How to use volume in your trading

September 18th, 2009, 04:09 PM

One more.

I went long ES on a breakout of the trading range. The breakout bar turned into HVC (we don't know it's HVC until the bar closes). I should have exited on a break of the HVC low but I didn't. wanted to give it room. bullshit. give it room = hope. bad.

I reversed on a breakdown and went short.

The HVC at the end of the day (and the beginning) are not really HVC, it's just the high volume of the open and the close. So keep that in mind..

I'm going to stop posting charts until others post. I don't want to feel like I'm showing off. I think I've given enough examples to show that HVC is very useful. It's up to you guys now. If you want to put in the time to practice and learn to use it I'm here to help.

PS: 3.5 pts on my short and I'm still waiting to cover. Too bad time is running out..

September 18th, 2009, 04:38 PM

Hey guys I used that last chart for an example on another post about trading off a horizontal line. You may find it interesting:

Actually two posts:

trading the line:

NEVER LOSE AGAIN!! - TheRumpledOne

Hey guys I just finished reading the thread and have some comments.

Pier: I once was doing like you, backtesting everything. I first met TRO over a year and a half ago. I didn't know how to trade so I was trying to backtest and automate everything. …

The chart above as an example of trading the line:

NEVER LOSE AGAIN!! - TheRumpledOne

Guys here is a perfect example of trading the line. ES was in a trading range while we were at dinner. We got home at 3:00 ET and I draw lines above and below the trading range. Price went above so I went long. This is like the green rat but I didn't …

I welcome your comments.

September 19th, 2009, 03:55 AM

I posted this chart in my perfect trading thread so if you're interested in all the annotations you may want to see this post.

I'm posting it here because there are two good volume patterns.

There are:

- LV PB - this was a clue that the breakout would be false. Normally I'd take this breakout however in this case I should have been long from the HVC reversal. Before taking a long or short I ask myself I should already be long or short, because if I should already be long then it's risky to take a 2nd setup on the long.

- HVC Reversal - This is when the HVC because a reversal bar. YOu can see there is a hammer and then the HVC bar is an engulfing bar. Those together make this a reversal pattern regardless of volume. But when there is HVC it gives the pattern even more credibility. This is a new pattern for me that I just discovered and I'll be following it closely.

September 19th, 2009, 10:39 AM

Interesting volume pattern from 9/16 Wednesday, look at the area in the rectangle. Let me know if you have questions. See if you can find a similar example in the markets & timeframes you trade.

September 20th, 2009, 03:18 AM

RJay - I think I see a problem in the volume indicator, sorry I didn't catch this earlier I had been focusing on the calculations and overlooked this:

Code

            if(Close[0] > lastClose) {
                upTicks++;
            } else if(Close[0] < lastClose) {
                downTicks++;
            } else {
                evenTicks++;
            }

This is counting the number of upticks & downticks. What we want is the volume of those ticks!

Please try this change and let me know if it works better:

Code

            if(FirstTickOfBar) {
                upTicks = 0;
                downTicks = 0;
                evenTicks = 0;
                lastVolume = 0;
            }
                
            if(Close[0] > lastClose) {
                upTicks += ((long)Volume[0] - lastVolume);
            } else if(Close[0] < lastClose) {
                downTicks += ((long)Volume[0] - lastVolume);
            }
            lastClose = Close[0];
            lastVolume = (long)Volume[0];

One more thing.. Do you think we should change the name of the indicator? The "Better" brand belongs to Barry and I don't want to infringe on that, especially since he sells his BetterVolume for Ninjatrader.

Thanks for all your help.

September 20th, 2009, 03:46 AM

HVC example on the daily chart. We'll see what unfolds on Monday. I wrote about a good trade setup in my weekly S&P thread.

Remember on daily charts I use all the better volume indicator settings (I'm using the original Better Volume for Tradestation). Since I have HVC Climax turned on the bar is purple instead of blue. This is even more bearish than a simple HVC since it's a climax down.

Looking at the chart, there are 5 HVC patterns. 4/5 resulting in a turn, 1/5 was profit taking. HVC on higher timeframes can provide low-risk setups especially when supported by other setups.

September 20th, 2009, 07:49 AM

has anyone thought of candlevolume charts?

September 20th, 2009, 08:37 AM

Question, and if I missed it in the thread apologies.

Do you guys thing volume has any real meaning on a range bar chart?

Pete

September 20th, 2009, 12:44 PM

Peter2150

Question, and if I missed it in the thread apologies.

Do you guys thing volume has any real meaning on a range bar chart?

Pete

I never used range charts until recently, due to their popularlity on this site. I tried it for a while and went back to tick charts and then more recently went to 5min charts. So I can't really say much about volume on range charts but you can give it a try.

What I don't like about range charts is that you're missing important information with the relationship of the open & close. I especially look for doji bars and trend bars. Doji = indecision / trading range. Trend = one side is in control. I don't see that as clearly in range bars. Now some can say this relationship is somewhat artificial because it's determined by # of ticks or time. I agree with that. But for me it's ok.

So be my guest to try it out and post some charts. Try comparing a 5 min with a range chart. Could be interesting.

September 20th, 2009, 12:47 PM

mroalan

has anyone thought of candlevolume charts?

I had to google it, I never heard of that.

Looks pretty interesting. HVC would appear as a fat small candle and low volume bar would appear as a really thin candle. For the moment I'll stick with OHLC and/or candles but I encourage you to play with it.

How to use volume in your trading

Discussion in Traders Hideout

How to use volume in your trading