I use simple On Balance Volume which gives me a quick idea if
there might be a tradable price/volume divergence. I especially look for
sideways price action with rising OBV for longs and reverse for shorts. If OBV
looks interesting, I compare price action with volume action bar by bar. I know
there are zillion price/volume oscillators, however nothing beats reading a
chart bar by bar to get a feel how price is trading against volume.
----- Original Message -----
Sent: Thursday, November 18, 2004 8:51
AM
Subject: Re: [RT] See gif---Just for
fun!
I fooled with volume many, many years ago and
have not used it as I found that it was a detractant. I had worked with
Joe Granville's variation, Mark Chaikin's variation on a theme, Larry
Williams' Variation, Sibbett's Demand Index, along with Aspray's Demand
Oscillator. I have worked with issues and Bolton-Trembly advancing,
declining issues along with Schultz's theory and the ever famous McClellan
Oscillator.
I have looked at key reversal days and other
volume based trading indicators and found them lacking. You seem to use
volume as a supply demand criteria and price as the trading criteria.
Which of the above volume systems do you use? Have you developed a
volume indicator that varies from the above noted?
Because volume was not of use in the system that
I use does not mean it can't be useful for someone else. The only test
of an indicator is if it adds value to your trading decisions.
Thanks for your input and posts they keep one
thinking. Ira.
----- Original Message -----
Sent: Thursday, November 18, 2004 6:41
AM
Subject: Re: [RT] See gif---Just for
fun!
Rakesh,
One indicator I check very carefully when buying retracements is
volume. I want to see volume declining on the retracement and picking up on
any move up. I use On Balance Volume as a very quick guide and then read the
individual volume bars if a security's OBV looks interesting. I generally
don't buy stocks making fresh lows, however were I to consider doing so, I
would want to see a large volume divergence on the new low. I would look for
a setup in three steps: 1) some bars back a big decline on very high volume
(the washout) and 2) several days of decline to a new low on very light
volume, and 3) a move above the high of the low bar on strong volume with a
stop at the low.
DHOM had a washout volume day a few days ago but the price bar was too
tight and barely made a new low so the washout is suspect. Volume has
dropped on the lower lows, however it remains above the typical volume prior
to the washout day. Caution is warranted
VITA has seen increasing volume on the recent down days. Caution is
warranted.
OLGC ditto.
ROIA ditto plus ragged volume.
Not saying that one can't make money here, but these are not the king
of low risk entry which I seek.
Earl
----- Original Message -----
Sent: Wednesday, November 17, 2004
8:54 PM
Subject: Re: [RT] See gif---Just for
fun!
Following look reasonably safe to enter, from a
chart
perspective only. Dont know about their fundamentals.
[1] VITA
[2] OLGC
[3] ROIA
[4]
DHOM
Any
opinions?
Regards
Rakesh