Where is the Dow & others heading in 2005?

user said:
Your talking textbook stuff here!

Let me just put your textbook notion into context. Your saying the last three days the Dow has risen and this has been on low volume which according to you is due to stock shortage? So what is the reason for this stock shortage? Stock shortage after majority of the big boys have been dumping from 10900 to 10400?

Its all down to interpretation: Another trader may think that the market tested solid support at 10400. We've moved higher and the low volume is due to traders being hesitant and scared if you like and could be waiting for confirmation of buying.
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This is not textbook stuff. If the majority of the big boys have been dumping who has been buying it ? Prices cannot go up if there is a lot of surplus swilling around. Surpluses have to be absorbed before prices can advance. The fact that "traders are hesitant and scared if you like and could be waiting for confirmation of buying" does not have an iota of an effect on price progression provided the underlying imbalances are there to drive it. Volume does not represent or reveal these underlying imbalances, it just represents the amount of actilvity, and not the cause.

Kind Regards.
 
The big players do not enter because of volume for a very simple reason..............They are the volume.
 
The problem is that there are lots of misconceptions about volume. People are apt to jump to conclusions. This is understandable. But behind volume there are many things which are not
overtly observable.This is a major difficulty. And I accept this. Volume is not the be all and end all
behind price change, it is merely the record of activity or turnover if you like as a consequence of imbalances in supply and demand, and not the other way round.

Kind Regards.
 
roguetrader said:
The big players do not enter because of volume for a very simple reason..............They are the volume.
Click to expand...
Yes, that is correct up to a point. However, they can enter and leave as much as they like, and if there is no response, for what ever reason, the volume becomes meaningless, as is the case where there is a flurry of volumetric activity but prices remain unresponsive proportionate to significant volumetric shifts.

Kind Regards.
 
I look beyond volume. My focus of attention is to suss the intent. I want to see how the price is taken up or down and the rate of ascent or descent and how the move is progressed, whether meaninfully or not. I am interested to see how orders are snapped up or ignored and on which side. I am not interested in taking flyers or gambling. I am not interested in taking sides, I am only interested in one side, the correct side, and if conditions are not right, there is no point in trying to force, because it cannot be done, so all of it has to do with openmindedness and acceptance and being ready to act or not to act in a very calm mental state.

Kind Regards.
 
RUDEBOY said:
Volume revolves around price, no? So price is delayed to volume?
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In any liquid market there is always activity of some sort or another. Volume is the consequence of this activity. The greater the activity the greater the volume. In very busy or volatile situations in which many prices are being struck simultaneously there are going to be difficulties in displaying everything, this is where a complete understanding is crucial, because even if you do not see it you accurately clock what is happening and all the possible reasons why. If there is delay it may be due to the datafeed not keeping up or disparity between what is displayed on the trading platform versus live data from another source. But when you become very experienced you find ways of multitasking through all sorts of difficulties in keeping up accurately what is going on and you develop the ability to respond almost "before immediately", as it is so quick, a flash.

Kind Regards.
 
Correct, P+ T + V. Additionally, intent or rather the manifestation of intent that has not yet become obvious but becomes clearer the closer you get to it, therefore the use of time is also very important, and the ability to recognise, in a flash, what is meant by what you are seeing and responding to it if necessary, in a nonosecond. The acceptance of what it is and not what you might hope or wish it is must be rigidly self imposed as well otherwise we would all be reduced to gambling, which is pointless.

Kind Regards.
 
No, not really. Ideally a blend can work very effectively, as for example holding a portfolio of strong stocks and at the same time trading in and out intraday in challenging instruments that are liquid or super liquid with reliable features of availability and disposal. But the key is to stay away from instuments that are not actively traded however tempting they may seem because there are all sorts of traps ready to catch the unwary, such as size difficulties or silly volatility or widening spreads and suchlike.

Kind Regards.
 
Socs, physics you were bad, philosophy you were good at school? T=pv is not a good equation, there must be more!
 
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