The key is to come up with an approach that is self-adapting and self-correcting, like trading price. By doing so, one follows the market whatever it does and wherever it goes. If one tries to force the market into a particular pattern of behavior, it'll respond pretty much the way a cat would.
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I would add and what I look for is trading Value. To me price must have a volume component as an integral part. How much business is being conducted at said price tells me a great deal. If not much volume is coming into certain prices no real value is being created.
Like the retail store that puts on a sale for a handful of days with per-person limits and limited quantities to get you into the store in general so you "might" purchase other non-sale items. Or even a lost leader meaning the store take a controlled or small hit just to get you in the door.
Market does the same thing and you can spot it with volume and volume at price. Meaning volume and price and volume at price or a volume profile. Or on the tape or in the DOM or in a "Foot Print" chart, (starting to sound a bit like Dr Seuss....lol.....) which I don't personally use.
Price is an advertising mechanism and sales are for short time periods. Sales don't last long and stores do not sell great volumes on sale. They sale relatively small volumes at sale price. Just makes good business sense.
So use volume in trading to assist in a more fuller understanding of the market auctioning on the chart. If your market goes "on sale" buy it ride it back to value and flip it out. If the market just gets too expensive sell it and ride it back to value and flip it out. Trick as I see it is catching it because .......At these price extremes time is short to act and volume limited.
Doubt kills more dreams than failure ever will. Perfect: the enemy of Done. per·fec·tion·ist: ultimately one lacking self-confidence
Buy Low And Sell High (read left to right or right to left....lol)
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I used to employ volume all the time, even to the extent of using CVBs. But as the years rolled by and I became more famiiar with AMT, I was more able to judge volume by activity, pace, and extent, and the volume bar became less useful. Plus it took up real estate that I could put to better use.
It doesn't matter to me whether three people are moving price in a given direction or three million. All that matters to me is that price is moving in that given direction. The company is nice, but not necessary. And as for value, there will be more volume at value levels as a matter of course due to the amount of time that is spent there and the amount of trading that's taking place. If volume weren't heavier there, traders would have no reason to hang out at that level.
In some respects, it's a chicken-or-egg situation. Is there a lot of volume in that area because that's where traders have found and are finding value? Or are traders finding value there because that's where the volume is and has been? The answer most likely lies in the negotiation aspect of AMT, which helps to explain why the "value area" isn't always centered between the upper and lower limits.
As for the "time is short to act" aspect, you might be interested in what I wrote in my thread about the "danger point".
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I'm starting to understand what you're saying, @DbPhoenix.
I have the paper trade Thinkorswim mobile on my phone, and whenever I have a moment, I watch the tick chart. Sure, it's a 20 minute delay, but I can still watch how price moves, when volume comes in, and how price will often move with nearly zero volume.
I went from "learning to trade" to studying the collective market behavior.
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