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Importance of Volume
Started:October 7th, 2016 (08:15 PM) by phyoko Views / Replies:1,877 / 37
Last Reply:October 17th, 2016 (12:18 AM) Attachments:9

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Importance of Volume

Old October 16th, 2016, 04:04 PM   #31 (permalink)
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Narcissus View Post
I am a fan of volume studies. I am also a strong believer that volume changes often happen BEFORE price changes.

My favourite indicator is Equivolume indicator where the width of the price bar is adjusted according to the volume traded. It gives a better feel for the validity of price moves.

I also use average tick size which helps me to differential small vs big players locations.


@Narcissus

What are you using that colours your bars that way it does in your charts

thanks

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Old October 16th, 2016, 04:40 PM   #32 (permalink)
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I use Lynnsoft IRT. They have Equivolume indicator which adjusts the width of the bar according to the volume.


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Old October 16th, 2016, 04:51 PM   #33 (permalink)
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Narcissus View Post
I use Lynnsoft IRT. They have Equivolume indicator which adjusts the width of the bar according to the volume.


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@Narcissus

Your bars are grey, purple, blue - is these painted according to the size of the equivolume bar?

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Old October 16th, 2016, 06:23 PM   #34 (permalink)
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@Narcissus

Your bars are grey, purple, blue - is these painted according to the size of the equivolume bar?

Purple for down bar, Blue for Up bar. (I don't like the Red/Green colours due to their association to profits/losses and the associated emotions).

Grey colour is the border of the bar. If I see predominantly grey colour, I know that the volume in that bar/area is very low. Exception would be a thick doji bar in which case the tick chart will show my big buyers/sellers.

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Old October 16th, 2016, 06:48 PM   #35 (permalink)
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Narcissus View Post
Purple for down bar, Blue for Up bar. (I don't like the Red/Green colours due to their association to profits/losses and the associated emotions).

Grey colour is the border of the bar. If I see predominantly grey colour, I know that the volume in that bar/area is very low. Exception would be a thick doji bar in which case the tick chart will show my big buyers/sellers.

OK, Thanks. In NT, the equivolume bars are always red/green, which could be changed to purple/blue. For your chart, I thought there might be some kind of filter for the grey bars (e.g. if volume is less than xxx paint the bar grey). That's obviously not the case, it's just a matter of how nt displays candle volume bars vs the platform you are using.

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Old October 16th, 2016, 10:59 PM   #36 (permalink)
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For your chart, I thought there might be some kind of filter for the grey bars (e.g. if volume is less than xxx paint the bar grey) .

Actually, there IS a filter in my 1000 tick chart.

If the volume is less than 3000, then I want them to be just 1 pixel, which means it's grey. In this case, the average volume per trade is less than 3. I call that amateur or retail play.

Anything more than 5000, it will be painted as maximum of 10 pixel. To me, that's institutional play. Everything in between will be graded between 1-10 pixels.

Obviously it's not necessarily true of who is being active, but it helps me to understand market behavior better.

Please note that Overnight contracts are generally low average and the closing minutes of RTH is high average and I don't read too much into those periods of activity.

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Old October 17th, 2016, 12:09 AM   #37 (permalink)
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@bobwest

1 Minute Bar

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1000 tick bar

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This is really cool. Is the width solely based on current volume, or can you configure it so that the width is relative to previous days?

Yesterday's excellence is today's standard and tomorrow's mediocrity
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Old October 17th, 2016, 12:18 AM   #38 (permalink)
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This is only based on the bars visible in the range. Not comparing past days or corresponding minutes. However, I do use relative volume indicator, similar to the one you see in @Inletcap postings. That compares the current minute bar over the past n number of days same minute bars.


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