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The market constantly changes. BUT What stays the same??
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The market constantly changes. BUT What stays the same??

  #31 (permalink)
Live Your Bliss
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Ask yourself: where can I enter and place my stop so the big money will defend my stop? (as opposed to running it)

Well, the big money will defend your stop if your entry is the same or close enough to theirs... meaning you should be entering on big or bigger volume, joining in their trading.

"...the degree to which you think you know, assume you know, or in any way need to know what is going to happen next, is equal to the degree to which you will fail as a trader." - Mark Douglas
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  #32 (permalink)
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Anagami View Post
Big volume does not always have the same meaning. There is stopping volume, where the move hits significant resistance on large volume but price does not move much.

I personally focus on what I call inception volume, an increase in volume at the beginning of moves (in the right price action context). This is where the odds are the best for a strong continuation.

I never enter on weak volume, unless it is a choice pullback... but if there is a trend, I am typically in it already.

Keep in mind, however, that "big volume" at the beginning of moves also means big selling. Demand is what propels price, not volume.

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  #33 (permalink)
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DbPhoenix View Post
Keep in mind, however, that "big volume" at the beginning of moves also means big selling. Demand is what propels price, not volume.

We can get into the semantics of it back and forth, but I am merely sharing what works for me and what makes me money. Cheers.

"...the degree to which you think you know, assume you know, or in any way need to know what is going to happen next, is equal to the degree to which you will fail as a trader." - Mark Douglas
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  #34 (permalink)
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I like volume as it usually comes with workable orderflow.
I havent got a system that says big volume + breakout = real breakout.
But the more volume the more I can usually trust what im seeing.

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  #35 (permalink)
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xylem View Post
I like volume as it usually comes with workable orderflow.
I havent got a system that says big volume + breakout = real breakout.
But the more volume the more I can usually trust what im seeing.

Given the you're the OP, and you're interested in this, I'll point out that the "big volume" on a breakout represents not only the buys of those who are buying the breakout but the sells of those who instigated the breakout in the first place, i.e., the goal of the sellers was the breakout, into which they can sell what they had bought beforehand. Whether the breakout results in a successful move upward or not will depend on the willingness of buyers to pay the ask, and the more, the better. If those buyers peter out, or if they choose not to pay what's being asked, the breakout will fail, big volume or no big volume, which is why many traders prefer to buy the retracement after the breakout rather than the breakout itself.

You may find it enlightening to analyze some breakouts using a 1m bar to see exactly when and where the volume actually arrives.

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  #36 (permalink)
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DbPhoenix View Post
Given the you're the OP, and you're interested in this, I'll point out that the "big volume" on a breakout represents not only the buys of those who are buying the breakout but the sells of those who instigated the breakout in the first place, i.e., the goal of the sellers was the breakout, into which they can sell what they had bought beforehand. Whether the breakout results in a successful move upward or not will depend on the willingness of buyers to pay the ask, and the more, the better. If those buyers peter out, or if they choose not to pay what's being asked, the breakout will fail, big volume or no big volume, which is why many traders prefer to buy the retracement after the breakout rather than the breakout itself.

You may find it enlightening to analyze some breakouts using a 1m bar to see exactly when and where the volume actually arrives.

Is this where AD (advance decline) comes in handy? Or $TICK/$TICKI? Used as a means to see who's toppling over who?

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FABRICATORX View Post
Is this where AD (advance decline) comes in handy? Or $TICK/$TICKI? Used as a means to see who's toppling over who?

It's not a question of toppling or of dominance; it's more a question of let's make a deal. If buyers are willing to pay the ask, price will rise. If they aren't, either price will stop moving -- and it often does -- or sellers will be forced to lower the ask in order to make a deal and price will fall. As regards the OP's thread topic, this has been the case for 6,000 years.

Just watch the price.

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  #38 (permalink)
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xylem View Post

The answer comes down to what in the market is a constant that you can always capitalise off?

Im asking what is consistent in the market.

In my opinion, the only thing I've found that the market respects - no matter if it's consolidating or trending - is "value"; the market will move from balance to imbalance then back to balance. Remember, the market is there to serve institutional traders first and foremost.

Most times the pro money will just bounce the market around inside of a value area. But other times it will move price, seeking a new value area, and it will eventually move it to an area of imbalance that it can't sustain. This is where you get your high quality swing point. The one that you can put a 6 tick stop at and never get hit.

So, what is consistent with the market that you can capitalize off of? You can capitalize off of identifying high probability levels of price imbalance given the history of the market. You can find low volume nodes using tools like Volume Composites, Static, Dynamic, and Real Time Volume Profiles, combined with other indicator reference levels to identify price levels that have confluence.

Once you identify imbalance levels outside of value, order flow gives you indication if these levels are being respected or not. After that, it's between you and the left-hand mouse button.

That's my approach to the whole can of worms that is "The Market".

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Markets change in terms of volatility, trend and liquidity. I think now there are more shakeouts compared to "before" but I am very new to trading, havent seen many markets.

Understanding yourself is just as important as understanding markets.
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  #40 (permalink)
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DbPhoenix View Post
You're not wrong, exactly, but the volume has nothing to do with it. The chop is defined by the price movement, not the volume. Given that for every transaction there must be both a buyer and a seller, there is no such thing as "buy volume" or "sell volume", though some use those terms to define resting orders. Until the transaction is completed, however, there's no print.

At its simplest, price moves up because buyers are willing to pay the ask. It moves down because sellers have to lower the ask to make a deal. The number of traders may have something to do with whether or not an advance continues and is sustainable, but it has nothing to do with the advance -- or decline -- itself.

As for gaps, you ought to look at a 1t chart sometime. You'd be surprised at the number and extent of the gaps in that bar or candle that appears to be whole.

I just reread this today. Amazing how it clicked a week later, in a random place.

I was watching an episode of cutthroat kitchen, where the chefs auction for pranks to play on other chefs during the competition. Anyways, one auction was a hot item. Alton Brown said " I'll start the auction at $200" and immediately, the first bid was $3000, and was bid higher from there. What clicked for me was seeing the first offer price blow right past the starting bid. That was a gap. If that was a candle, you would've thought it traded all the way up. If you saw the tick chart, you'd see the mile wide gap.

Someone recently mentioned that charts were a creation of ours, not a requirement of the market. Charts are not a natural market output and are therefore limited to however we designed them. Now were trying to trade around what we think is happening, when were very much misunderstanding the reality, all thanks to a graphical interface that we designed, that doesn't represent the truth in its entirety.

-Jimmy
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