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

  #471 (permalink)
Trade with the flow
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To update the thread for those not following my journal thread, looking at the volume on a typical bar chart is what i'll call "vertical volume". The volume bars are vertical and are for the bar's period (time, range, ticks, whatever). This is how I used to use volume.

The way I'm currently using volume I will call "horizontal volume". This means that I'm looking at the volume at each price, independent of the bar's period. This is also called "volume at price" and "volume profiling".

Here's an example:

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You can see the volume profile at the left & right. The one on the left is a "composite" which has the volume over the past year or so. The volume on the right is for the current day. My goal in this is to take time out of the equation and be time independent. That means timeframe independent. The above chart would look the same if you used any bar period type (minute, tick, range, whatever). That is very powerful. Indicators would never look the same if you change the bar type. My thinking is I want to be as independent of time as possible.

I've written more about this here with some links to webinars which explain it in detail. This volume profiling comes from Market Profile but MP used time as a proxy for volume and volume profiling removes the time element.

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  #472 (permalink)
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Using a volume profile is good for finding levels which come in the shape of low volume prices where no one wants to trade. To actually execute, you need more detail. In the video below, you can see how using both the bids and ask, along side what is actually trading at each price gets you into a trade.

YouTube - Scalping ES with Order Flow

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  #473 (permalink)
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Just to carry on from my previous post about detailed volume. The other types of volume such as basic volume is also an effective tool for a trader. Below is a video I made of a short I took yesterday. Notice how trading up into the 1181 level on a volume divergence alerts us to a trade opportunity. After we know there's an opportunity on the table, we then have to go to the detailed volume (order flow) on the order book to pin point the entry. It's just about using the right tool for the right job. To make a detail precise decision such as entries, then you need to look at detailed volume and information. To be alerted to general areas of interest, then basic volume is fine. Like I say, just make sure you use the right one for the right job

YouTube - Day Trading ES 18th October.avi

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  #474 (permalink)
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Bids View Post
Just to carry on from my previous post about detailed volume. The other types of volume such as basic volume is also an effective tool for a trader. Below is a video I made of a short I took yesterday. Notice how trading up into the 1181 level on a volume divergence alerts us to a trade opportunity. After we know there's an opportunity on the table, we then have to go to the detailed volume (order flow) on the order book to pin point the entry. It's just about using the right tool for the right job. To make a detail precise decision such as entries, then you need to look at detailed volume and information. To be alerted to general areas of interest, then basic volume is fine. Like I say, just make sure you use the right one for the right job

YouTube - Day Trading ES 18th October.avi

I tried to understand what you meant but was unable. No commentaries on the video. On the other hand, price visited 1180 Friday so we could expect a retest and the fact it occured at the end of the day yesterday we logically could not expect price would go much further. Again, it think your example is not the best case as volume is slowing down at that time of the day anyway.

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  #475 (permalink)
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trendisyourfriend View Post
I tried to understand what you meant but was unable. No commentaries on the video. On the other hand, price visited 1180 Friday so we could expect a retest and the fact it occured at the end of the day yesterday we logically could not expect price would go much further. Again, it think your example is not the best case as volume is slowing down at that time of the day anyway.

I'm not sure what you mean it's not a good example as volume is slowing down as that's the point of the video, to show you how volume is slowing down and how you can use that to be alerted to a possible trade.

The order flow on how to exactly take the trade is something different which I refered to earlier as detailed volume. Just seeing volume slow down on it's down doesn't mean anything. If you just thought " resistance at 1181, volume dying, so i'm gonna selling 1181, chances are you got stopped as it just traded clean through 1181. If you look on the video, the actual trade was at 82 and 81.75. As i've said before, the margin for error is so small that you need to make sure you're reading the correct volume for the correct job.

I think the video showed that nicely. If you want a detailed video completely explaining my trading, then you're out of luck as that's not what i'm here for. I'm just here to push you in the right direction, not to hand it on a silver plate.

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  #476 (permalink)
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I think the video showed that nicely. If you want a detailed video completely explaining my trading, then you're out of luck as that's not what i'm here for. I'm just here to push you in the right direction, not to hand it on a silver plate.

Well, i think you read me wrong. The trade showed in your video occured at the very end of the trading session. I rarely take trades at that time. All i said was i could not understand what you were trying to convey in your muted video. Don't take it as an insult, cool down you'll get other opportunities to show off your skills.

I appreciate the fact you are here just to push us 'naive and uninformed traders' in THE right direction.

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  #477 (permalink)
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trendisyourfriend View Post
Well, i think you read me wrong. The trade showed in your video occured at the very end of the trading session. I rarely take trades at that time. All i said was i could not understand what you were trying to convey in your muted video. Don't take it as an insult, cool down you'll get other opportunities to show off your skills.

I appreciate the fact you are here just to push us 'naive and uninformed traders' in THE right direction.

Thats'a good call, it really depends how much i'm up on the day which dictates if i'm gonna take an opportunity late in the session. For example, if I have 4 points for the day, I wouldn't bother, but if I have 8pts on the day, then i'm ok with risking 1pt to get another 3. If it's a loser, oh well, worse things can happen than end the day 7pts up

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  #478 (permalink)
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Just to carry on from my previous post about detailed volume. The other types of volume such as basic volume is also an effective tool for a trader. Below is a video I made of a short I took yesterday. Notice how trading up into the 1181 level on a volume divergence alerts us to a trade opportunity. After we know there's an opportunity on the table, we then have to go to the detailed volume (order flow) on the order book to pin point the entry. It's just about using the right tool for the right job. To make a detail precise decision such as entries, then you need to look at detailed volume and information. To be alerted to general areas of interest, then basic volume is fine. Like I say, just make sure you use the right one for the right job

YouTube - Day Trading ES 18th October.avi

looking at the video, this is some excellent trading, very well done.

hope to see and read some more.

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  #479 (permalink)
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Bids View Post
Just to carry on from my previous post about detailed volume. The other types of volume such as basic volume is also an effective tool for a trader. Below is a video I made of a short I took yesterday. Notice how trading up into the 1181 level on a volume divergence alerts us to a trade opportunity. After we know there's an opportunity on the table, we then have to go to the detailed volume (order flow) on the order book to pin point the entry. It's just about using the right tool for the right job. To make a detail precise decision such as entries, then you need to look at detailed volume and information. To be alerted to general areas of interest, then basic volume is fine. Like I say, just make sure you use the right one for the right job

YouTube - Day Trading ES 18th October.avi


Can you go into some more detail as to what you look for in the order flow to confirm the trade? Is it based on what you see as resistance in the book in the case of the short? Also, is it absolutely necessary to use orderflow to take such a trade or could one drop to a smaller time frame such as a smaller tick chart and watch price action? Or would that provide a later entry?

David

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  #480 (permalink)
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Help !!!


Hi, cunparis, i use your indicator on NT 6.5

Big thanks to you for that!

but i have not sound alert!!! i'am using range bars,

can you help me?

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