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How to use volume in your trading
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How to use volume in your trading

  #261 (permalink)
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Some work on "stopping volume"

Hey All,

I've been lurking here for a little while but haven't posted much. But in fact I've been very busy working on some ideas that started on this forum. People here have been very generous sharing their work so I thought I would try to add something if I could.

I want to discuss a lot of work I did on "stopping volume". I think it was on this thread that I found a indicator called "Volume Stop" (originally created by Cory). When I put it on my chart I was intrigued by the fact that it seemed to catch some major turning points in the market, but it also had quite a few false signals. The good ones were enough to make me want to explore it further.

Below is a typical chart which shows what I'm talking about--note how some of the signals catch the dominant pivot. If I could weed out the false signals I could do some profitable trading!
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  #262 (permalink)
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At first I was looking at this "Volume Stop" indicator in conjunction with "Volume Patterns" indicator (posted by Cunparis). The "high-volume churn" and "low-volume test" concepts were familiar to me, but I didn't know why the "volume stop" sometimes gave such good signals. I decided to focus on the volume stop so I could figure out what made it work.

Below are several charts from October 7th showing both Volume Stop and VolumePatterns along with some Market Profile support and resistance levels. This is the kind of chart I was envisioning I might be able to start trading off of. I didn't take any of the trades shown--I was only investingating the signals at this point.
Attachment 4680

Attached Thumbnails
How to use volume in your trading-es-12-09-987tick-10-7-09-volume-stop3.png   How to use volume in your trading-es-12-09-987tick-10-7-09-volume-stop4.png   How to use volume in your trading-es-12-09-987tick-10-7-09-volume-stop5.png  
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  #263 (permalink)
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cunparis View Post
Sorry I didn't clarify that. I tried renko on tradestation, crap. renko median were ok on NT, but roonius says sbsrenko is better so I am using that.

I first stumbled on this forum because of this thread, then got fascinating exploring other things, trying out different indicators etc. and forgot about it. But digging into volume is my 'thang' right now.

I tried recoding BetterVolume2 for range charts because I was testing them out a lot this summer. Because they have the same range - or in Renko's case either the continuation range or the correction range 2* higher, many of the criteria don't really work because volume/range is a big part of it, well that still works, but also comparing ranges which doesn't.

I tried recoding it using time instead of range but sort of gave up. If you like, I can post my initial attempt which might give you ideas to improve it.

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  #264 (permalink)
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hello
What is pivotRSI,
THANK YOU

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  #265 (permalink)
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mea109 View Post
hello
What is pivotRSI,
THANK YOU

This is simply an indicator which paints standard pivot lines on the chart--and they stay there on historical charts. The ones I found on Ninja forum were either too confusing or they only painted lines on the current day. This indicator I made myself. It only works on 24-hour charts. I could post it if your interested, but it's not a new fangled take on RSI or anything like that.

Ron

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  #266 (permalink)
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rsi77 View Post
This is simply an indicator which paints standard pivot lines on the chart--and they stay there on historical charts. The ones I found on Ninja forum were either too confusing or they only painted lines on the current day. This indicator I made myself. It only works on 24-hour charts. I could post it if your interested, but it's not a new fangled take on RSI or anything like that.

Ron


Good evening and thank you
if you do not mind I'd like to test it, if you can send me the zip file, it would be kind of you
I thank you

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  #267 (permalink)
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stopping volume-continued

In order to better understand “stopping volume” I looked “beneath the hood” of Cory’s indicator. Although there are two types of chart markers the indicator will draw on your chart—triangles and diamonds—there are actually four distinct price/volume patterns which will trigger the drawings.
The diamonds are triggered by a 3-bar price/volume pattern which I will call Volume Divergence. The triangles are triggered by three types of 3-bar price/volume patterns which I will call Volume Exhaustion. I’m not sure where I picked up that term, but it seems a good way to name these patterns. I will call these three patterns Volume Exhaustion_Type1, Volume Exhaustion_Type2 and Volume Exhuastion_Type3…or VE1, VE2 and VE3 for short. These patterns are described below:
·Volume Divergence Bearish—Defined as 3 bars of declining volume with the high of the 2nd bar >= the high of the 1st bar, and the high of the 3rd bar > the high of the 2nd bar (i.e. the last bar makes a new high), but with the last bar’s close below its open.
·Volume Divergence Bullish—This is defined as 3 bars of declining volume with the low of the 2nd bar <= the low of the 1st bar, and the low of the 3rd bar < the low of the 2nd bar (i.e. the last bar makes a new low), but with the last bar’s close above its open.
Volume Exhaustion Patterns

Volume Exhaustion Bullish—defined as 3 bars of increasing volume accompanied by 3 bars of lower lows, (or test of previous bar’s low), but with the last bar’s close higher its open. Additionally 1 of the 3 following conditions must be fulfilled

1.VE1—The range of the current bar is greater than the range of the previous bar multiplied by the variable “range expansion”. The default value for range expansion is 1.3
2.VE2—The range of the current bar is less than the range of the previous bar
3.VE3—The distance between the open and the close of the current bar is less than the distance between the open and the close of the previous bar
Volume Exhaustion Bearish—defined as 3 bars of increasing volume accompanied by 3 bars of higher highs, (or tests of previous bar’s high) but with the last bar’s close lower than its open. Additionally 1 of the 3 following conditions must be fulfilled

1.VE1—The range of the current bar is greater than the range of the previous bar multiplied by the variable “range expansion”. The default value for range expansion is 1.3
2.VE2—The range of the current bar is less than the range of the previous bar
3.VE3—The distance between the open and the close of the current bar is less than the distance between the open and the close of the previous bar

I created a new version of VolumeStopv3 and called it VolumeStopv3b. In my version you can choose which type of volume expansion you wish to be shown. This way you can explore the strengths and weaknesses of each type. I’ve attached a series of charts from today’s market which shows the various signals generated by the different patterns. I've also uploaded the indicator which allows you to separate the different signals to the file sharing section.



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  #268 (permalink)
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Thanks for the information. I am looking forward to taking a closer look. Are you working off of Ninja 7? When I went to download it stated newer version. I am currently working on 6.5. Please advise and thanks again.

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  #269 (permalink)
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humble View Post
Thanks for the information. I am looking forward to taking a closer look. Are you working off of Ninja 7? When I went to download it stated newer version. I am currently working on 6.5. Please advise and thanks again.


I'm not using 7 yet. These indicators ought to work in 6.5. Let me know if you keep having problems.

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  #270 (permalink)
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Hmmm . . .

Import failed. The NinjaScript Archive file you wish to import was generated with a newer version of NinjaTrader and is not compatible with the version installed on your PC

I am currently on 6.5 -- I must be missing something. Any ideas? Thanks

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