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

  #531 (permalink)
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Fat Tails View Post
I have played a little, and here is a first version called anaBetterVolumeX, which can be used on

- range charts
- volume charts
- tick charts
- and maybe other charts

The X stands for experimental, it is not yet a final version.

This is what I did

- volume was replaced with volume per bar time (this indicates the pressure)
- range was replaced with range per bar time (this indicates the intra-bar momentum)

The low volume alert sound will only play on minute charts. For other bar types this will be added, once I have modified the bar timer, which is used by the indicator.

WANTED: A fearless trader to test it.

Indicator file is attached.

Hi FT,

Thanks again for the experiment. I am currently using your better volume indicator (min) in my daily trading as a confirmation indicator. I wanted to compare the output of better Vol X vs better Vol on a 12R and 5 min chart of CL. IMO and according to what my eyes are telling me, on the chart with the better Vol X there are too many signals (even more if I use a 6R). I am interested in change or end of trends therefore I kept the bars that are giving me these kind of signals (the rest is set to transparent, makes easier to locate things):

Breakout or Climax deep sky blue
Churn Yelllow
Climax churn Magenta
Low volume White

As you can see from the picture below, in the first chart CL R12 with Better Vol X it is much more difficult to take a decision, whereas in the 5 min chart Better Vol I can clearly identify 3 areas where I have a confirmation.

For my style of trading I consider the Better Volume used with minute charts much more spotty and reliable.


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  #532 (permalink)
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redratsal View Post
Hi FT,

Thanks again for the experiment. I am currently using your better volume indicator (min) in my daily trading as a confirmation indicator. I wanted to compare the output of better Vol X vs better Vol on a 12R and 5 min chart of CL. IMO and according to what my eyes are telling me, on the chart with the better Vol X there are too many signals (even more if I use a 6R).

As you can see from the picture below, in the first chart CL R12 with Better Vol X it is much more difficult to take a decision, whereas in the 5 min chart Better Vol I can clearly identify 3 areas where I have a confirmation.

For my style of trading I consider the Better Volume used with minute charts much more spotty and reliable.

I absolutely agree with you. The basic problem here is that the range chart does not catch the acceleration that takes place during a climax. The 5-minute chart displays one wide ranging bar, whereas the range charts divides this bar into a lot of standard range bars.

I tried to compensate this by displaying volume traded per time unit and use momentum instead of the range. What I cannot change is the dispersion of the high volume event over several bars, which the range chart will always display instead of the one climax bar on the 5 minute chart.

Maybe there is a way of using an adaptive moving average with a variable period depending on the time stamps of the range bars. Adding a time filter, such as 5 min could eventually solve the problem. Or shall I give up after the first trial?

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  #533 (permalink)
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Fat Tails View Post
I absolutely agree with you. The basic problem here is that the range chart does not catch the acceleration that takes place during a climax. The 5-minute chart displays one wide ranging bar, whereas the range charts divides this bar into a lot of standard range bars.

I tried to compensate this by displaying volume traded per time unit and use momentum instead of the range. What I cannot change is the dispersion of the high volume event over several bars, which the range chart will always display instead of the one climax bar on the 5 minute chart.

Maybe there is a way of using an adaptive moving average with a variable period depending on the time stamps of the range bars. Adding a time filter, such as 5 min could eventually solve the problem. Or shall I give up after the first trial?

It was not my intention to hijack the experiment, I just feel satisfied with the better volume on a 5 min chart although I use Range charts for my PA,TL and Fib setups. As Dr Gary mentioned in his webinar too much information doesn't necessary lead to a better trading.

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  #534 (permalink)
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redratsal View Post
It was not my intention to hijack the experiment, I just feel satisfied with the better volume on a 5 min chart although I use Range charts for my PA,TL and Fib setups. As Dr Gary mentioned in his webinar too much information doesn't necessary lead to a better trading.

You did not hijack the experiment, but I got valuable feedback. I agree with your findings.

The indicator has an X for experimental. That means that there is an open end.

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  #535 (permalink)
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and yet another interesting project. once more hut ab.

I tried to overcome my fear and did a little testing.

with my very limited knowledge, I believe both indicators plot the same thing on a time based chart. attached a 5 min chart. on the better renko chart, I actually had more signals with the original better volume. but not really a big difference.

either way, I believe it's still valuable information you get. panel 3 original indicator and panel 2 is the new one.

Attached Thumbnails
How to use volume in your trading-6e-06-11-5-min-4_13_2011.jpg   How to use volume in your trading-6e-06-11-3-betterrenko-4_13_2011.jpg  

Last edited by Silvester17; April 14th, 2011 at 10:25 AM.
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  #536 (permalink)
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Silvester17 View Post
and yet another interesting project. once more hut ab.

I tried to overcome my fear and did a little testing.

with my very limited knowledge, I believe both indicators plot the same thing on a time based chart. attached a 5 min chart. on the better renko chart, I actually had more signals with the original better volume.

either way, I believe it's still valuable information you get. panel 3 original indicator and panel 2 is the new one.

Hi Silvester,

You are right Better Renko seems to show less signals vs Range but yet it's not simply a question of quantity but quality signals related to the chart view and timing. I guess my eyes and mind are used to the traditional better volume.

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  #537 (permalink)
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redratsal View Post
Hi Silvester,

You are right Better Renko seems to show less signals vs Range but yet it's not simply a question of quantity but quality signals related to the chart view and timing. I guess my eyes and mind are used to the traditional better volume.

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yes, agreed. quality is what I'm seeking as well.

still interesting, for the confirmation I'm looking for, I get many good quality signals from both version.

so my conclusion, we have 2 winners here.

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  #538 (permalink)
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Silvester17 View Post
yes, agreed. quality is what I'm seeking as well.

still interesting, for the confirmation I'm looking for, I get many good quality signals from both version.

so my conclusion, we have 2 winners here.

Yes I agree, better to test it on the market and not focus on a screen shot. Look forward for further feedbacks

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  #539 (permalink)
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my very favorite setup.

and I got confirmation with both versions.

Attached Thumbnails
How to use volume in your trading-6e-06-11-3-betterrenko-4_14_2011.jpg  
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  #540 (permalink)
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Silvester17 View Post
my very favorite setup.

and I got confirmation with both versions.

But honestly, in the sub-minute region the signals are not reliable. Everything that goes below 3 minutes is questionable. What I will try to do, is to produce an indicator version, which takes the signals from a 3 minute or 5 minute rolling timeframe and displays them on the chart.

The rolling element, however, may produce mountain like formations of three bars as it shifts through time.

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