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Principles of market movements

  • #421
  • Jul 22, 2009 9:41am Jul 22, 2009 9:41am
http://savepic.ru/755010m.png

http://savepic.ru/759106m.png

Scales on the left are in a narrow price range; 33 032 lots are accumulated at 870 level. Buying from this level at 13.20.

http://savepic.ru/748866m.png

We will consider coincidence for short time periods in more details in the intraday section (intraday trading)

Second rule: the longer the time period within which a volume was formed, the more significant price level at which the volume was formed. That is why the levels formed by a contract volume are more important than weekly levels, weekly levels are more important than the daily ones.
Thus, levels rating by volume indicators and time of a volume formation as such:
1.A level by a contract volume (maximally possible of S&P volumes and covering the whole trade period starting from appearance of first lot in it)
2. A level by the volume for a day (current and previous)
3. A level by the maximal volume for a day (current and previous)
4. A level by the maximal volume for an hour (half an hour, 15 minutes, 5 minutes etc)
And here we can give approximate volume indicators significant for level formation in each time period. (You may broaden for yourself this list of coincidence of a volume formation time and its numerical value):

Volume for an hour
Volume for a day
Volume for a week
Contract volume
Approximate indicators of maximal volumes

10 000/20 000 lots



30 000/40 000 lots

100 000 – 200 000
From 150 000 to
500 000 lots.

Logically following from the second rule
Third rule: in any time period the largest value (in terms of a deal’s reliability) usually belongs to its second half. If to consider a month, then the intersection with the central (or the second week) serves as supporting factor for a deal. The most reliable deals intra week are those concluded from the volumes of Tuesday, Wednesday, i.e., in the second half of a time period (when a weekly volume being an additional support and confirmation of previous weekly volumes has already formed; see an example below) as well as intra hour: the first half an hour for volume formation, the second half an hour for selling out from formed levels of maximal volumes.
Let us consider an example of trade strategy for the intraweek time period: 13.10.08- 17.10.08
The key levels of last week: 1020, 1005, 1000. Levels for the period of Monday-Tuesday: 1055, 1018,5
skype: aleksey_trader
  • #422
  • Jul 23, 2009 5:44am Jul 23, 2009 5:44am
Intraday levels were formed on Wednesday:
972,5 and 970 positioned by the market as support levels.


http://savepic.ru/753005m.png


http://savepic.ru/739693m.png


http://savepic.ru/740717m.png


It is already seen that 1020 (the last week level) worked off as resistance. And therefore, it is more reliable deal on 15.10.08: sale from 1007 and at breaking 972,5.



http://savepic.ru/743789m.png


Thus, in the middle of a week we have another degree of protection of a deal’s reliability as historical levels are confirmed by levels of the current week.
This principle is applicable to other time parameters.

skype: aleksey_trader
  • #423
  • Jul 23, 2009 5:59am Jul 23, 2009 5:59am
http://savepic.ru/781676m.png

The situation looked like as such in chart Combo: Wednesday (pink chart) – movement from the minimum of Tuesday (blue) level 979,7 to achieve as minimum the “bottom” of Monday – 927,5.






Let us consider one more example of trade strategy from a level of maximal volume in the middle of a week.
Thus, within Monday, Tuesday (November 3-4) it was formed the levels: 1002,5, 1000, 999 totaling about 200 000 lots (the same levels were significant on October 13-14). Maximal intraday volume of Wednesday on 5 November was formed at the price of 987 (37 872 lot), 973 (32 540 lot) and 951,75 (32 342 lot).



http://savepic.ru/772460m.png


http://savepic.ru/770412m.png


You may observe by nature of trades that the first part of week was inert, accumulating, without trend. See the chart below.
On November 5 which was Wednesday the market efficiently responded to levels 1002,5 and 999 as resistance levels. It was formed the daily level as 987 and its breach was a strict signal to sale.
November 6, Thursday. Selling out from the Thursdays’ significant level (952) + levels 945-945 which are historically significant levels. (Levels of the previous month) – illustration of different time level coincidence as well
skype: aleksey_trader
  • #424
  • Jul 23, 2009 6:10am Jul 23, 2009 6:10am
http://savepic.ru/765292m.png

http://savepic.ru/762220m.png

A rally for 4 figures is efficiently fixed by maximal daily volumes (see counter):
Level 903/902 – volume of 51 778 lot. It is senseless to trade on Friday after activity of Wednesday and Thursday.

http://savepic.ru/768364m.png
skype: aleksey_trader
  • #425
  • Jul 23, 2009 6:30am Jul 23, 2009 6:30am
Trade scheme of a delaing in thesecond half an hour.


http://savepic.ru/739692m.png



This scheme reflects the priority of second half an hour (sometimes last 15 minutes) to conclude a deal. The main point of mechanism remains the same as for longer time periods. The first half of a period is for a volume formation, the second half is to analyze the market response to a volume level and to make a decision in accordance with this response. (Should a level be positioned as resistance, then sell, should as support, then buy. In detail: in section “VOLUME-DIRECTION”)


SCHEMES OF INTRADAY TRADE SEE IN SECTION «STRATEGIES FOR DAILY TRADE» (INTRADAY).
And the last item of what we treat as the subject of «volume-time» relation
Fourth rule: пthe rule of remoteness by time in respect of a current moment, i.e.: for example, at equal values of several weekly volumes the level formed within the nearest week is more significant than a weekly one formed by the week before. This is connected with the psychological aspect of trades. As we deal with a response of traders to the market movement and the positions which they either have already occupied or missed to occupy, then it is quite understandable that the closer an event and response to it by time the more significant the event itself is.
o VOLUME–DIRECTION (work with volume indicators relating to the market movement: trend-direction, turn, breaking, trend formation, intra-trend operation)



In the initial course on a system of trade strategy development on the basis of volume data we touched some rules of treatment and use of volume data concerning the main points of market movement. We particularly touched the rule of correspondence/difference of trend direction and increase/decrease in volume values, now we will consider this rule in detail with using an example of trade sessions development on the basis of S&P500 (e-mini S&P) and will see other regularities when work with volumes relating to the market movement. SO:
First rule: WE REALIZE UNDER A RESPONSE OF THE MARKET TO A MAXIMUM VOLUME LEVEL THAT A DIRECTION OF THE MARKET MOVEMENT is one of main rules assisting to be rightly oriented along the market movement direction.
This means that if a maximal volume level is positioned as resistance and when approaching it, “rebound” down occurs, it means sales are prevailed in the market (see the schemes below). And the larger a significant level (see level rating by formation time) which is positioned as resistance, the longer and stronger movement from is.


http://savepic.ru/743788m.png


SCHEME 1


http://savepic.ru/741740m.png


SCHEME 2


The schemes provided reflect another nuance of no small importance. If the rebound approaches the contact or even slightly does not achieve a maximal level до (rating volume), then it would be a signal of «strong» market, the signal of that the movement would continue and the movement nature is characterized as quick and intensive. If the rebound occurs from the zone or even slightly overlaps the maximal volume zone, usually, it is a signal of that the given movement is in the completion phase and turn is soon expected (local one: correction or global one: tendency breaking) or of consolidation and formation of new significant level as minimum.




skype: aleksey_trader
  • #426
  • Jul 23, 2009 6:51am Jul 23, 2009 6:51am
Some examples illustrating the schemes provided above are given below
Levels 1052, 5 and 1053За were formed on Monday-Tuesday ( 6.10.08 and 7.10.08). On Wednesday those levels were broken and confirmed as resistance level from which the sale started.


http://savepic.ru/774511m.png


http://savepic.ru/764271m.png


Monday was a day of volume accumulation and new levels arose in the range of 1020 and 1005.
Those levels were also worked out as resistances and new sale from 1005.



http://savepic.ru/769391m.png


When a deal is concluded, it is necessary to strictly detect the period of a volume formation and wait for confirmation – «rebound» from a maximal volume level, which is an additional confirmative signal.
skype: aleksey_trader
  • #427
  • Jul 23, 2009 6:58am Jul 23, 2009 6:58am
Illustration of scheme 1



http://savepic.ru/767343m.png


Volume formation zone
Maximal volume level

Illustration of scheme 2



http://savepic.ru/757103m.png


Volume formation zone
Maximal volume level

A buying situation is mirror of sales but the main point of the market movement direction remains the same.


http://savepic.ru/758127m.png

SCHEME 3

http://savepic.ru/759151m.png

SCHEME 4
skype: aleksey_trader
  • #428
  • Jul 23, 2009 7:43am Jul 23, 2009 7:43am
Thursday is above largest volumes of current week..

russel

http://savepic.ru/747886m.png

s&p

http://savepic.ru/748910m.png

nasdaq

http://savepic.ru/745838m.png
skype: aleksey_trader
  • #429
  • Jul 23, 2009 1:14pm Jul 23, 2009 1:14pm
Gold market analysis

After gaining movement on Monday Gold market came in back trend, which is usual for such time as next week expires AUG09 futures on gold.
Main levels for Friday are shown on a pisture below. Large moves are not expected tomorrow, only from Monday.

http://savepic.ru/728440m.png
skype: aleksey_trader
  • #430
  • Jul 23, 2009 5:11pm Jul 23, 2009 5:11pm
S&P
s&p showed excellent gain this week.What were the reasons of it?Technically it happened in this way: Maximal volumes of previous week + this week`s volume accumulations didn`t let the market to go lower, and as a result above price 937 there was much more long trades, also there was entry at more longterm trade with expectations of profit at least 30$, which should have been closed today, the 23th of July. About today`s gain- same pronciple of analysis- yesterday there was made large volumes at the prices 951 - 950,50, which were base for moving the market.

http://savepic.ru/723327m.png

http://savepic.ru/724351m.png
skype: aleksey_trader
  • #431
  • Jul 24, 2009 1:23pm Jul 24, 2009 1:23pm
Quoting Alex_S
Hello!Thanks, nice to hear that!
Hello people!After some delay I will continue to post here educational materials about methods of processing of volumes and MP.
First thing that I want to post here is a the book devoted to practical application of the volumes data on s&p 500 emini futures market.
WOW, this sounds like.... Yummy!
so much to read, review.... hope i'll get to understand even a little! lol

Seriously, appreciate your time & effort in posting here.
  • #432
  • Jul 24, 2009 1:33pm Jul 24, 2009 1:33pm
i havent followed most of your post..so, i apologize if this is a "simple" Q:
in your latest post, what is the difference of the volume on the left & the volume below the price? Thanks
  • #433
  • Edited 5:28pm Jul 25, 2009 5:25pm | Edited 5:28pm
Happy to see you back !!

Be sure that some people are following your thread closely and learn a lot from you !

We really missed you when you are not here !

Thanks for your time and effort !
  • #434
  • Jul 26, 2009 12:59pm Jul 26, 2009 12:59pm
Quoting supremeChaos
i havent followed most of your post..so, i apologize if this is a "simple" Q:
in your latest post, what is the difference of the volume on the left & the volume below the price? Thanks
Volume histogram below distributes volume splashes for the chosen period of time. At the left you see total volume of the chosen period of time. For example on the 1 week chart on the left you will see summary volume, and below you will see a scale of everyday volume splashes.
skype: aleksey_trader
  • #435
  • Jul 26, 2009 1:00pm Jul 26, 2009 1:00pm
Quoting Kyuubi
Happy to see you back !!

Be sure that some people are following your thread closely and learn a lot from you !

We really missed you when you are not here !

Thanks for your time and effort !
Thanks!!!On that positive note I will continue...=)
skype: aleksey_trader
  • #436
  • Jul 26, 2009 1:08pm Jul 26, 2009 1:08pm
Gold market analysis

From Monday starts trading last week of August09 gold futures contract. I dont expext volatility. Main levels are indicated below, on Monday I wait reaction to price range 952-953, more possible short to max volumes of contract 938-939. If market on Monday will open above 952-953, may be long possitions from max volumes of Friday.

http://savepic.ru/768206m.png

http://savepic.ru/734412m.png
skype: aleksey_trader
  • #437
  • Jul 26, 2009 1:14pm Jul 26, 2009 1:14pm
Oil analysis.

Next week I wait reaction to these levels:

http://savepic.ru/753870m.png

*improving our russian=)*

If these levels will not be broken down, then the most possible are long positions to 70-71 dollar.
If market will go under these levels, then shorts to 63-64.
Indicated levels- main volume levels of Friday, which will be the base point for market movements on Monday and Tuesday.
skype: aleksey_trader
  • #438
  • Jul 26, 2009 1:27pm Jul 26, 2009 1:27pm
Hey Alex,
Very good analysis across the board.

My Best,
  • #439
  • Jul 26, 2009 11:44pm Jul 26, 2009 11:44pm
Quoting jacson101
Hey Alex,
Very good analysis across the board.

My Best,

thanks.
skype: aleksey_trader
  • #440
  • Jul 26, 2009 11:50pm Jul 26, 2009 11:50pm
Analysis of S&P500 e-mini

Last week has shown growth to 975 dollar.
Growth within 2 weeks tells me that should be a correction on the market.
To catch this corerction, it is necessary to consider levels of closing of last week- a Friday:

http://savepic.ru/747739m.png

The bottom of Friday will serve as a point from which market can start declining move on Monday - Tuesday.
Target after shorts is obvious - 928-926.
skype: aleksey_trader
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