The Price / Volume Relationship

[frenchfry 10]

Hi cnms2,

 

thank you for posting. But.... what are you trying to say?

 

Thanks

[cnms2 10]

Hi cnms2,

 

thank you for posting. But.... what are you trying to say?

 

Thanks

I intended to draw a picture to bring light on your question #8. Note the ve, gaussians that define the events, the fractal integrity.

[cnms2 10]

Jun 2013 – Rollover is Thursday, June 13th , 2013 and Settlement date is Friday, June 21st, 2013

Sep 2013 – Rollover is Thursday, September 12th, 2013 and Settlement date is Friday, September 20th, 2013

Dec 2013 – Rollover is Thursday, December 12th, 2013 and Settlement date is Friday, December 20th, 2013

[Ammeo 10]

Volume is an indicator of price volatility....i have always noticed big spikes in price after the volume starts to pour in a a couple of days before the volatility starts..it mainly has to do with earnings reports and acquisitions/mergers aswell sometimes..

[ntrader 10]

If the number of shares traded is high and the prices are also moving higher- that’s a positive signal. On the other hand, If the number of shares traded is high and the prices are coming down that’s a negative signal.

[cnms2 10]

ping .

[spitzsicc 10]

first time in this forum and i actually read the first 100 posts and then decided to give up on the thread lol

 

i love how spyder has the insight or can see what the market tells him or provides him and is up to us to notice it.

 

I some what understand and have tried following the tutotials and even if i some what failed

i can see how volume relates to price or more of how price relates to volume .

 

any how i will use volume more often now and use the experience i learned in this thread to better help my view of the market and what it tries to tell me xD

[vienna 10]

So I am looking into the Equities method... trying to leverage my chart reading skills (improved through the intraday futures stuff) for a swing trading environment, for several reasons of my own.

I found that it appears difficult to find anybody who actually trades the equities method for a living and posts on a forum- I won't speculate on the reasons here why that is the case.

 

But- if somebody reads this and does trade the Equities successfully, perhaps they can advise:

 

First, the scans. I went through the Trade Navigator scans, they seem to still work OK :I isolated each criteria and tested it seperatly (by eyeballing....they seem to do the job), but for example the current scan comes up empty/ see attached image

 

 

 

Does anybody know why that would be the case/have experience in this? Is that common?

 

Also, the scans do not include two of the original criteria (RS>80 and EPS >90)...anybody knows why?

 

 

Thanks!

Edited July 1, 2013 by vienna

[vienna 10]

The second question I have is concerning de-gapping of daily charts. I know there is something of a fetish about de-gapped charts with Hershey acolytes.... "gaps do not exist etc etc"...de-gapped charts seem to work fine in intraday futures charts, seamlessly stitching the days together.

 

But it appears daily charts are a different animal: have a look at 2 attached charts.

this is the same stock! the second chart is de-gapped, that's the only difference! Both are daily charts.

 

Now, somewhere in the ET thread there is a post where the first person posted a degap indicator (for NT I think)- sometime in 2008, AFTER the equities thread. And then Spyder got TN to de-gap as well when he published his Indicators, but at that point he was not even trading equities anymore.

 

So- is it recommended to de-gap daily stock charts as well?

Looking at the charts above, if you have stock that gaps often, this can give a completely different picture, with a completely different trend.

 

I find it hard to believe that a massive 4 year downtrend (which is what the de-gapped chart shows) should somehow be hidden within a chart where price actually improved 40% over the same 4 years...? Does not seem to make any sense...

 

Anybody has some experience with this?

 

Thanks!

[cnms2 10]

You're on to something: each day reverse short at market opening, and reverse long at market closing! Amateurs control the opening hour, professionals control the closing hour.

[vienna 10]

You're on to something: each day reverse short at market opening, and reverse long at market closing! Amateurs control the opening hour, professionals control the closing hour.

 

Thank you, but I am not interested in daytrading equities.

My question was: Do you know anybody who is trading the equities method successfully? And if so, do they de-gap the daily charts?

[frenchfry 10]

... do they de-gap the daily charts?

There is a "Boolean Algebra inside" thread at ET where I tried to figure out how PVT works. I don't remember to have seen the requirement to de-gap the daily charts when you trade the PVT way. Neither in that thread nor in other documents or threads I read about it. The selection of stocks, their scoring/ranking and DU, FRV, Peak volume numbers are more important.

 

De-gapping seems to be more important if you do SCT (especially the way Jack does it nowadays) where you need to identify price formations which tell you if you are allowed to use volume or not.

 

That's two different ways of trading but I think you could apply SCT to stock trading as well in which case you definitively need to degap.

[vienna 10]

That's two different ways of trading but I think you could apply SCT to stock trading as well in which case you definitively need to degap.

 

Thats what I had thought as well, thanks. But it appears that it completely changes the picture of the move: for example, one of the highest vol bars changes from black to red etc. For this equity, the degapped chart shows a consistent down-trend. Had you traded it like this, you would probably have gotten clobbered.

 

Independent of that: Did you ever get the scans to work? I have heard from a couple of people by now who had the same result- no stocks- after scanning...

 

Thanks!

[frenchfry 10]

Thats what I had thought as well, thanks. But it appears that it completely changes the picture of the move: for example, one of the highest vol bars changes from black to red etc. For this equity, the degapped chart shows a consistent down-trend. Had you traded it like this, you would probably have gotten clobbered.

 

Independent of that: Did you ever get the scans to work? I have heard from a couple of people by now who had the same result- no stocks- after scanning...

 

Thanks!

It's a pity that there is not more feedback from those who know more than me (which is easy).

 

I didn't think it through what the best way (algorithm) would be to degap a chart. For the ES you should have seen some charts posted here and at ET where you don't have the extreme which you see on daily bars for stocks. Looks very useful for SCT.

 

I can imagine that if your algorithm first adjusts the previous bar and then with every new bar it adds that bar to the previous bar to the adjusted bar and now moves those bars as a group up or down that you end up with what you show. I hope you understand what I mean. Tams/Tums would maybe have an idea what a good algorithm could be.

 

But it probably doesn't matter if you get something completely different than what a normal chart would show you. The reason why you want to degap is because you want to identify the bar formations correctly to know if and when to use volume.

 

Regarding Spyder's TN scan. Did Spyder make the password for the library public?

 

I noticed that behavior, too. No results for several days. It is not that it doesn't work. It is just that the DU filter is too strict. That's not true either, because at the end Spyder knew what he was doing. His filter only shows stocks which are in DU whereas Jack does that later. Jack filters down the universe to a manageable hotlist via those filter criteria and ranking and then uses DU, FRV and Peak values for those stocks in the hotlist on the trading day in order to get in or stay out. At least that's the way I understand it.

 

Hopefully you will get some more qualified feedback from those who actually use PVT on a daily basis.

[vienna 10]

It's a pity that there is not more feedback from those who know more than me (which is easy).

 

 

 

Hopefully you will get some more qualified feedback from those who actually use PVT on a daily basis.

 

Providing those who actually use PVT actually exist

 

Thanks! Do you know why the RS and EPS requirements are not in the scans? Did Spyder drop them?

[cnms2 10]

Providing those who actually use PVT actually exist

 

Thanks! Do you know why the RS and EPS requirements are not in the scans? Did Spyder drop them?

PVT makes sense only for beginners, to learn the basics of price volume on a long biased trade vehicle. Mostly everybody moved to SCT. SCT on a future vehicle makes much more money, and offers more opportunities and control in all types of markets.

 

Check spydertrader's Equity Journals, where he documented his PVT learning process.

[Scooty 10]

Do you know why the RS and EPS requirements are not in the scans? Did Spyder drop them?

 

Does TN platform provide its own EPS and RS ranking? Just saying.

[vienna 10]

PVT makes sense only for beginners, to learn the basics of price volume on a long biased trade vehicle. Mostly everybody moved to SCT. SCT on a future vehicle makes much more money, and offers more opportunities and control in all types of markets.

 

Check spydertrader's Equity Journals, where he documented his PVT learning process.

 

*Sigh*

Again: Thank you for responding, but I was not asking for your advice on if it was a good idea to trade equities or not. I asked some specifics about them, in the case you knew somebody who traded them profitably....it appears that you do not, which is an answer as well...:-)

 

Instead, I find myself in a completely different discussion...in which case, glad to help:

You are (of course) wrong in "PVT makes sense only for beginners"...and "SCT on a future vehicle makes much more money". This might apply to you if you trade a $5000 account, otherwise please review this post from Jack: Forums - Questions How to Get Started Trading with Probabilities

"My best day was 17 points on 100K shares"... (in any case, I am glad that you have reached a level of profitability that exceeds these paltry numbers...:-)....)

 

To put it another way, Jack's stated Standard for excellence for PVT was 10% every 2 weeks, which comes to about 1000%/ year. I take that for 30 mins to 1 hr/day effort.

 

You're welcome. :-) Now back to my question....

[vienna 10]

Does TN platform provide its own EPS and RS ranking? Just saying.

 

It appears so...:

2013-07-02_2056 - vienna99's library

2013-07-02_2058 - vienna99's library

 

 

I was wondering why Spyder's filter did not include it in his indicator and if he had dropped it at one point.

[Scooty 10]

It appears so...:

2013-07-02_2056 - vienna99's library

2013-07-02_2058 - vienna99's library

 

I was wondering why Spyder's filter did not include it in his indicator and if he had dropped it at one point.

 

If I am correct, TN did not have EPS nor RS ranking in the old day.

If I were you, I would call TN to know for sure the ranking features are there.

 

Caveat: I am not a TN nor PVT user.

[cnms2 10]

*Sigh*

Again: Thank you for responding, but I was not asking for your advice on if it was a good idea to trade equities or not. I asked some specifics about them, in the case you knew somebody who traded them profitably....it appears that you do not, which is an answer as well...:-)

 

Instead, I find myself in a completely different discussion...in which case, glad to help:

You are (of course) wrong in "PVT makes sense only for beginners"...and "SCT on a future vehicle makes much more money". This might apply to you if you trade a $5000 account, otherwise please review this post from Jack: Forums - Questions How to Get Started Trading with Probabilities

"My best day was 17 points on 100K shares"... (in any case, I am glad that you have reached a level of profitability that exceeds these paltry numbers...:-)....)

 

To put it another way, Jack's stated Standard for excellence for PVT was 10% every 2 weeks, which comes to about 1000%/ year. I take that for 30 mins to 1 hr/day effort.

 

You're welcome. :-) Now back to my question....

In this case you are mistaken. Just 4 points per contract per day, on a 30 point margin account, means 13% daily. In a bear market you may have long periods when no stock passes the quality screen. Not all stock trades are profitable, while a 4 point a day can be easily accomplished by an advanced beginner who scalps the dominants. Regarding your daily degapping question, you didn't think it thoroughly before asking: if you hold overnight obviously the gap matters, because it affects you P&L.

My replies are meant to give my point of view not necessarily only for your benefit (it seems you don't agree with my opinions), but to keep others from getting confused or side tracked.

 

And one more: spydertrader documented how he traded successfully, while learning, the PVT. It doesn't matter if there is another who trades it successfully or not today. PVT is a good introduction to Hershey's methods, and many who struggle today with SCT are in that position because they skipped learning PVT. PVT teaches you the importance of the volume, and many fail because they focus too much, or only, on price.

 

The questions one asks tell a lot about his knowledge, and there is no shame to not know something and ask. There's a problem only when somebody doesn't know he doesn't know, and he misleads others. But we're all adults here, and we know that the anonymity of the internet may hide traps.

[tradingwizzard 10]

hey, thank you for your posts, quite interesting.

 

however, while I do agree with the price and volume relationship, I do have a question regarding volumes.

 

when trading the currency markets the volumes shown are only those of the respective broker, not the market as a whole, so the information is not really accurate, right?

[vienna 10]

There is a "Boolean Algebra inside" thread at ET where I tried to figure out how PVT works.

 

Frenchfry, please see PM

[vienna 10]

In this case you are mistaken......

The questions one asks tell a lot about his knowledge, and there is no shame to not know something and ask. There's a problem only when somebody doesn't know he doesn't know, and he misleads others.

 

I think you need more MADA.

 

Let me explain by referring to the way you responded to my questions:

 

1.MONITOR: Your thought process should have been:

What are the questions the poster (Vienna) is asking? The questions were about 1. Degapping Daily charts and 2. The Filters in TN. Had you monitored correctly it would have been clear to you that the questions were not any of the below ( Should you experience problems with this step, I suggest the next time you ask yourself "What wasn't that?"):

-Do I (CNMS) think trading Equities is a good idea for Vienna?

-Do I think one makes more money trading Equities or Futures?

-Do I think Equities are for beginners?

-Do I think Vienna is a beginner because he asks about Equities?

-Does your dog bite? or any other-equally irrelevant- questions.

 

Monitoring correctly would have saved you from answering questions that were not asked, and from statements such as "it does not matter if there is another one who trades it successfully or not today".

 

2. ANALYZE: Providing you had mastered the first step, you could now have proceeded to step 2:

Analyze "Am I qualified to answer the poster's question?"

The correct answer would have been: "No! I am not, since I do not know about Equities, I do not know about the Equities filters in TN, I do not trade Equities myself profitably (since I think they are for beginners and small children only) and I do not know anybody who does, so- logically- I am not qualified to answer the questions!".

Going through this thought process would have saved you from the embarassing statement that equities are for beginners only. Out of sheer kindness, and since people like you are convinced only by what their gurus tell them, let me help out with a PM that Jack sent me a long time ago (when he would still answer PM's on ET):

2013-07-03_1953 - vienna99's library

This was long before I even considered JHM, I gladly send you the whole PM for your education. The thought that Jack considers them "a must" might give even you pause perhaps...

 

3. DECIDE:

Had you mastered Step 1 and 2, the options would have been clear:

Since I (CNMS) understand the question and since I am not qualified to answer it, I either:

1. Do not respond. This would have saved you from the embarassing comment above, and from the equally inane statement that "if you hold overnight obviously the gap matters, because it affects you P&L". Duh. So it does when you de-gap 5 min bars, and you guys did not seem bothered a bit when that discussion went on...

2. Respond, and perhaps even learn something

"I (CNMS) do not know about equities trading, but might be interested to find out how or if it could be done profitably"

 

4. ACT:

The two options above seemed to be clear choices, but a that point you were already so far off that the only alternatives presenting themselves to you were:

1. Tell the poster (Vienna) that he shouldn't be trading equities

2. Tell the poster that you (CNMS) knew that he (Vienna) must be a beginner because he asks such stupid questions

3. Wax on wisely about protecting Newbies from misleading information and how you can tell the status of a trader at a glance, and, just generally make an ass of yourself.

 

 

You see- it isn't so hard!

 

Vienna

:)

[cnms2 10]

I think ...

Vienna

I posted mostly for others' benefit;