Hey...what about Volume?

First time I've looked at xngusd lol . The BO (15 April) down on low vol is strength down and not weakness which could have been shorted . Yes well spotted there's some strength coming in(23 April) that will probably give us a range to fake around and see where they want to take it but certainly not a reversal signal just yet , more down I think.

I have an observation. I drew a circle around a long skinny, "up-order-flow candle". I am wondering if this, "candle" could reflect the big boys pumping up the price since there is very little if any order flow volume on the top 4/5's of the candle?

You've made a very good observation here, but the conclusion is just a little skewed. The observation is that on these long (in size) candles that everyone calls "strength" you see very little transactions and trading is very "thin". How is that a sign of strength? What I interpret from this candle is this:

1. The larger buying toward the bottom of the candle was the remaining shorts stopping out (or covering) to keep at least some profit. Some may have even covered at a loss.
2. This means no one was left to wanted to sell, yet there were buyers who still needed to either join in long or cover their shorts. The "smarter" players got out early leaving the rest to get dragged backwards to where there was enough selling volume to cover the demand.
3. It is the "stop out" that caused that big candle NOT necessarily big demand for long positions. AND, once price rose again to where it attracted more selling, price stopped, and reversed.

Was that caused by the "big boys"? I really can't say, however the premise is that since the "big boys" are what move the market I suppose that could be true. However what is true is this: Price moves to where the order are...not the other way around.

If price stabs down (or up) to take your stop and then turns and goes your way without you...it is most likely because your was not the only stop at that level...there where most likely 1,000's of stops there and those orders where needed to counter a larger order going the other way.

Take a good look at all those big long "strength" bars on your chart and look underneath them with a tool similar to this one...you will find most of those "strength" bars are simply thin counter party participation. And price will move to find enough orders to balance the market.

Always remember, price is LAGGING not leading...(contrary to popular belief)

In keeping with the theme in the previous post I offer you this view of the order flow...On Gold.
Today's bar would appear to be all buying:

And indeed it is buying dominant for sure. However:

Is it really strength? Or are these shorts that are trying to cover, and perhaps a few brave souls (like me) who are wanting to go long?

We are at the bottom of a 3 year range. on very weak (weekly) volume

It would appear that "thin" trading is the name of the day...

A perfect example of what I was speaking of earlier in today's post. How many shorts where stopped out by this head fake long on USD/JPY? as soon as I saw that price closed above this 7 day range I was tempted to stop and reverse (SAR). However, when I saw that the rise above the range was mostly selling and "thin" selling at that...I decided to hold and perhaps add-in. I didn't get filled on my add-in position but Now that I see price is moving lower I am grateful I didn't SAR.

Of note however, is the move down is also thin selling. It wouldn't take much buying to over come that. So I will hold (at least for now) and watch...however I am encouraged by what this tool was able to assist me with when I would normally now be into my 2nd loss. SAR - from short to long (loss) and now a Loss being dragged backward from the highs.

So this tool has already avoided 2 losses which is even better than a win.

"The observation is that on these long (in size) candles that everyone calls "strength" you see very little transactions and trading is very "thin". How is that a sign of strength?"

I don't consider this "candle" as a sign of strength. From what I have read it could be the big boys are manipulating the price. The price is going up but there is no volume. Therefore, what is causing the price to go up? If this were a legitimate move up it would seem there would be a lot of demand volume, but it is not there. Therefore, I consider this a weak, "candle".

I saw that , and ?

Well I thought the concept of support might apply... for the last 3 years this is the area where more supply comes into the market to support price... this combined with the order flow/volume data I've been observing might result in higher prices.

https://paracurve.com/2018/10/volume...r-useless.html

I posted the above link to an article about FX volume. The author has an account on FF and his, "handle" is BillyRayVal. He claims to have worked for banks on the FX side and seems to be a full time trader. Although I think he is primarily a futures trader now.

Very informative westomarke. I enjoyed reading this article very much. Thank you for posting it.

Some good videos there too. Thanks.

Hello!

Am I guessed phases right?
And I am very interesred what would be entry point in this case? Some pattern or limit order based on somehting?

Regards

Hello LuckyMind and welcome

As I do not know what indicator you are running at the bottom of your chart I felt it best NOT to make any assumptions and refer back to my own "extrapolated Delta". As I have stated in the past on numerous occasions, I hesitate to use these methods on intraday trading because of the waxing and waning of volume during a 24 hr day...that is typical of various markets around the world opening and closing. However I have corrected your phase analysis as follows:

Note here that the climax phase occurred when price closed above a small range that had occurred during the previous 4 candles. It is typical when resistance breaks for price to move dramatically higher on rising volume. This is also indicated by a corresponding "spike" in delta volume (ALL Buying).

The very next candle shows the exhaustion phase. Rising tick volumes - yet price cannot close above the high of the previous candle, and in fact had a bout of selling to over come. In addition, the exhaustion delta volume showed very weak buying.

Finally, the absorption was divided between two candles. It doesn't always occur in a single candle - especially on intraday time frames. Price rises to form a new high yet tick volumes are falling. As well, the delta for this bullish bar shows strong buying...yet on the very next candle, selling takes over on rising tick volume and just about the same strength as the previous bar's buying volume. in other words, the selling cancelled out the buying and closed back below the high. THIS is the absorption and your entry is at the close of this bar.

In addition to this entry (market entry) I would also have placed a limit short near that last high in case buyers decided to retest that high. In this case it would not have been filled.

I hope this helps.

Forex is DECENTRALIZATION market, there is no things about volume. All volume indicator just measure tick volume from your broker, even larger broker like FXCM display volume their trader who trade in their broker.

Check post #530. Thanks

I would greatly appreciate it if you would at least try to read the entire thread...or perhaps a significant part of it before you comment on this particular subject...we have beat this one to death...if you don't want to use volume in your trading you are invited not to. However, as many of us here are finding, volume (yes even tick volume) can help us create a significant edge in our trading.

Please feel free to comment with something useful and helpful. This subject is dead and buried...thanks

Every once in a while you find a real true trader with a mind blowing view of the market and you realize, you have not started, okay you have but but the last alphabet Z is far away!

I am a price action trader, yes, read charts well, yes but this order flow thing and early entry style make me realize one thing that is really important. A move out from balanced order flow condition is finite even if we do not know yet where it will end. So the better your entry with tight Stop the more you can milk that move for higher RRR. That said, this is Money management leverage per say, one trade can get you very far due to high RRR.

I am a strong believer in Money Management and this concept of improved RRR alone is worth this view of market.

Thanks the Don! God bless you!

Don,
I wanted to highlight something I see you didn't spend much time explaining!
The relationship of actual tick volume data(you can say size/height) to delta volume extrapolated equivalent as it is used to IDEALLY WITHOUT MISTAKE identify the three key phases of Climax, Exhaustion and Absorbtion. Climax is so easy to see...exhaustion too...I think the trickiest of them all is the variability of the Absorbtion in its myriad forms.
From you teachings these are notes I have taken or written as I think it;
***
CEA-P; Climax, Exhaustion, Absorbtion and then Push-off!
// The three phases doesn't have to be in any particular order. And it doesn't seem to matter which time frame you watch as it
appears to be valid on all time frames.
Climax;
. High Vol Bar in the dominance direction. Mostly wide spread bar too!
. Deceptive, in that it normally give early signal that dominance is changing
. This is mostly where weak hands jump on the moves, but sadly at the end, strong hand sell to them that is why it's high vol
.
Exhaustion;
. price continues to move in the direction of dominance but on less and less volume. No-Demand and No-Supply are examples.
. Think of it as the move without steam/effort/volume - it cannot be sustained
Absorption;
. This is the churn bar; on normal volume, it's often high volume and middle closing small bar or high-wave due to matching orders.
Notice that the prior descriptions of absorbtion bar is mostly tailed-indecision bar with often middle close!
. This is also indicated by pinbars in form of Upthrusts and Springs.
. Clue; Absorption bar is often the one that is the pivot bar of the swing, at least for a recent congestion!
. Absorbtion Delta Volume is often low do to buying order matching selling order with little left to overflow like two clashing waves
. This is the ideal ENTRY AREA; Enter @ Absorbtion Bar or Retest of it with Limit order!
. rising tick volume with low buying delta...this is typical of absorption (the final phase in most cases)
. the very basis of "absorption"...high tick volume yet price cannot advance...and actually falls back(for running into Resistance) and
vice versa.
Push-Off;
. This where the new dorminance orderflow shows it's hand with clear directional push on high volume.
. Aim to be already in the trade before this happends as entry on the push-off is retail entry resulting in wide stop and less RRR
***
Pls correct me on the above notes where I am wrong!
But now I want to know how to read the delat volume extrapulation more...I see it is useless alone, it has to be cordinated with the tick volume and location and closing price and wicks characteristic...pls shed more light on this!

Sorry to seem to over type;
but I have looked at www.algodeveloper.com for the indicator I have not found it on their site. Please can you give a direct link or instruction on how to get it?