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Volume Price Level Trading

  • #361
  • Jan 27, 2013 1:56pm Jan 27, 2013 1:56pm
Jess,

The most logical way to explain this candle is that the price tries to push down but fail and close high. As you can see that there is a long tail. A bit tricky. But sometimes, you have to observe how the candle is being formed. I will read this as no interest down candle.



Quoting FX_Starter89
Hi Spud,

I just made a review on the most quiet day of the week (21 Jan 13), and below is my points of view. The two PLs I take note is 3320 and 3305. Could you please help criticize whether my understanding does really make sense? I have a problem to fully understand candle 15 !!!

Candle (1): Price down, Volume pick. Determine the PL at 3320
Candle (2): Price up, Volume down. Confirm the 3320 PL
Candle (3): Price down, Volume down. Less interest in price moving down away from 3320
Candle (4): Price down, Volume up. Seeking a new PL 3310 or 3305.
Candle...
When in doubt, wait it out.
  • #362
  • Jan 27, 2013 4:47pm Jan 27, 2013 4:47pm
Take another look at 13, 14 and 15. What is 14?
14 is a volume peak, and after every volume peak we have a......volume down. With every volume peak we have a price level.
That's what happened there. The rest of your analysis is good.



Quoting FX_Starter89
Hi Spud,

I just made a review on the most quiet day of the week (21 Jan 13), and below is my points of view. The two PLs I take note is 3320 and 3305. Could you please help criticize whether my understanding does really make sense? I have a problem to fully understand candle 15 !!!

Candle (1): Price down, Volume pick. Determine the PL at 3320
Candle (2): Price up, Volume down. Confirm the 3320 PL
Candle (3): Price down, Volume down. Less interest in price moving down away from 3320
Candle (4): Price down, Volume up. Seeking a new PL 3310 or 3305.
Candle...
  • #363
  • Jan 27, 2013 8:53pm Jan 27, 2013 8:53pm
Quoting Spudfyre
Take another look at 13, 14 and 15. What is 14?
14 is a volume peak, and after every volume peak we have a......volume down. With every volume peak we have a price level.
That's what happened there. The rest of your analysis is good.
Hi Spud,

Thank you very much for your reply. Do you mind if you can help elaborate more on your point? From my view, candle 15 is rejecting with low volume to move up away the PL 3305. Sorry to ask you again, but I keep confusing myself.

Thank you,
  • #364
  • Jan 28, 2013 12:09am Jan 28, 2013 12:09am
Candles 10 and 11 establish the 1.3305 (so do 4 & 5)
11,12,13 are doing what you'd expect and simply supporting 1.3305
14 and 15 confirm 1.3305

The tail falls off after 8,9,10 where volume climbs and price drops, 11-15 are the end of the downward momentum

Price charged down to 1.3305, and the market likes this, volume was up, price down. Price was moving down and away from 1.3320 and was attracted to a new price level which ended up being 1.3305. At 1.3305 price tries to move away from 1.3305 and there is no where to go. Market isn't interested and price is not being attracted to a higher or lower level as it breaks away from 1.3305.

The real move is to wait at 1.3305. You could go long, but not short after 15 as I'd use the tail break away as a sure sign of downward exhaustion.

If you missed that move and settled on waiting until 16 finished, you'd go long as volume up, price up is an obvious attraction to a new price level. That is a lot easier to see. That's the move I'd go for. The climb to 1.3320 is very straightforward after that.

Quoting FX_Starter89
Hi Spud,

Thank you very much for your reply. Do you mind if you can help elaborate more on your point? From my view, candle 15 is rejecting with low volume to move up away the PL 3305. Sorry to ask you again, but I keep confusing myself.

Thank you,
  • #365
  • Jan 28, 2013 6:56am Jan 28, 2013 6:56am
Hi Spud,

Thank you so much for your explanation. I will keep learning about this invaluable knowledge of the Volume Price trading technique. This really helps me understand what the market is doing!

Quoting Spudfyre
Candles 10 and 11 establish the 1.3305 (so do 4 & 5)
11,12,13 are doing what you'd expect and simply supporting 1.3305
14 and 15 confirm 1.3305

The tail falls off after 8,9,10 where volume climbs and price drops, 11-15 are the end of the downward momentum

Price charged down to 1.3305, and the market likes this, volume was up, price down. Price was moving down and away from 1.3320 and was attracted to a new price level which ended up being 1.3305. At 1.3305 price tries to move away from 1.3305 and there is no where to go. Market isn't interested...
  • #366
  • Jan 28, 2013 8:34am Jan 28, 2013 8:34am
Hi Spud,

It's me again. I do have a chance to follow the market today. I'm actually a bit confused about candle 1, should I take a long trade right after candle 1? Because from my thinking, I see there is more interest to go long at the end of candle 1 (Price up, Volume up), with support from the prior candle and PL 3435. However, it will be a loss when candle 3 spikes down. Is it ok to accept this loss, or my decision is wrong?

Or does it mean the long leg of candle 1 shows the long interest is now losing to the short interest?

Thank you very much,

http://i276.photobucket.com/albums/k...ps6ab7a23a.png
  • #367
  • Jan 28, 2013 9:50am Jan 28, 2013 9:50am
Grrr missed my TP my a pip lol Good job its a demo account. Though got the direction right. Then it shot the other way.... I sold at the down arrow start of the bar. Volume had increased as price went down.
Attached Image (click to enlarge)
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  • #368
  • Jan 28, 2013 10:24am Jan 28, 2013 10:24am
Does the issue that volume is not aggregated with Interbank traders bother any of you who use Volume?

I ask because it's scared me off the use of volume outside of stock trading. I assume you feel the retail volume flows mirror big money flows? Or that retail flows drive the market, particularly in smaller time frames?
  • #369
  • Jan 28, 2013 10:28am Jan 28, 2013 10:28am
Quoting marine1983
Grrr missed my TP my a pip lol Good job its a demo account. Though got the direction right. Then it shot the other way.... I sold at the down arrow start of the bar. Volume had increased as price went down.
Hi marine1983

mhh... well I can't see a short trade where you entered.
the candle prior of your entry bar, was a up bar on higher volume. If anything it looks more like a long.
But with that long upper wick I think I would have sit on the sidelines.

If I look at FX_Starter89 chart (post 367). I think I would have taken a long after bar nr.3
The chart reading I did over the weekend showed me some good trades when a pinbar developed over a Price Level on high volume.
Just like bar nr.3

But please Spud let us know your opinion on this chart.

Thanks
  • #370
  • Jan 28, 2013 10:43am Jan 28, 2013 10:43am
The reason why I entered I could be wrong. Sorry I have corrected the picture the arrow is now in the correct place.

The candle before was a spinning top. Price was on the lines and not going anywhere. Volume was lower than the previous candle showing weakness in price going higher. So I eneterd a sell on the indicated bar. The next candle was up and so was volume. I guess I should have got out at BE. But Im playing and testing at the mo.

The next 2 candles were down but volume increased showing that the price wanted to go lower. Which it did and missed by a pip. I had set TP/SL to 10 pips showing a 1:1 reward. Im using a trade manager EA for setting this. All I have to do is pull the trigger.

Looking at the chart further along my price line is spot on which is important to me. The price comes back to it and has another big rejection showing a perfect supply demand area. As long as the basics are right, with chart time it will come.

This method is the only one that makes sense and logical. No lagging indicator. Just the mk1 brain and trade what you see.
Attached Image (click to enlarge)
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  • #371
  • Jan 28, 2013 11:02am Jan 28, 2013 11:02am
Quoting marine1983
The reason why I entered I could be wrong. Sorry I have corrected the picture the arrow is now in the correct place.

The candle before was a spinning top. Price was on the lines and not going anywhere. Volume was lower than the previous candle showing weakness in price going higher. So I eneterd a sell on the indicated bar. The next candle was up and so was volume. I guess I should have got out at BE. But Im playing and testing at the mo.

The next 2 candles were down but volume increased showing that the price wanted to go lower. Which it...
Now I can follow you.
Yes charttime will give us experience. Experience will tell us if a spinning top is a no go and if we're better off to wait for the next candle.
Sure Spud will have some more hints for us.
  • #372
  • Jan 28, 2013 12:02pm Jan 28, 2013 12:02pm
Your right. Volume/price is relativity....worked for Einstein to define the universe, relativity should work well for trading

Quoting Tradedly
Does the issue that volume is not aggregated with Interbank traders bother any of you who use Volume?

I ask because it's scared me off the use of volume outside of stock trading. I assume you feel the retail volume flows mirror big money flows? Or that retail flows drive the market, particularly in smaller time frames?
  • #373
  • Jan 28, 2013 12:44pm Jan 28, 2013 12:44pm
The move to 1 is interest in a new price level, at candle 1 you should be long. At candle 2, that's the confirmation of a price level for 1.3440.
You have to take the candle and volume (which will always drop) after a volume peak as establishing the price level first and foremost.
Forget the #3 candle tail and focus on the the volume price from candle -2 to candle 2 at close.

The strength "here and now", everything you know is at price level 1.3440...so that has to be your play. Don't guess what the market might do.

So, you should be long somewhere around 1.3440. Your stop somewhere around 1.3425 to 1.3430. Even if you got stopped from #3, it would be wise to take a long from 1.3435 on #3 (or lower) to chase it up and back towards our 1.3440 price level. When price is creating this huge down candle 10 pips away from our price level...you got to play what you know.

At the end of 3, it all makes sense for long. Look at the closes of price (1-3)...up...volume up. (use that trend line). You should be in a long and riding 4 to the next price level. At 5, your stop is moved way up to at least 1.3460 and you are a pip magnet.



Quoting FX_Starter89
Hi Spud,

It's me again. I do have a chance to follow the market today. I'm actually a bit confused about candle 1, should I take a long trade right after candle 1? Because from my thinking, I see there is more interest to go long at the end of candle 1 (Price up, Volume up), with support from the prior candle and PL 3435. However, it will be a loss when candle 3 spikes down. Is it ok to accept this loss, or my decision is wrong?

Or does it mean the long leg of candle 1 shows the long interest is now losing to the short interest?

Thank you...
  • #374
  • Jan 28, 2013 12:54pm Jan 28, 2013 12:54pm
VPLT is actually much easier to play in "real time trading", so long as you don't get ahead of the market and start guessing what will happen next.
You are correct, nothing beats chart time.

The nice thing about volume is; it is steadily progressive...i.e. volume can only stop or increase inside a candle, never decrease. The dangerous part, not waiting long enough for the candle to close...or be extremely close to close before making a decision. Their can be some serious price moves in the last 2 minutes of a 15 minute candle...don't get ahead of the game.


Quoting colbru
Now I can follow you.
Yes charttime will give us experience. Experience will tell us if a spinning top is a no go and if we're better off to wait for the next candle.
Sure Spud will have some more hints for us.
  • #375
  • Jan 28, 2013 5:07pm Jan 28, 2013 5:07pm
Hi Spud,

I don't quite get the logic for a long entry around 1.3440. What is the logic to go long? Candle -4 is a down peak. Candle 3 is also a down peak. There is nothing in between -4 - 3 to support long, no indication of long because all the volume prior to candle 3 are lower than the peak at -4.

If you use the level jump between -3 to 2, won't it be a weak level too?

Hope you can elaborate more on this.




Quoting Spudfyre
The move to 1 is interest in a new price level, at candle 1 you should be long. At candle 2, that's the confirmation of a price level for 1.3440.
You have to take the candle and volume (which will always drop) after a volume peak as establishing the price level first and foremost.
Forget the #3 candle tail and focus on the the volume price from candle -2 to candle 2 at close.

The strength "here and now", everything you know is at price level 1.3440...so that has to be your play. Don't guess what the market might do.

So, you should be long...
When in doubt, wait it out.
  • #376
  • Jan 29, 2013 8:09am Jan 29, 2013 8:09am
Hi Spud,

Thank you very much for your comments.

Could you help explain more about "The move to 1 is interest in a new price level, at candle 1 you should be long."? I'm just not clear about the entry point? Is it at candle 1 open or close? How can we confirm a long at candle 1, because as you mentioned candle 1 just tries to target the new PL 3440?

At candle 3 close, I agree with you that it is very clear for a long entry, and I actually did.

Regards,

Quoting Spudfyre
The move to 1 is interest in a new price level, at candle 1 you should be long. At candle 2, that's the confirmation of a price level for 1.3440.
You have to take the candle and volume (which will always drop) after a volume peak as establishing the price level first and foremost.
Forget the #3 candle tail and focus on the the volume price from candle -2 to candle 2 at close.

The strength "here and now", everything you know is at price level 1.3440...so that has to be your play. Don't guess what the market might do.

So, you should be long...
  • #377
  • Jan 29, 2013 8:17am Jan 29, 2013 8:17am
Hi Yicktan,

From my point of view, candle -3 is a strong pull up, candle -2 shows less interest to go down, and candle -1 finally rejects the PL 3435 with long wick. This is why I start looking for a long entry...!

Maybe Spud can give us some better idea.

Regards,

Quoting yicktan
Hi Spud,

I don't quite get the logic for a long entry around 1.3440. What is the logic to go long? Candle -4 is a down peak. Candle 3 is also a down peak. There is nothing in between -4 - 3 to support long, no indication of long because all the volume prior to candle 3 are lower than the peak at -4.

If you use the level jump between -3 to 2, won't it be a weak level too?

Hope you can elaborate more on this.
  • #378
  • Jan 29, 2013 9:12am Jan 29, 2013 9:12am
Hi Spud,

I am a newbie and I would like to thank you for sharing this excellent approach in trading. Although it's still hard for me to chew but I am pretty sure to have a better understanding when going through.

Again, thank you Spudfyre! I am looking forward to your next explanation/comments.
Pursue the best and share to others!
  • #379
  • Jan 29, 2013 9:26pm Jan 29, 2013 9:26pm
If I look back at the eu chart, most of the time a candle with long wick + volume is a sign of reversal but it is not a sure sign. We really need a better way to explain / identify things.

Also, sometimes, a peak volume is followed by a bigger volume. You won't know what is next in the "here now" approach. Sometimes, a no interest up / down is followed by more up / down.

We have to have more condition on explaining things. Like trading hours, like how long to trade, like tp, like how long to wait after one trade is closed, like what to do when we are in the trade. Are we riding the trend or are we scalping for small pips. Also what are the warning sign of trend reversal.

This is a good system and I feel we can develop it further with a more consistent methodology.




Quoting FX_Starter89
Hi Yicktan,

From my point of view, candle -3 is a strong pull up, candle -2 shows less interest to go down, and candle -1 finally rejects the PL 3435 with long wick. This is why I start looking for a long entry...!

Maybe Spud can give us some better idea.

Regards,
When in doubt, wait it out.
  • #380
  • Jan 30, 2013 9:04am Jan 30, 2013 9:04am
I just saw a good scalp opportunity, my reasoning was that previous interest was high and price went up, it hit level 55. It then hovered below 55, showing no interest, so buy order for 55, a modest TP at 60, and SL at 50.

Doesn't it look nice?

http://postimage.org/image/nk2hgcaab


But reality bites, as always

http://postimage.org/image/pzjcp8tg7

The truth is, I feel like I'm missing entries. Or instead I should reverse the direction even though it is the opposite to the rules.

Is someone else having better results?
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