Australian (ASX) Stock Market Forum

Volume vs. SP patterns - help please

Joined
Aug 4, 2006
Posts
35
Reactions
0
hi everyone,

I know there is no wrong or right answer but can someone point me in the right direction to see if I have got some fundamentals right. assuming a company with no groundbreaking annoucemnts or funny business, is this correct???

HIGH VOLUME + no SP change = lots of Buyers + sellers=potential profit taking or lots of people willing to sell and therefore anything could happen

LOW VOLUME + no SP change = no one is really interested, so nothing.

LOW VOLUME + Slight SP Increase = possible accumulation going on, maybe a bit of good news expected or the prospects are looking good

LOW VOLUME + Slight SP Decrease = possible sell off going on, maybe a bit of bad news expected or the prospects aren't looking too good

HIGH VOLUME+ Slight SP Increase = ?????

HIGH VOLUME + Slight SP Decrease = ?????

HIGH VOLUME+ big SP Increase = MAJOR GOOD STUFF

HIGH VOLUME+ big SP Derease = MAJOR BAD STUFF

would the above be correct in gerenal???
 

Timmy

white swans need love too
Joined
Sep 30, 2007
Posts
3,457
Reactions
0
Re: Volume VS sp patterns help pls

Analysing volume with price moves is quite a lot more complex than that - basically changes in volume must be assessed in the context of price changes, but again its a bit more complex than that too. Sorry to go around in circles here.

A good starting point is to download and read this ebook, which at present is available at no charge from http://www.tradethetruth.com/downloads.html

Go to point 5 which reads:
5.) FREE e-book worth US$99. "MASTER the MARKETS" by Tom Williams. Click here
(PDF file takes about 5 minutes to download).

Also, there is a few discussions on various boards about analysing price with volume, like this one:
https://www.aussiestockforums.com/forums/showthread.php?t=8675

Read through this thread (above) and you will get an idea of what is involved in price/volume analysis.
 

tech/a

No Ordinary Duck
Joined
Oct 14, 2004
Posts
19,531
Reactions
3,901
Re: Volume vs SP patterns - help please

hi everyone,

I know there is no wrong or right answer but can someone point me in the right direction to see if I have got some fundamentals right. assuming a company with no groundbreaking annoucemnts or funny business, is this correct???

HIGH VOLUME + no SP change = lots of Buyers + sellers=potential profit taking or lots of people willing to sell and therefore anything could happen

Range must be considered and the position in the life of the stock must also be considered.Markets hate extremely high volume and wide range days.This is a sign of supply (Sellers) and is a weakness rather than a strength (The exact opposite to the general concensus). Range and volume of the preceeding bars confirm or negate the bar in question.

LOW VOLUME + no SP change = no one is really interested, so nothing.

Again depends on where it appears.If after a high volume up day then this would indicate that there was supply but supply has either been absobed or paused.The next bar would indicate clarity in the bar in question.

LOW VOLUME + Slight SP Increase = possible accumulation going on, maybe a bit of good news expected or the prospects are looking good

Accumulation is normally signalled by higher volume and small upward movement.Dependant on where this is occuring.Low volume and increase in price is normal buying no interest in sellers indicated.

LOW VOLUME + Slight SP Decrease = possible sell off going on, maybe a bit of bad news expected or the prospects aren't looking too good

Again must be taken in context look back for a few bars to see what the backgound is but would be normal correcting action.no interest in buyers indicated.

HIGH VOLUME+ Slight SP Increase = ?????

In context again!! This is seen generally as a strong buy sign.Sellers being being absorbed

HIGH VOLUME + Slight SP Decrease = ?????

Context!!
But generally seen as buyers being absorbed by sellers.This is generally seen as weakness.

HIGH VOLUME+ big SP Increase = MAJOR GOOD STUFF

The exact opposite generally.Watch the next few bars to confirm.

HIGH VOLUME+ big SP Derease = MAJOR BAD STUFF

The exact opposite generally.Watch the next few bars to confirm.

would the above be correct in gerenal???

In general no!

Tim has made some good reference reading.
Takes a great deal to get your head around but eventually can become second nature. This is a very important aspect of shorter term trading.
The above is true in ALL timeframes! From 1 min to 1 month.

CONTEXT is EVERYTHING.

Did some extensive commentary on 5 TLM charts here

https://www.aussiestockforums.com/forums/showthread.php?t=2814&page=52

Relating (or attempting to) the difference between this chart and Jupiters.
 
Joined
May 4, 2008
Posts
69
Reactions
0
Re: Volume VS sp patterns help pls

A good starting point is to download and read this ebook, which at present is available at no charge from http://www.tradethetruth.com/downloads.html

Hi Guys,

Sorry for the bump but I have a question regarding the ebook mentioned above.

The book talks about market-makers, but I understand that this is not applicable to Australian markets. I assume that the principles can be applied across any market where professional operators need to manage large positions and i've been able to find examples in Australian charts that are uncannily consistent with the examples in the book.

However the book does talk often about market-makers 'marking up' or 'testing for supply' and I wondered if I needed to be aware anything of when using VSA in an Australian context?

Thanks in advance (oh, and I dig this site BTW!).
 

Trembling Hand

Can be found on the bid
Joined
Jun 10, 2007
Posts
8,852
Reactions
191
Re: Volume vs SP patterns - help please

We do not have official market makers in stocks that is correct. We do have people that will play the same games. That is large holders wanting to offload stocks and large players trying to accumulate positions.
 

Timmy

white swans need love too
Joined
Sep 30, 2007
Posts
3,457
Reactions
0
Re: Volume vs SP patterns - help please

Hi Panacea

I think your assumption that the term 'market makers' in the context used in Master the Markets can be applied more broadly to markets where there are no market makers is correct and useful. In markets where there are no market makers (such as the ASX) the term can be read to encompass those participants who are very active in the instrument, and in large amounts. In Wyckoff-analysis terms such participants are referred to as the 'Composite Operator' or the 'Composite Man'.

As for any twists on VSA that you need to be aware of in the context of the ASX, I don't know of any (tech/a may have more insight into this).

Don't know how far into this stuff you are but the posts of tech/a (VSA) and motorway (Wyckoff) are outstandingly good sources of learning these techniques.

............ I see TH has got in before me, putting it much more succinctly!
 
Joined
May 4, 2008
Posts
69
Reactions
0
Re: Volume vs SP patterns - help please

Thanks Trembling Hand. I assume that the dynamics would be broadly similar here, at least in stocks where large holders are active.

Cheers.
 
Joined
May 4, 2008
Posts
69
Reactions
0
Re: Volume vs SP patterns - help please

Hi Timmy. I'm about half way through the book. It's fascinating stuff! I still have many gaps to fill in my learning but this book seems to offer some good insights into how the big end of town operates.
 
Joined
Nov 25, 2011
Posts
58
Reactions
0
Re: Volume vs SP patterns - help please

this e-book is not available anymore =[

does anyone still has the soft copy, please? =]
 

Wysiwyg

Everyone wants money
Joined
Aug 8, 2006
Posts
8,424
Reactions
262
Re: Volume vs SP patterns - help please

Hi Panacea

I think your assumption that the term 'market makers' in the context used in Master the Markets can be applied more broadly to markets where there are no market makers is correct and useful.

I know not of any 'market' where there are no 'market makers'. My observation sees markets move in the direction where most money pushes it.

p.s. thought of a back up so checked www for 'market maker'.

In currency exchange

Most foreign exchange trading firms are market makers and so are many banks. The market maker sells to and buys from its clients and is compensated by means of price differentials for the service of providing liquidity, reducing transaction costs and facilitating trade.

In stock exchange

Most stock exchanges operate on a "matched bargain" or "order driven" basis. When a buyer's bid price meets a seller's offer price or vice versa, the stock exchange's matching system decides that a deal has been executed. In such a system, there may be no designated or official market makers, but market makers nevertheless exist.
 

Craton

Mostly passive, contrarian.
Joined
Feb 6, 2013
Posts
698
Reactions
111
Certainly an area of interest and intrigue and +1 thanks tech/a :xyxthumbs
 
Joined
Nov 25, 2011
Posts
58
Reactions
0
Just finished reading this books...once again, thanks to T/A...

btw, just curious question here, jhgcj65dtyhjvyjrth_zps523b56bb.gif

is that function only provided by tradeguider? is there any other provider? the cheaper/free one perhaps? :p

it looks a good buy/sell indicator =]

cheers
Sergio
 

Attachments

  • jhgcj65dtyhjvyjrth_zps523b56bb.gif
    jhgcj65dtyhjvyjrth_zps523b56bb.gif
    6.4 KB · Views: 0

tech/a

No Ordinary Duck
Joined
Oct 14, 2004
Posts
19,531
Reactions
3,901
Just finished reading this books...once again, thanks to T/A...

btw, just curious question here, jhgcj65dtyhjvyjrth_zps523b56bb.gif

is that function only provided by tradeguider? is there any other provider? the cheaper/free one perhaps? :p

it looks a good buy/sell indicator =]

cheers
Sergio

Serg

Two things.

(1) There are other programmes which have had people try to copy the coding.
(Re engineer it) They are often wrong and often give signals which even Trade guider haven't found.
Amibroker has had a few who have tried to do it.
I personally wouldn't use it.
Tradeguider have now partnered up with some software providers and included their signals with the software.
Ninja Trader is one. I think now also Amibroker has an addon.

(2) And most importantly these "signals" are nothing more than indicators ( I like to call them ANTICIPATORS ) that something is happening relative to Price Range and or Volume over one or up to 3 bars.
If you use them in isolation as a buy sell signal you will be bitterly disappointed not to mention whipsawed all over the place.
It is really important that you learn how to read a chart.
Couple chart reading with VSA and you can develop a low risk profitable trading methodology in many timeframes.

I think the best lesson learned will be the ability to discard a trade that fails immediately then on to the next---without ANY emotional attachment or deliberation into "What went wrong"---it doesn't matter its simply --WRONG!

Enjoy the journey its well worth it.
 

Attachments

  • jhgcj65dtyhjvyjrth_zps523b56bb.gif
    jhgcj65dtyhjvyjrth_zps523b56bb.gif
    6.4 KB · Views: 1
Joined
Oct 24, 2005
Posts
1,291
Reactions
805
Tradeguider have now partnered up with some software providers and included their signals with the software.
Ninja Trader is one. I think now also Amibroker has an addon.

Just in case Sergio goes looking for it, there is no TradeGuider addon for Amibroker and it's very unlikely there will be.
 
Joined
Oct 24, 2005
Posts
1,291
Reactions
805
Joined
Nov 25, 2011
Posts
58
Reactions
0
thanks Tech/a and CaptainBlack =]

yes, i just finish another book...charting(t/a) for newbie from newbie series =]
 
Top