easy for you to say that it "...DOES NOT REQUIRE IMMENSE EFFORT ... DOES IT?" but of course you did not know that I was a high quad and to perform that task would have required me to blow a rather large number of breaths into my straw to effect it (I can't yet afford the alpha wave apparatus). This "auto-forced tachypnea" (distinct from hyperventilation of course) as you might well imagine would have quickly produced a state of hypocapnia and eventual loss of consciousness. Not good, and of course "not", as Garth or Wayne might have said.

Given the current flurry of monetisation on this side of the pond($ for RT$SOX, $ for RT Instinet T&S and others) the thought occurred to me that to "...GAIN INVALUABLE INSIGHT INTO THE WORKINGS OF THE PROFESSIONALS ..." might involve a transfer of funds betwixt meself and the folks at Traders' (their site, in my opinion, although very pretty, does have a certain grasping and greedy flavour to it). Fack dat.

However as in the market so in life, nothing ventured, nothing gained and so I will indeed find out what-up and attempt to secure the document "....BY JUST CONTACTING THE RIGHT DEPARTMENT ON THEIR WEBSITE ...".

Ciao,

ljey

PS: It is not immediately clear to me what aspect of copyright law would be violated by making available to interested parties, for non-commercial (read educational) purposes, a bought and paid for document. But then I am not a lawyer and would not want to risk being extradited to Germany and subjected to a crisp interrogation by a chap named Gunther (sorry, no umlaut) who really does not appreciate, nor will he condone, the hubris of the Yankee swine.

PPS: The application of the Hamiltonian operator to the time-dependent wave function does, or so I'm told, generate all eigenvalues of E for a given type of wave function. To appreciate the sheer enormity of this working approximation may require that we loose ourselves from petty constraints of what is real and what is not, in my little corner of the world, and step into the 11D world of string theory and become one with the hum of the universe. The question is how does one do that? I certainly don't know but then I'm not a lawyer ... (vide supra).

 

[jimbo57]

I don't think trading is for you - stick to concentrating on sucking air, and then see if you can turn it into something more productive

 

[ljyoung]

I don't think trading is for you - stick to concentrating on sucking air, and then see if you can turn it into something more productive

Cher Jimbo,

I haven't chatted with you before but thanks for the ad hominem. Actually one blows into the straw, after drawing air through the nostrils and exhaling it through pursed lips. As for the first part of your retort, I don't really know what your notion of a trader is (perhaps one of those guys in Trader (not Traders') magazine), so I really can't comment. As for the concluding part of your statement, again one runs into the problem of how does one define "productive". FWIW my definition of a productive trader would simply be someone who makes money by trading for a living. But perhaps there's more to it.

ljey

 

[jimbo57]

Cher Jimbo,

I haven't chatted with you before but thanks for the ad hominem. Actually one blows into the straw, after drawing air through the nostrils and exhaling it through pursed lips. As for the first part of your retort, I don't really know what your notion of a trader is (perhaps one of those guys in Trader (not Traders') magazine), so I really can't comment. As for the concluding part of your statement, again one runs into the problem of how does one define "productive". FWIW my definition of a productive trader would simply be someone who makes money by trading for a living. But perhaps there's more to it.

ljey

I was not attempting to be technically precise, the expression "sucking air" merely being one banded about on several trading floors and usually applied to someone who sat without productivity.
As for your definition, can't argue with that.

 

[ljyoung]

As outlined in a previous post (see below):

However as in the market so in life, nothing ventured, nothing gained and so I will indeed find out what-up and attempt to secure the document "....BY JUST CONTACTING THE RIGHT DEPARTMENT ON THEIR WEBSITE ...".

I did contact a Traders' magazine rep (Allison Ellis) and, lo, was rewarded this AM with a free copy of the very article which SIMA referenced in his post. So having tucked in to a piping hot plate of corneille frite with a side of merde du chat (fresh of course - it must be fresh), I feel fortified enough to state unequivocally that I was dead wrong about Traders' magazine both with respect to their generosity and more importantly their content. Which is of course an indirect tip o' a fine tweed herringbone (Irish of course) to SIMA for his discerning choice of trader reading material.

ljey

 

[mastersandman]

since this is a volume related thread

A really long time ago I came across a method of integrating price and volume used by late IC correspondent Eustace Storey. Ive never followed it up but would like to ask if anyone else has heard of it?
Stephen