Dynamitetrader 

It's all so simple really, first set your chart to colour volume and price bars the same, red for lower close than previous close and green for higher close than previous close! Overlay HVOL on your volume chart. I never trade tops or bottoms of day trends or higher, but wait for impetus - volume to confirm a desire to move in a direction, up or down, volatility should increase with any volume increase with market moves up or down, any decrease generally does not confirm the move and actually belies makret manipultion potential. Volume increase and lack of volume shows where the interest in market direction lies. Block buying and block selling in larger numbers than usual will help you see where the institutions are trading. This is my Dynamite! Good luck, let me know which markets you trade! I trade futures only!

Thanks for taking the time to add details! So do you trade intraday or use this indicator combination in a daily chart?

I’m a futures guy almost exclusively, crude, cattle and grains.. with dabbles elsewhere

J

Fat Tails 

There are several volatility based trailing stops that you may use. All of them use the ATR such that there will be a wide stop when volatility is high, but a narrower stop when the market calms down. Here are some example for a long stop. The short stop would be defined the opposite way. ATR Trailing Stop: A multiple of the ATR is deducted from the current close. Chandelier Stop A: A multiple of the ATR is deducted from a Donchian high Chandelier Stop B: A multiple of the ATR is deducted from the highest high since in position SuperTrend: A multiple of the ATR is deducted from a moving average Coding these indicator is fairly simple. The starting point would be the current close, the highest high over a selected lookback period of a moving average. In a second step you simply deduct a multliple of the ATR over a selected lookback period. Below are screenshots attached showing the different trailing stops. ATR Trailing Stop: Chandelier Stop A: Chandelier Stop B: SuperTrend (Median):

Wow! Thanks for going to the work to send all this. I was familiar with the basic ATR stop, it’s interesting to see the various adaptations!

Thanks!

J

joker542 

BASIC UPPERBAND = (HIGH + LOW) / 2 + Multiplier * ATR BASIC LOWERBAND = (HIGH + LOW) / 2 - Multiplier * ATR FINAL UPPERBAND = IF( (Current BASICUPPERBAND < Previous FINAL UPPERBAND) and (Previous Close > Previous FINAL UPPERBAND)) THEN (Current BASIC UPPERBAND) ELSE Previous FINALUPPERBAND) FINAL LOWERBAND = IF( (Current BASIC LOWERBAND > Previous FINAL LOWERBAND) and (Previous Close < Previous FINAL LOWERBAND)) THEN (Current BASIC LOWERBAND) ELSE Previous FINAL LOWERBAND) SUPERTREND = IF(Current Close <= Current FINAL UPPERBAND ) THEN Current FINAL UPPERBAND ELSE Current FINAL LOWERBAND

Joker thanks for the long-hand logic here. It’s exactly what I was looking for! I can code it out from this !!

J

Interesting discussion @Dynamitetrader
@Jerryflyguy

I also trade using VSA and market structure. I look forward to seeing more. Do you guys have a journal?

K

Jerryflyguy 

Thanks for taking the time to add details! So do you trade intraday or use this indicator combination in a daily chart? I’m a futures guy almost exclusively, crude, cattle and grains.. with dabbles elsewhere J

Yes, futures currency and grains, nat gas, bonds, metals, oil.

When I get to 10 posts, then I'm allowed to post charts!

DT

Jerryflyguy 

Thanks for taking the time to add details! So do you trade intraday or use this indicator combination in a daily chart? I’m a futures guy almost exclusively, crude, cattle and grains.. with dabbles elsewhere J

Dynamite trader,

What is your difference from using Granville's "On balance Volume" indicator which is based on identifying higher or lower closes over time and accumulating volume based thereon?

If you wish to finesse Granville generalised approach, then I suggest, a study Gann's 'Rule ofThree' method or his "How to Balance a Stock method" to identify the basis for his reversal signals for fast moving stocks.

Dynamitetrader 

Indeed the volume does not show you the balance between buying and selling, supply or no supply, demand or no demand, but that buying and selling has taken place and thus the quantity of trade exchanges. The volatility shows the rapidity, not of price effect, but the willingness of the traders to get involved in the exchange of contracts, it's the emergency with which the desire to exchange is portrayed creating volatility based on what the crowd of traders percieve and thus create volatility or not! A lack of volatility then, is quite the opposite and shows receding interest, just as receding volume and is therefore very often an indication of an undesired directional movement! I would add to your analogy with, it's not just how fierce the soldiers fought, but the quality of their weapons! 95% or greater get this wrong, so size is not the issue here!

I think there is some commonly held illogic in the above reply. If you always think buying and selling is evenly balanced because one buyer is always matched up to one seller then the above logic may work, for you. But if you think higher prices suggest higher demand, and lower prices suggest more supply, then that suggests there are always imbalances shown through the bid/ask prices,and what is the next accepted buying or selling price.
Technical analysis indicators, need to measure and show over a specified time period, a fair allocation basis for determining the buying pressure and the selling pressure, as that shows the force being exerted by the buyers or the sellers from time to time. I believe you can then end up with fair estimates of changes in buyer and seller behaviors based on measurements, not intuitions. I have many new indicators that reflects this paradigm works in practice.

cmacdon 

I think there is some commonly held illogic in the above reply. If you always think buying and selling is evenly balanced because one buyer is always matched up to one seller then the above logic may work, for you. But if you think higher prices suggest higher demand, and lower prices suggest more supply, then that suggests there are always imbalances shown through the bid/ask prices,and what is the next accepted buying or selling price. Technical analysis indicators, need to measure and show over a specified time period, a fair allocation basis for determining the buying pressure and the selling pressure, as that shows the force being exerted by the buyers or the sellers from time to time. I believe you can then end up with fair estimates of changes in buyer and seller behaviors based on measurements, not intuitions. I have many new indicators that reflects this paradigm works in practice.

You may consider anything you like to be illogical, that is your prerogative, but the evidence is clear that volume and volatility are leading indicators, they are logical, no matter what other indicators have been constructed to show market pressure! The raw volume and voliatility always cut the mis information out of the market. The Elephants footprint shows about 80% of the time and that's enough for me no matter who wishes to deny the evidence. It's in the charts!

The best indication in trading would show the correlation between volume, volatility and price action and I am currently engaged in a programming exercise with an undisclosed organisation who wish to explore my methods, for which I know no other trader who uses what I use! I am simply responding to help others here, not wishing to criticise or be criticised!

If you accept what I say or not, it is of no concern to me!

cmacdon 

I think there is some commonly held illogic in the above reply. If you always think buying and selling is evenly balanced because one buyer is always matched up to one seller then the above logic may work, for you. But if you think higher prices suggest higher demand, and lower prices suggest more supply, then that suggests there are always imbalances shown through the bid/ask prices,and what is the next accepted buying or selling price. Technical analysis indicators, need to measure and show over a specified time period, a fair allocation basis for determining the buying pressure and the selling pressure, as that shows the force being exerted by the buyers or the sellers from time to time. I believe you can then end up with fair estimates of changes in buyer and seller behaviors based on measurements, not intuitions. I have many new indicators that reflects this paradigm works in practice.

Is there any chance of you providing some details as to the specific indicators you use to support this strategy?

Thanks

swschultz 

Is there any chance of you providing some details as to the specific indicators you use to support this strategy? Thanks

Swschultz
I could as I have been writing a book setting them all out. It has taken 6-years to write, 50% longer than writing my Ph.D. but when I last mentioned a solution to a previous post by someone else, I was chastised by Futures.IO as attempting to market the book on their website.
cmacdon