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Hey...what about Volume?

  • #241
  • Feb 12, 2018 3:14pm Feb 12, 2018 3:14pm
Quoting forexcentric
{quote} Hi Don, I noticed a couple of times a "volume pattern" which happen sometimes: an absorbtion which happens in two candles not in one candle. An example is in the chartshot you posted - first pivot signaled by you - where the pivot candle is at a very low volume, and the next one has an increased volume. These two candles can give an image of sellers absorbtion - if i make a single candle from these two, the result is kind of pinbar, and the volume is rising toward the end of pinbar. Do you use also patterns of multiple candles like this...
Hello again friend...forgive me but I am having a difficult time finding the candle pattern you referred to but I will tell you this. Yes I do use two candle combinations to signify absorption. The AUD/USD weekly chart gave a recent example:
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It is where climax volume is overwhelmed by even higher opposing climax volume. This example is especially good because it is a "three way signal". Not only did VSA analysis tag it as climax volume, but also, just plain tick volume showed the huge rise in volume (again at a significant level) but as well, volume delta showed buying climax immediately followed by even higher and obviously overwhelming selling climax volume.

Therefore yes, I use those as absorption indications...where the competing climax shows even more tick volume. I hope this is clear.
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  • #242
  • Feb 12, 2018 4:09pm Feb 12, 2018 4:09pm
Took a short on the EU.

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I feel like this may be a bit early to short. I'm in because after the down move on the 7th, the pullbacks from the 8th and the 9th are a bit muted. On the hourly, you can see price was moving down from around my entry, but it also was moving up from the lows of the 8th and the 9th. This is a play to take it past those lows from my current price.

If price gets down to those lows then i'll most likely take an entry there as well.
  • #243
  • Feb 12, 2018 8:54pm Feb 12, 2018 8:54pm
Quoting DonPato
{quote} Looks like you hit the nail on the head with that trade...and might have even held it longer. Looking at this from my charting perspective: {image} (sorry for the bad drawing)...as soon as the range started looking "stable" I would've been hammering the tops and bottoms of this range. Looking at where you entered (last two green candles on this chart) showed the seller's finally stopping out and would've given the opportunity to hold into the break, but assuming you where after a small goal (like I do when I day trade), this worked out well...Congrats....
Checked your chart, added some comments, hope you don't mind
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  • #244
  • Feb 13, 2018 12:11am Feb 13, 2018 12:11am
Hi there,
Hoping not spam the thread
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  • #245
  • Feb 13, 2018 8:04am Feb 13, 2018 8:04am
Quoting LookinGood
Took a short on the EU. {image} I feel like this may be a bit early to short. I'm in because after the down move on the 7th, the pullbacks from the 8th and the 9th are a bit muted. On the hourly, you can see price was moving down from around my entry, but it also was moving up from the lows of the 8th and the 9th. This is a play to take it past those lows from my current price. If price gets down to those lows then i'll most likely take an entry there as well.
Stopped out on the that trade. It was a bit early.
  • #246
  • Feb 13, 2018 8:08am Feb 13, 2018 8:08am
Quoting LookinGood
Took a short on the EU. {image} I feel like this may be a bit early to short. I'm in because after the down move on the 7th, the pullbacks from the 8th and the 9th are a bit muted. On the hourly, you can see price was moving down from around my entry, but it also was moving up from the lows of the 8th and the 9th. This is a play to take it past those lows from my current price. If price gets down to those lows then i'll most likely take an entry there as well.
Stopped out on the that trade. It was a bit early.
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  • #247
  • Feb 13, 2018 9:48am Feb 13, 2018 9:48am
Quoting wiserltz
{quote} Checked your chart, added some comments, hope you don't mind {image}
I don't mind at all, but there is also something I wish to comment on here and I hope all will take this into account when using volume on intraday charts. I have mentioned this several times through out this thread. Since we only have the option of using tick volume on our charts, there are going to be times through out any given day where volume drops off between sessions...ie between the Asian, European, and US sessions. As well as the BIG drop in volume after the US session closes and before the Asian session opens. These times are gap times and it is only natural that volume falls.

Thus when we are evaluating order flow in and around these times, volume may have a tendency to make something look different that it otherwise would. That pin bar may show an increase in volume (meaning absorption) but only because it near the open of a session. As well, the climax volume near the end of a session may just be everyone getting out of positions before the close.

This is the danger in using volumes of any kind but especially tick volumes as, again, we are counting transactions and extrapolating delta. That is why I am advocating using daily or higher candles, because in a single 24 period you have ALL the volume of that day/week/month. There are no gaps, and thus any extrapolation would naturally be more reliable.

OK...I've said my piece.

I will get off my preaching stump now
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  • #248
  • Feb 13, 2018 9:51am Feb 13, 2018 9:51am
Quoting wiserltz
Hi there, Hoping not spam the thread {image}
You are not spamming...I am hoping to keep the conversation going and want to generate intelligent discussion on this subject. It would appear you have found another winner.
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  • #249
  • Edited 10:22am Feb 13, 2018 10:10am | Edited 10:22am
Present EurAud M30, and got this
Edit: I know main reason was Sup/Dem, but volume was also very important for the suddenly drop.
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  • #250
  • Feb 13, 2018 10:31am Feb 13, 2018 10:31am
Quoting Daxfx
{quote} Better use market deepth tehen you better see real market volume
Currently my MT4 can not give that info. Maybe MT5 or Ctrader are much better. I've little knowledge about "market deepth", but got the impression it is too "Quick", only good for tick data scalping, maybe you can give us a example?
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  • #251
  • Feb 13, 2018 11:24am Feb 13, 2018 11:24am
Quoting LookinGood
Stopped out on the that trade. It was a bit early.
EUR/USD appears to be testing the under side of a previous balance area, and it is doing so on falling volume. While the delta shows that buying is dominating, it would appear the buying is insufficient volume to create interest...it is rip for being absorbed...

I have not yet seen the selling exhaust on the daily chart, I could be wrong, but I'm willing to wait to see what the "mid-week reversal" brings, then lower my stop to this week's high.
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  • #252
  • Feb 13, 2018 2:33pm Feb 13, 2018 2:33pm
Quoting wiserltz
{quote} Currently my MT4 can not give that info. Maybe MT5 or Ctrader are much better. I've little knowledge about "market deepth", but got the impression it is too "Quick", only good for tick data scalping, maybe you can give us a example?
Hello...I tried to find DaxFx's quote so I could reference it as well...but just let me add this comment. Market depth is only available in level 2 and higher brokerages and not available to us retail traders. In this aspect we are blind. This refers to where the larger banks and institutions have place liquidity and at what level (price). Assuming that is what DaxFx was referring to, no one at this level has access to that information limited as it may be.

It may also be possible that he/she was referring to a vertical style volume indicator often referred to as "market depth" where volume is registered at price levels and not by each candle. These tend to show what level the majority of the volume came in and what price did in response to these levels. These are useful and I am confident you can find and indicator such as this for metatrader. Just look for "volume profile" in google or even here and you will find an indicador that provides something that looks like this...
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I still have not found a way to use this to my advantage...but am working on it. Yes...yes...yes...I know it shows levels where volume came in...in the past, but I have not yet figured out how that helps me on the right hand edge...this is because I do not place orders "out in space", no matter where the level might be....I now trade when I see the order flow change, and price level is the last (if any) consideration.
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  • #253
  • Feb 13, 2018 2:43pm Feb 13, 2018 2:43pm
Looking to go long on WTI:
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Lets see if you can find the signals now that I've been harping on them "ad nauseum". Hint: Today looks like the absorption signal may complete, but on weak volume...gives me pause. I have placed a pending order at today's low but still waiting on close to add a market order.
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  • #254
  • Edited 3:16pm Feb 13, 2018 3:05pm | Edited 3:16pm
Quoting wiserltz
Present EurAud M30, and got this Edit: I know main reason was Sup/Dem, but volume was also very important for the suddenly drop. {image}
To try and answer your question of "why"...I cannot say exactly but I did see a buying exhaustion signal using what we previously discussed...two climax bars in the opposite direction forming the final absorption. This particular absorption signal was apparent on your better volume indicator. In addition..it looks like this was the run up to the end of the session...and then all the day traders took profit and got out.
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  • #255
  • Feb 13, 2018 7:52pm Feb 13, 2018 7:52pm
Quoting DonPato
{quote} To try and answer your question of "why"...I cannot say exactly but I did see a buying exhaustion signal using what we previously discussed...two climax bars in the opposite direction forming the final absorption. This particular absorption signal was apparent on your better volume indicator. In addition..it looks like this was the run up to the end of the session...and then all the day traders took profit and got out. {image}
Yes! make sense at the point you wrote the post.
Since there wasn't much sell off in the following session, so I guess high possibility price may rally again. Maybe wrong. LOL
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  • #256
  • Feb 13, 2018 7:54pm Feb 13, 2018 7:54pm
Quoting DonPato
{quote} Hello...I tried to find DaxFx's quote so I could reference it as well...but just let me add this comment. Market depth is only available in level 2 and higher brokerages and not available to us retail traders. In this aspect we are blind. This refers to where the larger banks and institutions have place liquidity and at what level (price). Assuming that is what DaxFx was referring to, no one at this level has access to that information limited as it may be. It may also be possible that he/she was referring to a vertical style volume indicator...
Me either, so I don't use any MP indicator
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  • #257
  • Feb 13, 2018 8:02pm Feb 13, 2018 8:02pm
Quoting wiserltz
Present EurAud M30, and got this Edit: I know main reason was Sup/Dem, but volume was also very important for the suddenly drop. {image}
I notice these kind of PA/Volume many many times, trying to find(predicate) it from the very beginning(the top) of these move. From my humble experience, the RR will be good. I think it is related with the FTR(First Time Return) for SD trader.
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  • #258
  • Edited 8:54pm Feb 13, 2018 8:41pm | Edited 8:54pm
Hello DonPato,
I'm mainly a scalper, I use H4 for my bias, M30 for the swing, and try to get several pips, don't want max profit, just find the high possibility level on M30 , so I look the market differently with you and other day trader
EDIT: exit early again, my origin target was neck line..
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  • #259
  • Feb 14, 2018 9:45am Feb 14, 2018 9:45am
Quoting wiserltz
Hello DonPato, I'm mainly a scalper, I use H4 for my bias, M30 for the swing, and try to get several pips, don't want max profit, just find the high possibility level on M30 , so I look the market differently with you and other day trader EDIT: exit early again, my origin target was neck line..
I too am a scalper...just not on the FX market. I prefer the greater transparency and accuracy that the futures market provides. When I place a trade I can actually see it go up on the board at the CBOE. FX requires greater capital for that kind of transparency, and with the murky and sometimes downright dishonest way FX brokers like to do business, I do not feel comfortable trusting so much capital to them.

I just deposit enough to make my trades and save the larger portion of the capital in an interest bearing account, then siphon off the profits into back into the interest account. That way if a black swan happens, all I lose if the initial capital, and not everything.
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  • #260
  • Feb 14, 2018 9:53am Feb 14, 2018 9:53am
Quoting wiserltz
{quote} I notice these kind of PA/Volume many many times, trying to find(predicate) it from the very beginning(the top) of these move. From my humble experience, the RR will be good. I think it is related with the FTR(First Time Return) for SD trader.
It is to be expected that at major levels scalpers and day traders will be either reversing, or taking profit and if there are enough of them it will cause a strong move in the opposite direction...and because they must always have a counter party, that is the very definition of absorption. Those moves (on an intraday time frame) can be used to your advantage. But I have not yet found a way to predict them ahead of time without being able to see an order book or market depth. You are blind to the orders at this level in this market. (yet another reason to scalp futures).

This is why using large candles is better for me. There is no "quick action" necessary and positions can be down sized to produce very little risk if you are wrong. Just my opinion, and yes it requires that you sit on your hands a LOT...but that's OK. I have other things to do with my time.
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