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UrmaBlume

Measuring Pressure

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We believe that price is motivated/propelled by an imbalance in buying or selling.

 

Further we operate on the basis that it is surges in buying and selling volumes that that create the pressure that drives price throughout the trading session.

 

Even further we believe that this pressure is evident well before moves in price and would like to demonstrate that via Friday's trade.

 

In all of the screen shots below you will see buying pressure represented by blue histograms and selling pressure is red. Further you will see that the peak of the pressure occurs well before the peak or valley in price.

 

We don't use averages, candles, profiles, pivots, rsi, stochastics or any other price based indicators - we use our skills, experience and technologies to try and measure buying and selling in the market place. After all - what could be more fundamental to the motivation of price than buying and selling pressure?

 

If you can measure the pressure, you can predict the move.

 

In this first shot you can see that blue, buying pressure, peaked at around 0610, 20 mins before the open and that within 30 minutes after the open price was up 10 Points.

 

 

 

pressure1.jpg

 

 

An hour after the open a peak in selling pressure foretold a 6 point drop in price:

 

pressure2.jpg

 

An hour later a peak in buying pressure propelled price upward and lasted for about 40 minutes before selling pressure manifested itself:

 

pressure3.jpg

 

Of course the best move of the day started a little over an hour before the close. The move was well foretold by buying pressure and was good for almost 20 points valley to peak.

 

pressure4.jpg

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Interesting you measuring with respect to time to determine pressure. Makes some sense to me too.

 

Blowfish - this is still about volume - it is done on a 1 minute chart so that it can be normailzed for time of day.

 

On several occasions, almost 30 years ago, I spent time at Peter Steidlmayer's ranch near Butte Meadows, Ca. He was my first real mentor when it came to learning the underlying dynamics of what motivates price.

 

In those days there was no online real-time volume data from the futures pit so Peter used time at price to approximate volume and that is the basis of the market profile. Tim Mathers, owner/founder of CQG, was there and that is how CQG got its fame by being first to offer online profiles.

 

While Peter is a great theoretical thinker, he is a huge Luddite when it comes to technology and change. I talked to Peter on Thursday and he is still clinging to his old thoughts about time when it is buying and selling volumes that motivate price, not the passage of time.

 

Today we not only have online volume data but also many intelligent methods and technologies to process that data.

 

What you see in the above charts is what we call our measure of percentage of commitment to the market by longer term (beyond the session) commercial traders, normalized for time of day and presented in several time frames. This indicator is displayed in a different format on our Market Heads Up Display - HUD.

 

Today I am 65 years old and what keeps me feeling young is learning by working/mentoring with a small set of folks that have a technical orientation and are younger, smarter and faster than I am.

 

cheers

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On several occasions, almost 30 years ago, I spent time at Peter Steidlmayer's ranch near Butte Meadows, Ca. He was my first real mentor when it came to learning the underlying dynamics of what motivates price.

 

In those days there was no online real-time volume data from the futures pit so Peter used time at price to approximate volume and that is the basis of the market profile. Tim Mathers, owner/founder of CQG, was there and that is how CQG got its fame by being first to offer online profiles.

 

While Peter is a great theoretical thinker, he is a huge Luddite when it comes to technology and change. I talked to Peter on Thursday and he is still clinging to his old thoughts about time when it is buying and selling volumes that motivate price, not the passage of time.

 

Great history lesson. Keep it coming, both your trading methodoligy and these stories.

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hi

thanks for share it but i'm not understand how you measure pressure :(

i read several time but nothing :(

 

Having read a lot of UB's posts and being avid student of PV I am almost certain he is using transactional volume. The more volume the more pressure. UB's posts are quite thought provoking and helpful IMO.

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Having read a lot of UB's posts and being avid student of PV I am almost certain he is using transactional volume. The more volume the more pressure. UB's posts are quite thought provoking and helpful IMO.

 

thanks , could you post me some links about PV so i can study it :missy:

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thanks , could you post me some links about PV so i can study it :missy:

 

It's what dominates TL. Look up VSA, Wyckoff, etc. They are all price and volume based.

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It's what dominates TL. Look up VSA, Wyckoff, etc. They are all price and volume based.

 

There is a huge difference between the volume that is discussed in VSA & Wycokoff and the Balance of Trade which is the basis of this discussion on pressure and the basis for most of my posts.

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There is a huge difference between the volume that is discussed in VSA & Wycokoff and the Balance of Trade which is the basis of this discussion on pressure and the basis for most of my posts.

 

UB, I am clear on that. That's why I have been studying the information you have posted. Thanks for sharing and pushing the use of volume to new levels.

 

I was responding the the OP request for information on price and volume.

 

Good trading to all.

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It's what dominates TL. Look up VSA, Wyckoff, etc. They are all price and volume based.

 

hi

i wrote bad ,I meant how UB measure pressure , i search his threads and read

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Hi, i found that your trading approach is great, but you haven't mentioned anything about this methodology. Could you share, please, where we could read about approach you are using and what indicators are you using? Thank you very much!

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Hi, i found that your trading approach is great, but you haven't mentioned anything about this methodology. Could you share, please, where we could read about approach you are using and what indicators are you using? Thank you very much!

 

Thank you very much for the very kind words.

 

We are a small private trading and trade decision support technology development firm. The indicators posted in this and other posts represent the part of our work that we are willing to show and are used for training our in-house traders.

 

Naturally much of our work and all of our methods are propietary. These posts are made in an effort to stimulate thought and technical explorations beyond candles, rsi, stochastics, profiles, pivots, vsa, wyckoff and other such buschwa.

 

The concepts and indicators we post are our own original work and are not for sale or lease or trial. You can read a bit about our concept basis and mission statement at Trade Point Technologies

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Ok, but if have posted your concept here maybe you could give us some hints about this method. I don't think it could impact your trading results. It's very interesting to know how do you calculate the order flow? I'm trading by volume only and your concept is very interesting for me. Are you using bid-ask calculations for the indicators, or maybe the number of contracts flow/minute, 10 seconds, etc, or maybe you filter from the tape last size > than 10-20, or maybe you filter same bid/ask size from the tape per minute ( for example then funds try manipulate price you could often see bid or ask like this bid: 7-8-7-8-7-8-7-8-7-8-7-8-7-8-7-8 and etc. ). I have shared main concepts of analyzing volume and tape reading, so maybe and you could share some secrets of your indicators? Anyway, we do not ask to share the indicators!? You wanted to discuss this so, let's discuss it!

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I have shared main concepts of analyzing volume and tape reading, so maybe and you could share some secrets of your indicators?

 

Research my previous posts and you should be able to answer most of your questions. But with that in mind - Where did you share anything? You have only made 2 posts to this board and both of them on this thread asking for something.

 

My group is always looking to collaborate with creative thinkers - If you think you have a concept that has value in short term trading and that is your original work and not already known by everybody post it or PM me and we might talk about further collaboration.

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No, i don't ask for the advice and i simple do not like to post something on the boards so that's why it's mine 2 post. But my trading expirience of 8+ years is worth something. Surely, i have some succesful concept, but your last posts isn't infomative at all. And as i have looked over all of your posts - everywhere same images, no concrete answers to any of traders and a lot of theory, no advices. So why are you posting, if you are not even ready to help with a simple advice? I wrote what i'm looking for when i analyze the volume ( last trade big sizes, contracts traded/second, same lots ) and what about you...?

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My group is always looking to collaborate with creative thinkers - If you think you have a concept that has value in short term trading and that is your original work and not already known by everybody post it or PM me and we might talk about further collaboration.

 

I might take you up on this. I have come up with a few things you will not have seen anywhere.

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UB,

 

I have read all of your posts and I have seen no discussion of how dark pools affect your method? I would think that they do or an iceberg for that much?

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UB,

 

I have read all of your posts and I have seen no discussion of how dark pools affect your method? I would think that they do or an iceberg for that much?

 

Some decades ago I worked at one of only 2 serious firms that did equity trades away from the NYSE. As a broker there I was able to provide a bid or asked to my clients in any NYSE or London stock 24/7, unheard of in those days. At that time we did about 5% of US equity trading off the floor - so it was all "dark pool" trade but was still "printed" on the consolidated tape, albeit sometimes a bit late.

 

Today we look to the behavior of certain derrivatives to reflect this "dark pool" trade. Also worthy of note is that a significant amount of this trade happens outside normal day-session hours. Still another reason to pay attention to the overnight session in such instruments as ES.

 

cheers

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Some decades ago I worked at one of only 2 serious firms that did equity trades away from the NYSE. As a broker there I was able to provide a bid or asked to my clients in any NYSE or London stock 24/7, unheard of in those days. At that time we did about 5% of US equity trading off the floor - so it was all "dark pool" trade but was still "printed" on the consolidated tape, albeit sometimes a bit late.

 

Today we look to the behavior of certain derrivatives to reflect this "dark pool" trade. Also worthy of note is that a significant amount of this trade happens outside normal day-session hours. Still another reason to pay attention to the overnight session in such instruments as ES.

 

cheers

 

Thanks for taking the time to share your experience and your knowledge.

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UrmaBlum,

 

Great intellectual stimulation you provided. Here are some of my observations and some thoughts:

 

1. Since you are from Pete Steidmeyer era, I am interesting in knowing about LDB (Liquidity Data Bank). it is my understanding that it was "pulled off" by the exchange due to demand from institutionals claiming that the retail trader can "decipher" smart money from dumb money? Was this the reason and was a retial trader able to distinguish and categorize volume (I think it was called CTI1, CTI2 etc describing each participant in the market and the data was provided EOD or every 3 hours?)

 

2. Your "Derivatives" reference caught my attention as I try to look @ the markets from a holistic point of view. One of the things I heard was that in recent years the majority of the OPTIONS volume moved to ETF's.

There was also a software called VANTAGEPOINT which uses neural networks for "forecasting" market movements- have u has a chance to play with it?

 

3. Some of the stuff I have seen on your website reminds me of: Futures Scalping Home Page

 

I recently read an article by a Fidelity exec that said that DarkPool's transactional size was increased by 10% each year the last 2-3 years - will be interesting to see how this will effect the exchanges - maybe this is a new paradigm shift. The only thing I failed to grasp is that these markets are NOT quote based..so I'm not sure how they provide liquidity.

 

Sagi

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