Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

daedalus

Daytrading Futures Volume Analysis Questions

Recommended Posts

I had a few, ok, well a LOT of questions regarding volume. I just started using it in my trade setups a few days ago and it has revolutionized my entries and exits. However, I understand that I am still missing out on a LOT of information held within the volume histogram and I had some questions that maybe someone could explain to me.

 

I am interpreting price action and volume a certain way but I don't know if its the RIGHT way. ANY HELP WOULD BE APPRECIATED.

 

Charts are from yesterday and today's price action in the NQ on a 377 Tick chart. Using the Tick Delta indicator from the indicator forums. Its is merely the same as the stock TS volume indicator except it splits out the volume into buyer/seller dominated bars (thats the part i'm using effectively now). But i think the part i'm missing is in the amount of volume coming into various moves and the possible divergence patterns that are occurring right under my nose.

 

I'm a really big visual learner so i've tried to describe everything with charts that have key points labeled with numbers so hopefully we can explain the same inflection points on the examples clearly.

 

So lets get started!

 

x5bddz.jpg

 

I guess one of my biggest questions is how to accurately measure for divergence in the market. So i've tried to pick out inflections with obvious new swing high/lows in the market keyed up with the corresponding volume on those candles. Examples of this would be on the chart:

 

1-2, higher low backed with higher high in volume, thus, move is backed and higher highs are expected?

 

3-4, higher low with divergence lower low in corresponding volume, thus divergent behavior and new highs not expected. potential reversal?

 

8-9, lower low but with divergent higher high in volume, thus potential reversal?

 

Is there any logic wrong here? Am i looking at the right spots to measure volume?

 

Basically, should i be looking at volume in uptrends measured at the new highs or at the swing lows, and vise versa in downtrends?

 

Price action from today:

 

o53v9h.jpg

 

So again, should i be looking at volume when the move is making a higher high (the blue dots on the 4-5 move) or at the green dots on that same move? Now that i think about it really is coming down to one big question of where to measure the volume from. Because thats what I need to know to accurately interpret the volume at any level and right now i'm just kind of guessing off of what i know of price action.

 

dmeftd.jpg

 

so in the 3-5(not labeled but the next blue dot after 3) is a lower low in volume on a lower low in the price ok? Or is the real information on the 2-4 upswing that is divergent in volume indicating to stop buying after the 4 point?

 

I'm sorry if this is confusing or not clear. I appreciate all of your responses!!!

Share this post


Link to post
Share on other sites

Have you tried using a smoothed tick delta indicator? It essentially changes it to a log scale and smothes it with an ema. You should be able to find one knocking around here somewhere. Let me know if you can't. It really shows up divergence a bit more clearly (though I should say it's not something I use but I am tempted to as it gives a pretty nice clear read).

 

There is a site that has a few videos on using a similar indicator for divergences but I am loath to list it here as they sell a version of the free one!! That really irritates me!

Share this post


Link to post
Share on other sites
Guest forsearch

Here's a video on how a vendor uses "delta divergence" that I found on Google.

 

You can find the "free" version of this indicator elsewhere on TL.

 

-fs

Share this post


Link to post
Share on other sites

Thanks for the posts guys. I am aware of various vendors that do the delta divergence stuff, i understand that for the most part. The reason i'm showing the delta divergence indicator is simply that it is the same as the volume histogram, so the same kind of basic volume analysis should be possible.

 

256h9bp.jpg

Share this post


Link to post
Share on other sites

I should also mention that the youtube video mentioned refrences a different indicator than whats on my charts. The Tick Delta indicator is just splitting each bar into buyer/seller dominated on each volume bar. Delta Divergence (the youtube and TTM webinar i posted) is an entirely different indicator and idea than whats on my charts.

Share this post


Link to post
Share on other sites
Guest forsearch
I should also mention that the youtube video mentioned refrences a different indicator than whats on my charts. The Tick Delta indicator is just splitting each bar into buyer/seller dominated on each volume bar. Delta Divergence (the youtube and TTM webinar i posted) is an entirely different indicator and idea than whats on my charts.

 

That's nice to know .:missy:

 

I'm actually surprised that TTM hasn't snapped up the Tick Delta indicator and marketed it yet as their own indicator.

 

Investor R/T has a similar indicator called Volume Breakdown - more info, and a couple of videos here:

 

http://www.linnsoft.com/tour/techind/vb.htm

 

VB_Chart.jpg

Share this post


Link to post
Share on other sites

I wasn't thinking of the hucksters at TTM I was thinking of the huckster here. :) Actually some of the stuff that Malcolm is doing seems pretty sensible. But charging for versions of public domain indicators arrrrrrrggggggghhhhhhh.

 

http://www.futures-day-trader.com/public/department41.cfm

 

http://www.futures-day-trader.com/public/department2.cfm

 

Lots of videos showing how to use the tool to detect divergence.

 

Try smoothing the delta as I mentioned I think you will like the result. It makes divergence much clearer (to me at least).

Share this post


Link to post
Share on other sites

Yea i've watched malcom's stuff before, thanks for that.

 

I think the Tick Delta has confused everyone on my actual question. Lets pretend that the tick delta indicator in my examples were just a normal volume histogram (thats what i'm using it as in these examples) how should I be interpreting the various divergence patterns?

 

Where should I be measuring volume from? Any ideas guys? Because in my examples i'm not really using it in a normal VSA move because i've been looking more on a macro scale of swing to swing rather than bar to bar, which is why i'm curious if i'm looking at the divergence patterns correctly or if i'm completly off base.

 

Thanks again for everyone's responses!

Share this post


Link to post
Share on other sites
Guest forsearch
I wasn't thinking of the hucksters at TTM I was thinking of the huckster here. :) Actually some of the stuff that Malcolm is doing seems pretty sensible. But charging for versions of public domain indicators arrrrrrrggggggghhhhhhh.

 

Yeah, that's what TTM did first. This guy is just copying what TTM proved was a successful business model. He's even using the same "membergate" website setup as TTM did.

 

But don't believe me. Listen to the webinar I found on Google where John Carter acknowledges in his own words how much money TTM really makes.

 

http://tinyurl.com/5jwpod

 

-fs

Share this post


Link to post
Share on other sites
Yeah, that's what TTM did first. This guy is just copying what TTM proved was a successful business model. He's even using the same "membergate" website setup as TTM did.

 

But don't believe me. Listen to the webinar I found on Google where John Carter acknowledges in his own words how much money TTM really makes.

 

http://tinyurl.com/5jwpod

 

-fs

 

Holy god... i knew they made money but 989k in sales of FREE indicators and 1.2million in sales for subscriptions... that is ridiculous!

 

Now back to volume analysis! ;)

Share this post


Link to post
Share on other sites

TTM - Wow.

 

I think you are doing it 'correctly' (though of course whatever works for you). Peak to peak and trough to trough on the price chart is the 'normal' way of looking at divergences.

Share this post


Link to post
Share on other sites
Guest forsearch

Divergence is like the Supreme Court definition of porn: you know it when you see it.

 

That being said, here's an interesting article by Martin Pring on Reverse Divergence and Momentum.

 

And another by Barbara Starr on Hidden Divergence.

 

These should help provide additional context to determining and trading divergences when you see them.

Edited by forsearch

Share this post


Link to post
Share on other sites
But sometimes the peak to peak will show a divergence whereas the trough to trough won't and vise versa. Is there a "normal" way that is preferred by most?

 

Ive honestly never found any utility in the delta volume indicators. The only thing that seemed to be pretty usefull IMO is Market Delta with the plot set to delta bars. They are basically like constant volume bars but a new bar is only plotted when the bid/ask has transacted to one side by a number you set. One good way to use that is if your in a winning trade just hold until the move has reached its top but you have the opposite as far as delta goes. Its a good bet that those who were lifting or sinking the bid or offer of the move have played out their hand and some profit taking has come in. Its too inexact IMO to use for countertrend reversal trades though.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Hello citizens of the U.S. The hundred year trade war has leaked over into a trading war. Your equity holdings are under attack by huge sovereign funds shorting relentlessly... running basically the opposite of  PPT operations.  As an American you are blessed to be totally responsible for your own assets - the govt won’t and can’t take care of you, your lame ass whuss ‘retail’ fund managers go catatonic  and can't / won’t help you, etc etc.... If you’re going to hold your positions, it’s on you to hedge your holdings.   Don’t blame Trump, don’t blame the system, don’t even blame the ‘enemies’ - ie don’t blame period.  Just occupy the freedom and responsibility you have and act.  The only mistake ‘Trump’ made so far was not to warn you more explicitly and remind you of your options to hedge weeks ago.   FWIW when Trump got elected... I also failed to explicitly remind you... just sayin’
    • Date: 7th April 2025.   Asian Markets Plunge as US-China Trade War Escalates; Wall Street Futures Signal Further Turmoil.   Global financial markets extended last week’s massive sell-off as tensions between the US and its major trading partners deepened, rattling investors and prompting sharp declines across equities, commodities, and currencies. The fallout from President Trump’s sweeping new tariff measures continued to spread, raising fears of a full-blown trade war and economic recession.   Asian stock markets plunged on Monday, extending a global market rout fueled by rising tensions between the US and China. The latest wave of aggressive tariffs and retaliatory measures has unnerved investors worldwide, triggering sharp sell-offs across the Asia-Pacific region.   Asian equities led the global rout on Monday, with dramatic losses seen across the region. Japan’s Nikkei 225 index tumbled more than 8% shortly after the open, while the broader Topix fell over 6.5%, recovering only slightly from steeper losses. In mainland China, the Shanghai Composite sank 6.7%, and the blue-chip CSI300 dropped 7.5% as markets reopened following a public holiday. Hong Kong’s Hang Seng Index opened more than 9% lower, reflecting deep concerns about escalating trade tensions.           South Korea’s Kospi dropped 4.8%, triggering a circuit breaker designed to curb panic selling. Taiwan’s Taiex index collapsed by nearly 10%, with major tech exporters like TSMC and Foxconn hitting circuit breaker limits after each fell close to 10%. Meanwhile, Australia’s ASX 200 shed as much as 6.3%, and New Zealand’s NZX 50 lost over 3.5%.   Despite the escalation, Beijing has adopted a measured tone. Chinese officials urged investors not to panic and assured markets that the country has the tools to mitigate economic shocks. At the same time, they left the door open for renewed trade talks, though no specific timeline has been set.   US Stock Futures Plunge Ahead of Monday Open   US stock futures pointed to another brutal day on Wall Street. Futures tied to the S&P 500 dropped over 3%, Nasdaq futures sank 4%, and Dow Jones futures lost 2.5%—equivalent to nearly 1,000 points. The Nasdaq Composite officially entered a bear market on Friday, down more than 20% from its recent highs, while the S&P 500 is nearing bear territory. The Dow closed last week in correction. Oil prices followed suit, with WTI crude dropping over 4% to $59.49 per barrel—its lowest since April 2021.   Wall Street closed last week in disarray, erasing more than $5 trillion in value amid fears of an all-out trade war. The Nasdaq Composite officially entered a bear market on Friday, sinking more than 20% from its recent peak. The S&P 500 is approaching bear territory, and the Dow Jones Industrial Average has slipped firmly into correction territory.   German Banks Hit Hard Amid Escalating Trade Tensions   German banking stocks were among the worst hit in Europe. Shares of Commerzbank and Deutsche Bank plunged between 9.5% and 10.3% during early Frankfurt trading, compounding Friday’s steep losses. Fears over a global trade war and looming recession are severely impacting the financial sector, particularly export-driven economies like Germany.   Eurozone Growth at Risk   Eurozone officials are bracing for economic fallout, with Greek central bank governor Yannis Stournaras warning that Trump’s tariff policy could reduce eurozone GDP by up to 1%. The EU is preparing retaliatory tariffs on $28 billion worth of American goods—ranging from steel and aluminium to consumer products like dental floss and luxury jewellery.   Starting Wednesday, the US is expected to impose 25% tariffs on key EU exports, with Brussels ready to respond with its own 20% levies on nearly all remaining American imports.   UK Faces £22 Billion Economic Blow   In the UK, fresh research from KPMG revealed that the British economy could shrink by £21.6 billion by 2027 due to US-imposed tariffs. The analysis points to a 0.8% dip in economic output over the next two years, undermining Chancellor Rachel Reeves’ growth agenda. The report also warned of additional fiscal pressure that may lead to future tax increases and public spending cuts.   Wall Street Braces for Recession   Goldman Sachs revised its US recession probability to 45% within the next year, citing tighter financial conditions and rising policy uncertainty. This marks a sharp jump from the 35% risk estimated just last month—and more than double January’s 20% projection. J.P. Morgan issued a bleaker outlook, now forecasting a 60% chance of recession both in the US and globally.   Global Leaders Respond as Trade Tensions Deepen   The dramatic market sell-off was triggered by China’s sweeping retaliation to a new round of US tariffs, which included a 34% levy on all American imports. Beijing’s state-run People’s Daily released a defiant statement, asserting that China has the tools and resilience to withstand economic pressure from Washington. ‘We’ve built up experience after years of trade conflict and are prepared with a full arsenal of countermeasures,’ it stated.   Around the world, policymakers are responding to the growing threat of a trade-led economic slowdown. Japanese Prime Minister Shigeru Ishiba announced plans to appeal directly to Washington and push for tariff relief, following the US administration’s decision to impose a blanket 24% tariff on Japanese imports. He aims to visit the US soon to present Japan’s case as a fair trade partner.   In Taiwan, President Lai Ching-te said his administration would work closely with Washington to remove trade barriers and increase purchases of American goods in an effort to reduce the bilateral trade deficit. The island's defence ministry has also submitted a new list of US military procurements to highlight its strategic partnership.   Economists and strategists are warning of deeper economic consequences. Ronald Temple, chief market strategist at Lazard, said the scale and speed of these tariffs could result in far more severe damage than previously anticipated. ‘This isn’t just a bilateral conflict anymore — more countries are likely to respond in the coming weeks,’ he noted.   Analysts at Barclays cautioned that smaller Asian economies, such as Singapore and South Korea, may face challenges in negotiating with Washington and are already adjusting their economic growth forecasts downward in response to the unfolding trade crisis.           Oil Prices Sink on Demand Concerns   Crude oil continued its sharp slide on Monday, driven by recession fears and weakened global demand. Brent fell 3.9% to $63.04 a barrel, while WTI plunged over 4% to $59.49—both benchmarks marking weekly losses exceeding 10%. Analysts say inflationary pressures and slowing economic activity may drag demand down, even though energy imports were excluded from the latest round of tariffs.   Vandana Hari of Vanda Insights noted, ‘The market is struggling to find a bottom. Until there’s a clear signal from Trump that calms recession fears, crude prices will remain under pressure.’   OPEC+ Adds Further Pressure with Output Hike   Bearish sentiment intensified after OPEC+ announced it would boost production by 411,000 barrels per day in May, far surpassing the expected 135,000 bpd. The alliance called on overproducing nations to submit compensation plans by April 15. Analysts fear this surprise move could undo years of supply discipline and weigh further on already fragile oil markets.   Global political risks also flared over the weekend. Iran rejected US proposals for direct nuclear negotiations and warned of potential military action. Meanwhile, Russia claimed fresh territorial gains in Ukraine’s Sumy region and ramped up attacks on surrounding areas—further darkening the outlook for markets.   Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Andria Pichidi HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • AMZN Amazon stock watch, good buying (+313%) toi hold onto the 173.32 support area at https://stockconsultant.com/?AMZN
    • META stock watch, local support and resistance areas at 507.48, 557.84 at https://stockconsultant.com/?META
    • TMUS T-Mobile stock, watch for a top of range breakout at https://stockconsultant.com/?TMUS
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.