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Volume Price Level Trading

  • #261
  • Jan 17, 2013 9:19am Jan 17, 2013 9:19am
Quoting jls
This post exemplifies why I am confused.

(3) We have established avolume peak at (2). Our new price level is 1.3310
OK. Makes sense.


Our new price level is 1.3310.
Yep. So far, so good.

So market interest seems to befar less at this new price level.
[font=Times New Roman][size=3]Huh? Price goes up (bar...

I think i can help spud to answer this if you don't mind. Not sure if i got the right answer, but that's what i can understand from Spud's explanation.
The reason why you see bar 3 as a place where traders are not interested with selling could simply be an observation of the candle alone only. What Spud might be trying to say is when bar 2 rose to a volume peak, it doesn't necessary means buying is only option. It could possibly means that traders are trading aggresively in this period of bar, hence the peak of volume. And there is a price level between the bar which caught the trader's interest, either selling or buying. That's why Spud waited for the next bar close (bar 3), and concluded that there's weakness in the price level, as bar 3 is not moving up, but going down with lower volume. The market could be shifting their interest in some other price level.

This is what i see and understand.
  • #262
  • Jan 17, 2013 9:31am Jan 17, 2013 9:31am
Quoting jacktrader1
I think i can help spud to answer this if you don't mind. Not sure if i got the right answer, but that's what i can understand from Spud's explanation.
The reason why you see bar 3 as a place where traders are not interested with selling could simply be an observation of the candle alone only. What Spud might be trying to say is when bar 2 rose to a volume peak, it doesn't necessary means buying is only option. It could possibly means that traders are trading aggresively in this period of bar, hence the peak of volume. And there is a price level...

hmmmmm, I don't knooooow.
  • #263
  • Jan 17, 2013 9:32am Jan 17, 2013 9:32am
I would be confused as well, low volume on a down bar doesn't mean traders aren't looking to go short?
  • #264
  • Jan 17, 2013 9:40am Jan 17, 2013 9:40am
well if you use vsa analogy to explain, i don't mean to take this out of topic but probably the best explanation is demand is strong on bar 2, with such high volume and rising price level, the next bar is expected to be bullish too. Yet bar 3 appears as a low volume bearish candle, which probably indicates the demand is no longer in the market, that's why bar 3 is bearish with a low volume. Think it as effort and effect, if there are effort to push price in bar 2, bar 3 should be bullish. But if bar 3 appears bearish low volume, demand are most probably dying on that price level.
  • #265
  • Jan 17, 2013 10:10am Jan 17, 2013 10:10am
Quoting jacktrader1
well if you use vsa analogy to explain, i don't mean to take this out of topic but probably the best explanation is demand is strong on bar 2, with such high volume and rising price level, the next bar is expected to be bullish too. Yet bar 3 appears as a low volume bearish candle, which probably indicates the demand is no longer in the market, that's why bar 3 is bearish with a low volume. Think it as effort and effect, if there are effort to push price in bar 2, bar 3 should be bullish. But if bar 3 appears bearish low volume, demand are most...
That's how I read it also but am a little confused now
  • #266
  • Jan 17, 2013 10:12am Jan 17, 2013 10:12am
Quoting jacktrader1
well if you use vsa analogy to explain, i don't mean to take this out of topic but probably the best explanation is demand is strong on bar 2, with such high volume and rising price level, the next bar is expected to be bullish too. Yet bar 3 appears as a low volume bearish candle, which probably indicates the demand is no longer in the market, that's why bar 3 is bearish with a low volume. Think it as effort and effect, if there are effort to push price in bar 2, bar 3 should be bullish. But if bar 3 appears bearish low volume, demand are most...

That makes Better sense.
  • #267
  • Jan 17, 2013 10:22am Jan 17, 2013 10:22am
Quoting jacktrader1
well if you use vsa analogy to explain, i don't mean to take this out of topic but probably the best explanation is demand is strong on bar 2, with such high volume and rising price level, the next bar is expected to be bullish too. Yet bar 3 appears as a low volume bearish candle, which probably indicates the demand is no longer in the market, that's why bar 3 is bearish with a low volume. Think it as effort and effect, if there are effort to push price in bar 2, bar 3 should be bullish. But if bar 3 appears bearish low volume, demand are most...
This actually helps quite a bit.

Bar 2 was up on high volume and, since there was no follow thru, bar 2 marked the highest limit of market interest. Anyone interested in buying at higher prices had already done so I guess which gives us Bar 3, lower volume and price declining (showing a lack of interest in pushing the market higher). Bar 4 was an up bar (slightly) but on even less volume which would confirm the lack of interest at this new, higher level. Therefore, price has no choice but to drop back to where interest was before.

I may have this all wrong but that is what I am taking away from it.
  • #268
  • Jan 17, 2013 10:40am Jan 17, 2013 10:40am
Quoting jls
This actually helps quite a bit.

Bar 2 was up on high volume and, since there was no follow thru, bar 2 marked the highest limit of market interest. Anyone interested in buying at higher prices had already done so I guess which gives us Bar 3, lower volume and price declining (showing a lack of interest in pushing the market higher). Bar 4 was an up bar (slightly) but on even less volume which would confirm the lack of interest at this new, higher level. Therefore, price has no choice but to drop back to where interest was before.

I may have...

Makes more sense, but let see if spud agrees and lets see if this thought process works more times than not.
  • #269
  • Jan 17, 2013 11:25am Jan 17, 2013 11:25am
Quoting jls
This actually helps quite a bit.

Bar 2 was up on high volume and, since there was no follow thru, bar 2 marked the highest limit of market interest. Anyone interested in buying at higher prices had already done so I guess which gives us Bar 3, lower volume and price declining (showing a lack of interest in pushing the market higher). Bar 4 was an up bar (slightly) but on even less volume which would confirm the lack of interest at this new, higher level. Therefore, price has no choice but to drop back to where interest was before.

Yep ... that's how I would read it. Well said!
  • #270
  • Jan 17, 2013 12:15pm Jan 17, 2013 12:15pm
Being able to find the price levels when we see a volume peak has been a problem for me since I started looking at this thread, but I'm going to persevere. I've found an interesting tool to use which may help!!

See chart 1 - the usual 15min chart

Chart 2 - is a 1 minute chart with the 15 min candles superimposed on top (in read and green)

So, when we find a peak in volume on the 15min we can go look at the 1 minute and maybe pick out the price levels better?

Any thoughts?

I have attached the indicator which you need to put on the 1min chart and set Timeframe to 15 to see 15 min candles superimposed on it.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 15min.jpg Size: 134 KB
Click to Enlarge Name: 1minute.jpg Size: 102 KB
Attached File(s)
File Type: ex4 CustomCandle.ex4   10 KB | 457 downloads
File Type: mq4 CustomCandle.mq4   8 KB | 597 downloads
  • #271
  • Jan 17, 2013 1:38pm Jan 17, 2013 1:38pm
The attached modifications to the chart may help.

This is how my decision was made to go short at or above 1.3310.

Let me know if that answers the question.







Quoting jls
This post exemplifies why I am confused.

(3) We have established avolume peak at (2). Our new price level is 1.3310
OK. Makes sense.


Our new price level is 1.3310.
Yep. So far, so good.

So market interest seems to befar less at this new price level.
[font=Times New Roman][size=3]Huh? Price goes up (bar...
Attached Image (click to enlarge)
Click to Enlarge Name: jan17cxplain.gif Size: 23 KB
  • #272
  • Jan 17, 2013 1:47pm Jan 17, 2013 1:47pm
I look for peaks with small candles to help me narrow my options, or peaks/prices that will only give me one option. Generally long candles will be near the top of the candle and short candles near the bottom....not 100% but a good starting point until you can refine the position through other candles.

Quoting Willowgal
Being able to find the price levels when we see a volume peak has been a problem for me since I started looking at this thread, but I'm going to persevere. I've found an interesting tool to use which may help!!

See chart 1 - the usual 15min chart

Chart 2 - is a 1 minute chart with the 15 min candles superimposed on top (in read and green)

So, when we find a peak in volume on the 15min we can go look at the 1 minute and maybe pick out the price levels better?

Any thoughts?

I have attached the indicator which you need to put on the 1min...
  • #273
  • Jan 17, 2013 2:40pm Jan 17, 2013 2:40pm
Quoting Spudfyre
I look for peaks with small candles to help me narrow my options, or peaks/prices that will only give me one option. Generally long candles will be near the top of the candle and short candles near the bottom....not 100% but a good starting point until you can refine the position through other candles.
I assume you mean the price level will be near the top of an UP candle and near the bottom of a DOWN candle ?

Sorry, just checking
  • #274
  • Jan 17, 2013 3:49pm Jan 17, 2013 3:49pm


Quoting Willowgal
I assume you mean the price level will be near the top of an UP candle and near the bottom of a DOWN candle ?

Sorry, just checking
  • #275
  • Jan 17, 2013 6:24pm Jan 17, 2013 6:24pm
Trying to determine which way price will go using VPLT reminds me a bit of those pictures that can be different things depending on how you view it... is it a vase or is it two faces? LOL. I am determined to learn how to view the price/volume relationship to see what the charts are actually telling me instead of what I want them to tell me. Practice, practice, practice.
Attached Image
  • #276
  • Jan 17, 2013 7:24pm Jan 17, 2013 7:24pm
Quoting jls
Trying to determine which way price will go using VPLT reminds me a bit of those pictures that can be different things depending on how you view it... is it a vase or is it two faces? LOL. I am determined to learn how to view the price/volume relationship to see what the charts are actually telling me instead of what I want them to tell me. Practice, practice, practice.
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  • #277
  • Jan 17, 2013 11:56pm Jan 17, 2013 11:56pm
Quoting jls
Trying to determine which way price will go using VPLT reminds me a bit of those pictures that can be different things depending on how you view it... is it a vase or is it two faces? LOL. I am determined to learn how to view the price/volume relationship to see what the charts are actually telling me instead of what I want them to tell me. Practice, practice, practice.
Yes, you convince yourself its a vase, take the trade and then all you can see is two faces !!
  • #278
  • Jan 18, 2013 2:57am Jan 18, 2013 2:57am
This is really something that blows my mine. Never I have thought that volume can tell me something about the market. I always tot that the volume is just tick that differ from brokers to brokers. However, reading this thread, I get to know that it is like record of traders' activities and interests which we can take full advantage of. It is like playing with open cards in the casino. Those who are not knowing this is alike blind trading.
When in doubt, wait it out.
  • #279
  • Jan 18, 2013 7:02am Jan 18, 2013 7:02am
Quoting Willowgal
Yes, you convince yourself its a vase, take the trade and then all you can see is two faces !!
Yes, we are looking at the same picture as Spud but he sees one thing while we see another LOL. Gotta figure out how to see the same "picture" he does. I am farther along than I was at the beginning of the thread so at least I am making progress -- I hope!
  • #280
  • Jan 18, 2013 7:08am Jan 18, 2013 7:08am
Yea. Hopefully Spud can post more of his VPLT live trading so we can see closely how his thinking process is. Currently i am a bit lost myself too, even with repeatingly reading his previous posts lol.
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