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Volume Price Level Trading

  • #281
  • Jan 18, 2013 12:12pm Jan 18, 2013 12:12pm


The trick is that some trades are 2 faced, in that the market can turn on us midway. VPLT will give you a lot of confidence to trade in a direction, but...and the BIG but.....you have to be ready to accept a market turn, and not get fixated in 1 direction....or 1 decision. Let the market tell you...you don't tell the market.

The beauty of VPLT is that if you are wrong, the usual turn around can be caught and the losses non-existence or very low. As well, it should be very rare that you get a continous string of trades wrong. If you start getting a string of wrong trades, then you need to take a good hard look at why you are seeing things in reverse, and turn your mind around...the market is too hard to move...eaiser to turn your brain.

There are a lot of moves in price/volume that become recognizeable....I don't want to say patterns because then people blindly trade patterns and that can be dangerous. However, these recognizeable moves will give you a starting point, or make you double check your position. The most common of these recognizeable moves is the volume drop before and after a volume peak...in live trading it can give you a definite advantage to either being in/out of a trade. I know that is like saying "the sky is blue", but when in a live trade, you'll be amazed how helpful that knowledge is.

The weekend is here, it will give me a chance to post some charts with reasoning for long/short.


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.
  • #282
  • Jan 18, 2013 12:32pm Jan 18, 2013 12:32pm
Quoting Spudfyre


The trick is that some trades are 2 faced, in that the market can turn on us midway. VPLT will give you a lot of confidence to trade in a direction, but...and the BIG but.....you have to be ready to accept a market turn, and not get fixated in 1 direction....or 1 decision. Let the market tell you...you don't tell the market.

The beauty of VPLT is that if you are wrong, the usual turn around can be caught and the losses non-existence or very low. As well, it should be very rare that you get a continous string of trades wrong. If you...
Great I look forward to more examples.

Can you just confirm that you are trading purely off the 15 min chart on EURUSD (and not looking at higher TF for trends etc.) and only looking back around 10-12 hours (40-50 candles) ?

Thanks for sticking with us 'slow learners'

Have a great weekend
  • #283
  • Jan 18, 2013 6:00pm Jan 18, 2013 6:00pm
I'm not using anything other than M15. You could use multiple time frames, but at this stage I think it would add a layer of complexity we really don't need. (I'm an MTF advocate, just so you know).

The live trade examples I published, I found 3 volume spikes and a price level or two. Not even 6 hours back. I recommended 12-24, to get you practicing, but when you get good at establishing price levels, you just need a starting point established and go. Look at my last two live trades and I'm really starting those trades from the last volume peak (candle 0). I take a look back about 4-5 candles for a bigger picture, but I'm starting to plot the market from (1). How far you go back is really about getting a feel for the market....I'd certainly recommend when starting out you go back the 12-24 hours for good practice....especially if money is on the line.....a little extra work reaps the rewards.

Quoting Willowgal
Great I look forward to more examples.

Can you just confirm that you are trading purely off the 15 min chart on EURUSD (and not looking at higher TF for trends etc.) and only looking back around 10-12 hours (40-50 candles) ?

Thanks for sticking with us 'slow learners'

Have a great weekend
  • #284
  • Jan 18, 2013 6:45pm Jan 18, 2013 6:45pm
I have compile everything spudfyre have posted. It is almost 80 pages long. Well, there are a lot of information. I am going to read this entire thread the second time. I MUST master this. Once I get familiar, I want to build a volume alert so that we don't have to sit and stare at the screen all time.
When in doubt, wait it out.
  • #285
  • Jan 18, 2013 6:50pm Jan 18, 2013 6:50pm
Forget to attach the attachment. Here it is.
Attached File(s)
File Type: doc Volume Price Level Trading.doc   1.6 MB | 1,093 downloads
When in doubt, wait it out.
  • #286
  • Jan 18, 2013 7:03pm Jan 18, 2013 7:03pm
Quoting yicktan
Forget to attach the attachment. Here it is.
Very Nice.Thank your sharing.
  • #287
  • Jan 18, 2013 7:28pm Jan 18, 2013 7:28pm
Quoting Spudfyre
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.
Hi spudfyre

Thank you for your kindly sharing.Please provide more information
about your think for red line and green line from volume picture.How u decision for that.
And does it can apply for other cross peak volume price.
  • #288
  • Jan 18, 2013 8:27pm Jan 18, 2013 8:27pm
VPLT - Failing Price Climb

Using the chart below the green trend lines on price show rising price. The green trend lines on volume show rising volume. The areas I marked "Tail" is where the volume drops off. This is a sure sign that climbing price is failing. That is one way to look at this chart.

On the price, the trend lines follow a price up. On the volume, the trend lines seem to support a climbing price and volume seems to get weaker when price drops.
Attached Image (click to enlarge)
Click to Enlarge Name: fallingtail.gif Size: 21 KB
  • #289
  • Jan 18, 2013 8:59pm Jan 18, 2013 8:59pm
Same chart as before only this time I put in 3 red price and volume trend lines.

The first price/volume seems to support an upward price move, since volume is getting less as price goes down. You could definitely get tricked here into going into a long trade, as low as you could below 1.3375, you would recover later as you would see the market turn to short from both the volume falling off the price/volume climb that follows (shown in previous chart), or with what happens next.

The second price trend line is relatively flat, you could give it a little up trend, but certainly no down trend. Meanwhile volume slides down. This is the market not interested in this higher price...a small ceiling around the 1.3380 price. Here is a definite short entry at 1.3380 or anywhere above our price level of 1.3375.

The 3rd price/volume trend lines seal the short deal. Even if you ignore the price drop and focus solely on the last 3 candles climbing, volume is not there to support the price climb. If the market had any interest in going up, the volume would have increased with price, at best volume stays flat.

So, taking all 3 groups together:
The first price/volume group is the end of the previous long climb. Still some market momentum trying to move the price higher.
The 2nd price/volume group sets the ceiling of upward price movement and gives all in the market notice..."that's it".
The 3rd price/volume group is the gathering of short orders at 1.3375 and then the price will drop.

Now don't go expecting the market is going to drop 50-100 pips every time the market wants the price to drop. Not on this chart but soon after, the price drops 10-15 pips and then the price/volume turns again and goes into a steady climb. You grab your pips and trade with the market....not what you forecast the market will do...what the market is doing.
Attached Image (click to enlarge)
Click to Enlarge Name: fallingclimb.gif Size: 20 KB
  • #290
  • Edited 9:37pm Jan 18, 2013 9:26pm | Edited 9:37pm
VPLT - A Tough One

Here's a tough one to catch, but the market does tell you....so long as you don't create bias for one direction and listen to the market. It even fooled me while I was writing this!

There looks to be a lot of support for a price climb on this chart. Rising price, rising volumes.
Attached Image (click to enlarge)
Click to Enlarge Name: tricky1a.gif Size: 21 KB
  • #291
  • Jan 18, 2013 10:05pm Jan 18, 2013 10:05pm
There is no doubt support for a climbing price to 1.3390.

Candle (1) is of interest, if only because volume is so low at 1.3390. Certainly the fall in price next to it should be expected. Candle (1) is at the end of a typical "tail" that I spoke wrote about earlier where price is climbing and volume falls off at the end of the price climb.

Candle (2) crosses 1.3390 with a volume peak. This price level seems strong as there is growing volume to this peak, but what follows the peak is a drop in price. Here you might enter a long trade and likely get stopped out by candle (3) if you didn't bail at the previous candle before (3).

Candle (2) to (3) is a market supporting the 1.3880 price level. At the very least you should be scratching your head at the volume spike of candle (3) being so high when it doesn't touch 1.3390. Instead it, fell climbed through 1.3385 and fell through 1.3380. Go back to candles (1) and (2) and this seems to make a little more sense.

So candle (4) looks like a breakthrough up. And it is, this price/volume is supporting a market to go from 1.3380 to 1.3390. This is where you need to focus on what the market interest has been on 1.3390...not very strong. Like candle (1) and like candle (2) ....candle (4) should be followed with a price drop....and it is (not on chart).

This is one that will likely fool you because so much bias will be seen on the price climb. However, if you think about this long enough, you can see the top price weakness.
Attached Image (click to enlarge)
Click to Enlarge Name: tricky1c.gif Size: 23 KB
  • #292
  • Jan 19, 2013 5:18am Jan 19, 2013 5:18am
Spud, I dont know if my logic is right. Im considering the PL is something like magnet As the price is going to that level, the volume is going up. And as the price going past( crossed) or bounce away from that level, the volume is going down. Is it right to think that way?
  • #293
  • Jan 19, 2013 6:26pm Jan 19, 2013 6:26pm
Quoting Spudfyre
/---/

Candle 26 (01:30): Down. Price goes up and interest is less. Looks like we are starting to see the bottom of this price move. Could definitely put a long in here if we get down to 1.3040 (to make it worthwhile).

Candle 27 (01:45): Down. Well that's a little larger price move down then expected. Hit our 1.3040 mark so we can go long to 1.3050. Very little increase in interest and no peak still, so no new price levels down here. This is some take profit territory, put the longs in play.

Candle 28 (02:00): Up. There we go. Good solid...
Hey Spud!

Nice to see you back, I remember you from my "lurking days", obviously I'm just now stepping out of the shadows myself. You have a really interesting thread going, but some things need clearing.

You went long in candle 4 and candle 27, I'd describe the situation in those 2 trades quite similar - declining price with dropping interest (volume), therefore a pull to upper price line. In hindsight they are good scalps, justifiable entries as the price takes off after that. But if I look at candle 19, the same thing happens - price drops, volume drops, you even say it yourself that "market still showing it doesn't like being below 1.3055". My question is why are you neglecting a long order there? I believe it to be consistent with the whole teaching that there should be a long trade at candle 19, even though it would prove to be a loss.

Bar with arrow is nr 16.

http://www.forexfactory.com/attachme...6&d=1357784589




Your clarification and comment most appreciated!
  • #294
  • Jan 20, 2013 9:54am Jan 20, 2013 9:54am
Reading post #288-291. I feel like the market is on the race track. The engine is running at full speed but the race car has not moved yet. The gear has not been engaged yet. And all the sudden it thrusts... It is a PL & PV formation that needs to be documented in my trading journal. I am a big fan of pattern, as it gives the most up to date signals.
When in doubt, wait it out.
  • #295
  • Jan 20, 2013 9:19pm Jan 20, 2013 9:19pm
Just want to make a few comments studying this system.

1. If the bar moves and volume low, it is a sign of traders taking profits. Strong sign of reversing trend.
One possible explanation of this phenomenon is that traders close trades and don't open new contract.

2. Bar small and volume high means that market is going to move. It is like race car on the race track gasing up for the signal to start and thrust.

3. Spud has mentioned that VPLT is relative. By that he probably means the volume and price are relative and you should also read the volume and price in a block of few bars. You have to refer to other surrounding bars and see what the marketing is trying to do.

4. For 10-30 pips (depending on market session), it will take you 2-3 hours of trading in average. From my statistical studies, if you aim for 50 pips or more, you will need to trade 2 times, one entry for 20 pips and the other one entry for 30 pips. Or, 3 entries of 15, 15, 20. It all depends on the market sessions you are trading in.

5. When the market is in trending mood, it will take 1-2 hours to settle. Then you can read the chart and do your analysis to determine the new PL.

6. Volume is the market's Interest, it is also the market's Intention. Learn to read it and you can get into the mind of the market. Never goes against its Interest and Intention or it will draw money from your account.

Hope this summary helps some one and look at this VPLT from another anchor.
When in doubt, wait it out.
  • #296
  • Jan 20, 2013 9:45pm Jan 20, 2013 9:45pm
Right idea. I was even going to use that analogy


Quoting mario777
Spud, I dont know if my logic is right. Im considering the PL is something like magnet As the price is going to that level, the volume is going up. And as the price going past( crossed) or bounce away from that level, the volume is going down. Is it right to think that way?
  • #297
  • Jan 20, 2013 9:56pm Jan 20, 2013 9:56pm
You could go long at 19, but you also have to wonder what 20 is going to look like if the volume is lower (a failed climb?) or higher (a downward price move?)....lot of questions here so I'd watch 19 and 20, which pops in a new peak and price level. We keep seeing failures of support for the higher price levels forming. They reach up and fail, reach up and fail. That's why the long doesn't look too good.



Quoting candero
Hey Spud!

Nice to see you back, I remember you from my "lurking days", obviously I'm just now stepping out of the shadows myself. You have a really interesting thread going, but some things need clearing.

You went long in candle 4 and candle 27, I'd describe the situation in those 2 trades quite similar - declining price with dropping interest (volume), therefore a pull to upper price line. In hindsight they are good scalps, justifiable entries as the price takes off after that. But if I look at candle 19, the same thing happens - price drops,...
  • #298
  • Jan 20, 2013 11:18pm Jan 20, 2013 11:18pm
Auto Grid Indicator. Automatically draw line on 0 and 5 prices.
Attached File(s)
File Type: mq4 Grid.mq4   6 KB | 570 downloads
When in doubt, wait it out.
  • #299
  • Jan 21, 2013 12:26am Jan 21, 2013 12:26am
Let me attempt to summarize it in a few sentences like in the condition in EA programming.

1. The VPLT system uses volume, price & price level to determine the interest of the market.

2. Buy when the market has interest in higher price
2a. When the price is below the price level, it builds up volume toward the price level. Or
2b. When the price is above the price level, it builds up volume moving away (upward) from the price level.

3. Sell when the market has interest in lower price
3a. When the price is above the price level, it builds up volume toward the price level. Or
3b. When the price is below the price level, it builds up volume moving away (downward) from the price level.

You can see / use the volume as fuel for the price to move in any particular direction. More fuel, more power to move. If the market wants the price to move in a particular direction, you will see the market fuel it with volume. I hope this is clear enough for people to catch the concept.
When in doubt, wait it out.
  • #300
  • Jan 21, 2013 3:29am Jan 21, 2013 3:29am
Here's a little something on volume divergence I use alongside SR levels. Similar theme to reading volume bars.
Attached File(s)
File Type: pdf Volume Divergence.pdf   244 KB | 6,817 downloads
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