I had a look at their website. It is an application of the concept of seasonality to intraday chart periods, certainly a serious approach. Do you have more details? I do not understand the trade station code that I found on the website without further explanations. Also it is not obvious how to use the indicator.
You can download the magazine also from his homepage. There are endless ways how to use volume and he introduced some ideas how to use volume in fx in his series. The latest edition is about his indicators.
The MRI (Marney Range Indicator) averages every trading hour of the last fifty days. That's what the horizontal line shows. For example it shows that the average ATR form 00:00 - 01:00 is 25 pips and from 01:00 - 02:00 30 pips and so forth.
The same applies for the Volume indicator.
The vertical bars show the current range or volume so you have an indication if the markets trades below or above its average. In general if the market is making a new high and both the range and volume is higher than expected for that time of day, then the move may be considered to be more significant and conversely if a move occured on paritcularly low volume and range, then it might be considered less significant.
Anyways, it's not a system. Just some ideas I think are interesting enough to play with them.
I find it very difficult to use the volume information. Let us say that the bar from 10:00 AM to 11:00 AM shows higher volume than the average volume of the 10:00 AM to 11:00 AM bars for the last 50 days, what are you going to do with this information? It does not tell you, whether the market will be trending or whether it will stay in a narrow range. I have gone through the daily $EURUSD chart and have found high volume, wide ranging days as well as high volume, narrow range days.
However, it can be revealing, during which hours of the day volatility picks up.
(1) If volatility is usually low, you do not want to trade.
(2) If volatility usually picks up, you want to trade breakouts.
(3) If volatiliy usually dries up, you may consider countertrades (non-trending days only).
So you could use this information to divide the day into different volatility zones. This may give you a clue, how to adapt your trading style. The volatiliy zones could be colour-coded, to show low, average and high volatility expectation.
To do this, you could collect the hourly ranges, write them to to an array sized  x , then return the hourly average range and smooth it a bit. You then would know
- expected hourly volatility
- actual volatility compared to expected volatility
What Marney said in his article is that when the range AND volume are above average that the move is considered to be more significant.
I absolutely agree with you it is important for your trading to know the 'pulse' of a specific pair. To know at what time volatility and volume usually picks up and dries out again. Each pair is a bit different and these indicators illustrate that 'pulse' quite well.
I don't know if apart from these informations the indicators may be helpful for any further trading decision. But it's hard to find out when I don't have them on my charts. That's the reason I am asking here if someone is interested in programming them as I don't have great programming skills at all.
What I do know is that price in general is more commited to key levels of support and resistance in times of low volume than during times of high volume (I think you meant the same whatr you said about volatility at point 3).
I don't think you can trade just on volume alone but volume could certainly provide an edge. The author proved this with a simple eod backtest when he went long if price made a new high or went short if price made a new low during London afternoon which is considered the time with the most volume.
For me the indicator doesn't need to be color coded. I am happy if its just providing the the average ATR & volume vs. the current. Acutally I find the marney layout perfect (without the bars color coded).
Last edited by janson; July 17th, 2010 at 11:38 AM.
I will think about integrating this into my better volume indicator. For smaller timeframes and daily chart better volume makes sense, but for the intermediate timeframes (between 30 min and 1 day) I could replace that approach with the Marney indicator.
I also have an idea, how to integrate the wide ranging bars into the concept.
Thank you. I am really looking forward to it. I guess you are talking about NT as platform?
If you are planning to code the exact Marney indicators you may want to contact Caspar Marney before. Two weeks ago I wrote him an e-mail as I wanted to know if his indicators have been already coded to NT. He said not yet but if I know anybody who can translate the code into NT he would be very happy to have a chat with him.