Volume Price Level Trading

It looks like this, compared to standard OBV.

This strategy doestn work for me so I gave up.Its a waste of time. Favorite's strategy is very much easy to gain 10 pips in one of his pattern.

Chasing trends - you can use VPLT to start a trade and jump in with your favourite trend following strategy. You can also use VPLT to delay a trend strategy entry...going for the 10-15 pip move first and then weighing the merits of your trend strategy to follow the trend. You can also broaden VPLT and look for price levels that play wider apart. You can also use VPLT to signal changes in the trend. VPLT has many uses if you wish to see what the market is doing now.

Stochastics are a great aid to chasing a trend. My articles on Elevator to Pips is a great follow after a VPLT launch. You can use VPLT to stop a trend chase.....by watching the price levels emerge, each would be a decision as you follow the stochastic levels along. Just make sure you are choosing the best stochastic signatures over multiple time frames and still stick to VPLT on the M15 as a signal maker when each price level is created. Chasing a trend this way does take a lot of attention through the trend, so only optimal if you have the time to stick to the trade...i.e. be prepared to be glued to your computer screen for several hours.

Hi Spud
I have discovered this thread and another older one from you in the late 48 hours, and I must say I LOVE YOUR approach to the markets !

One question which I think is quite relevant to this thread : are you aware or the Marney approach to "volume" in forex markets ? As you know, volume or "interest" in forex is very dependant on the time of day, also depending on the currency you are trading. The basic idea is : if you take your EurUsd pair, volume will be very low (in general) from 22:00 GMT till 5 or 6 GMT, then will start to pick up, and will make significant progress till 11 GMT then pause somewhat, then pick up again around 12 or 13 GMT and usually spike a daily top around 16 till 17 GMT. Of course there are exceptions, but generally speaking there are huge differences between the overnight (GMT) and the London-US session volumes !
So a certain guy, MArney, credit be given to him, had the idea to compare volumes and growth or decay of volume during the day, not only from one candle to the next, but also putting each time period of day in relation with the same time periods of day during the former X days. Not sure if I am clear here !
Anyway in short it means that a spike of, let's say 100 at 4:00 GMT can be a big spike if the average for that time period of day was 50 in the last 20 days, even if at 14:00 GMT the average volume would be around 500.
An indicator for this is available on the web, and I was thinking maybe an oscillator based on that idea would also be helpful to your appoach, which, by any standards that I know of, is paramount !!!
Anyway, I am just at the beginning of this thread, but I intend to try and figure out some way of integrating this Marney approach to your concepts. One other thought, just going through a couple of examples lately, I find that your theory goes perfectly in harmony with another one based on "supply-demand" concepts. But this is just ok, and both ideas reflect the same thing : people are more willing to buy, or sell, at a determined level, or not ! And this can definitely be read, like a tape, along the charts.
So not only do I love your approach, but I want to sincerely thank you for you ability to share and explain and convince ! So many things I don't feel capable of doing ! (still feeling like a worm trying hard to survive in this dangerous (but so exciting) world of forex !!)
THX

Just an example to illutrate what I was saying : the blue line in the volume indicator is the average in the last (10, user parameter) days, for the current bar, whatever the timeframe. You can see that the spike of interest around 2:00 GMT was a genuine one, compared to the average volume for that time of day.

Thanks for the info BlueJay. I should mention that my approach isn't looking at the volume number but rather the volume peaks, that is a high volume bar surrounded by a lower volume bar on each side. It is the way volume and price work together where volume is a "relative" reaction. Volume is used on the basis that just about every other trader out there uses indicators (not saying that is a bad thing) to make a trade decision and the relative volume movement is reactionary based on those decisions -- "relative" to each other.
You can see this "relative" phenomenon by looking at volume and say stochastics head to head and looking at where the better trade opportunities fell in stochastics compared to how the volume peaked.
I'm simplifying my explanation a great deal here, but in general that's the how I'm using volume peaks.

I'll give Marney a read.

I just love VPLT and so far its working great for me.if you don't mind spudfire would u kindly use charts to explain it when using the elevator to pips system together with VPLT to chase the trend ?i belive it will greatly assist in understanding VPLT.

Your thinking sounds like it is very close to TraderatHome and his more recent activities on the SonicR thread. Its hard to find so here's some of his comments. Still work in progress but pooled knowledge and all that.

Regards

Spudfyre,

Many thanks for explaining volume - price relationship in such an easy way. Keep up the good work.

Looking fwd to many more examples from you.

It's always a pleasure to listen and study to Spudfyre trading lessons !
Ok I've never traded using volume stuff but it's really fascinating as it's presented in this sound approaching presented in this thread, so I played a little bit in a demo account, I don't know if I played following rules and hope that I catch devil
So here's my first VPLT trade : since yesterday night there was in my understanding a price level at 1.3040 and this morning at 9:15 a volume peak appears with determinator candle again around 1.3040 so my thought was that market won't go up, so waited for next candle after determinator which was down with volume increased , so I shorted at the open of next candle (the one with red arrow) with 10 pips tp and sl (R:R 1:1) since I cannot see a clear level below I prefer a less risky approach. Luckily (or devil was right? ehhe), price go south and banked 10 pips (demo pips unfortunately).
Hope to see Spudfyre reply to check if I did right or it was only lucky

Cheers,
Skyline

After first trade closed sucessfully, waited market to show his hands , at 10:15 a new volume peak formed with price level at 1.3020 (based on determinator candle rule), so waited few candle and while price was going up interest (volume) went down so I thought market didn't like to go up , my bias was still short , so after 2 up candle with volume decreasing opened another short (second red arrow), with tp at 1.3020.
Price went down as I thought , but volume decreased so I bailed out at the close of down candle with +10 pips, if i had waited next candle was still down and 1.3020 level reached, btw I'm happy with my 10 immaginary pips
It seems so simple to read the market in this way, of course there will be bad trade that occurs.

Cheers,
Skyline

While I'm programming I still follow this funny eurusd market, a new volume peak formed at 11:45 (orange vert line) with new price level at 1.3000, again I waited some candles which went up while interest goes down so market don't like so much previous price level at 1.3020, so I shorted at 4th candle after peak candle with tp at 1.3000 and sl a little bit larger at 1.3040. Market went south as expected , sl moved to entry at 1.3015 so this is a free trade I cannot loose anything now , candle is down with volume slightly up so i stayed in to see if 1.3000 is reached , if not I will exit with some demo pips gained

Edit : price finally went up so closed trade with 0 pips , not bad!

Again, volume peak formed at 12:45 (where my previous trade was entered and then closed at breakeven), with new price level at 1.3010 then price goes up while interest went down , so bias is still short for me , waited few candle to see if market liked 1.3010 but this wasn't the case , so shorted again at forth red arrow with tp at previous price line 1.3000 and sl at 1.3020.
Trade was again succesfull around 10 pips gained , today opened 4 trade, 3 winning , 1 at breakeven , gained around 30 pips
I wish my pips today was real and big enough as value
Btw I'm amazed on how this system put trader on right track , Thx Spudfyre !

Cheers,
Skyline

Great trades, Skyline! But these make me ask one question - how do you time your entry? Can you tell me why you waited till the 4th candle on couple of trades?

Thanks!

Let's save this thread, so we can get more skill and knowledge from this trading lessons by Spudfyre!

Absolutely kawagkoan.
I've been waiting for weeks for more examples from Spud.
But thanks to skyline (ciao) I'm back.

I also asking myself the same thing looking again at chart
Well said that I'm no master at all about this method which I red for the first time two days ago, I simply tried to apply Spud's rules the best in my understanding, when I saw a volume pick followed by 3 up candle (could also be 2 or 1) and volume decreasing that was a signal that market doesn't like to go up , there was no strenght or in Spud's term no 'interest' so I shorted.
I agree that I was lucky to pick exactly the turning point in quite all of this trades , but in anycase even if I entered one or two candle before my stops won't be hit since it was above where the previous price level was set.
It was like 6 month/1 year since I opened MT4 and look at a chart , maybe today was some sort of easy market to play with , and in range market it will be much more difficult to pick the right entry candle , but even if you are in wrong direction, following volume/price action togheter should avoid big losses (at least this is what I hope)

Cheers,
Skyline

I'm wondering if this indicator marketprofile which should show on chart where tick volume for each quotes is, could be of any help trading VPTL.
Spud do you think we could integrate in VPTL as a confirmation about price level ?

Cheers,
Skyline

I've never used Marketprofile, but I've seen it. It may help illustrate where the stronger price levels are, but without seeing it in action and using it, I can't say much. I'll definitely play with it and add a few comments later on.

I've never used it too but remember was used somewhere here in FF , maybe could be helpful to identify first price level based on previous day values for newbie like me, infact looking at my previous chart it seems 3 price level (1.3040,1.3010,1.2990) were identified correctly.
Will wait for your response about it using in real time

Cheers,
Skyline