travlr
80 posts
msg #31368
- Ignore travlr |
3/10/2004 10:07:24 PM
http://elitetrader.com/vb/showthread.php?threadid=29005
I found this journal to be very helpful and enlightening. To me the context is extremely important because I feel it is necessary to understand why price acts the way it does; Or what an indicator is the reaction of. It's simply Supply and Demand. A lot of traders work solely with this concept when analyzing/trading with charts (barely any indicators... if any at all).
Price, Volume, Supply and Demand Is The Crux Of Trading. It is the most primary indicator because every other is a subsidy to it. I personally have not found it being mentioned, discussed, or taught nearly enough.
BTW… At the beginning of this journal are some attachments that are not about P,V,S,D but rather an analogy of the different roads a trader might take. Also, if you are not familiar with futures, don't let it stop you from reading all of this. You have to remember that all trading instruments are relative. Take what is expressed and simply apply it to your methods of trading.
So even I you have years upon years of experience you might still find this insightful,
travlr
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mistry
11 posts
msg #31372
- Ignore mistry |
3/11/2004 2:11:00 AM
I am interested in a defintion of buying and selling pressure using the concepts of Volume and Price, supply and demand.
What parameters or calulation would accurately reflect buying and selling pressure using volume and OHLC information ?
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travlr
80 posts
msg #31400
- Ignore travlr |
3/13/2004 12:53:07 PM
mistry,
Good question.
If you are familiar with and/or did read the pdf attachments in the journal I referred to above, you'd see how the combination of volume and candle stick study have a pronounced impact on the probability of price direction.
Several indicators such as money flow, on balance volume, balance of power, and intraday intensity are volume weighted indicators in relation to price movement. I am still familiarizing myself as to their usefulness. What surprises me is that most of the "popular" momentum and volatility indicators don't have a volume weighting incorporated. I think it would be interesting to see how incorporating volume into say stochastics,RSI,ROC, calculations would affect their capabilites. I'd be intrerested to here others' comments.
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EWZuber
1,373 posts
msg #31402
- Ignore EWZuber |
3/14/2004 3:06:00 AM
travlr
Excellent idea.
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Skeksis
36 posts
msg #31403
- Ignore Skeksis |
3/14/2004 4:12:21 AM
I did a little experimenting with the idea of a volume weighted stochastic after I read the posts on this thread and got a bit interested in the idea. I took on balance volume values and applied a version of the basic stochastic fast %k formula to them, in order to get a percentage that was an apples to apples comparison of the stochastic fast %k. ((today's OBV close - lowest OBV in %k periods)/(highest OBV in %k periods - lowest OBV in %k periods))*100, where the %k period value I used was 5. I added that result to the stochastic fast %k value of the same day and divided by 2 to get an average. I used OBV because it considers up volume versus down volume as it's primary function. The results were not smoothed at all, and they will always plot between 0 and 100%. I plotted results for a span of time on INTC. The OBV Stochastic average was a bit more volatile than basic stochastic fast %k values, but I also noticed that the OBV-stochastic was usually divergent to the basic stochastic fast %k by a day or two before a "major" up or down trend. In other words, the OBV-stochastic seems to turn in favor of the upcoming trend before the regular stochastic does. However, for most people, this divergence may make little difference, as the divergence is not based on price action alone, and a very small decline or rise in price from one day to the next can skew results as the total volume for the day will be considered as positive or negative for OBV. It looks promising if one were inclined to program it to automatically calculate and plot as other developed indicators do. Any comments or suggestions are welcome.
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xplorer
257 posts
msg #31404
- Ignore xplorer |
3/14/2004 11:37:03 AM
.... BigCharts.com has a nice charting feature that supports this assocition of price and volume.
Take a look at the INTERACTIVE charts, one of the pull downs (UPPER INDICATORS), you can select VOLUME BY PRICE..... it helps to see the support and resistance levels.
SKEKSIS ... you SF screen sounds awesome !
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mika
131 posts
msg #31408
- Ignore mika |
3/14/2004 10:40:27 PM
Anyone care to summarize them pdf rules? :P
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defau
24 posts
msg #43495
- Ignore defau |
5/5/2006 11:31:05 AM
Has anyone developed a scan for this?
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BFreshour
139 posts
msg #43504
- Ignore BFreshour
modified |
5/5/2006 3:28:05 PM
Here's what Skesis described plotted. Not sure how to use it. ;)
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