 Gold Customer
Joined: 11/11/2006
Posts: 359
|
To further the knowledge base surrounding volume and its applications (AND therefore saing Western Civilization) I have taken the opportunity lately to re-visit Thomas N. Bulkowski and see his comments.
Relative to volume, some of the authors trading books on my shelf discount volume completely. Never glance at it. Some use it as a screen for stock consideration (Must have minimum amount to be considered. Some as O'Neil, "Volume is key."
However, back to matters at hand---------
Bulkowski's research has found that :
Broadening tops and bottoms: " Upward Breakout on light volume do better"
Trendlines: " Upsloping trendlines with HEAVY volume on breakout day had larger declines than those with light volume ( (39%vs36%). Downward sloping trendlines with light volume breakout had larger rise (39% vs36%)"
High tight Flags : "Breakout volume equal to or less than 30 dav average do better (79% vs 63%)"
Pipe Bottoms: "Volume HEAVIER on left than right do better".
Inverted and Ascending Scallops: "Breakout volumes greater than 30 day average have larger gains. Patterns with rising volume do better post breakout."
3Rising Valleys: Patterns with BELOW average volume tend to perform better (53%vs38%) 76% will break out on high volume
Rounding Bottoms: No comment on breakout volume
Descending Traingle: " Above average breakout day volume tends to push prices higher.(36%vs33%)
Ascending broadening wedge: No breakout volume comments.
Eve and Eve Double bottom: "Double bottoms with heavier volume on right then left do better post breakout.(43% vs 39%)"
Triple Bottom: No comment on breakout volume .
Head and shoulder Bottom: "When volume higher on R Shoulder than left, HSB tends to out perform (40%vs30%)
Are there conclusions to be found here? Are there sitluations where "high breakout volume is Necesary"
It would appear that sometimes it isn't even desireable. It would appear that in the best case, high volume breakout is nice to have, but is it a deal breaker? Are the differences enough to make or break the trade? Would this be one of the axioms we should always question.
Of course, one can find almost anything he looks for in a chart. There are certainly stocks with large gains on unimpressive volume. Or large losses with unimpressive volume. And, of course, one can find stocks that broke out and went up on high volume. There are both there to be seen.
Comments? Questions? Standing Ovations?
Mammon
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
You are correct Mammon, Volume is a fickle mistress and not to be trusted. I use it as a cumulative gage for accumulation patterns. I have already conceaded in past discussions that my theories might not be right on target. But I am happy with the returnes that trusting these patterns has brought to me.
I think that your statments above deserv a standing "O" 
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
Well as I have said in the past, volume in itself taken from the EOD isn't of much help EXCEPT to see the amount of participation. You know, lots of those books and concepts are a thing of a past century. The markets we trade nowadays are certainly a different beast, and the participants mostly at the intutional level have much more sophisticated tools.
I have been playing lately with a new volume concept of which I have spoken to you in the past.
Would you be more interested in knowing who is buying or selling (accumulating or distributing) the stock, or whether a particular pattern is being formed.
Lets look at this interesting case which I have been looking as of late - the case of the Automakers.
While lots of folks are saying the automakers are at a levels in which they should be accumulated what is the last word on the big players. Yes they know more than you do. Look at this.
What is it telling you? Should you accumulate GM, F, or TM. Who is accumulating what, and who is doing it - the little guy or the big guys?
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
I like what I see Bigblock. I have looked at TM and can see things that there is no need to didcuss as it would only lead to unneccassary debate. Lets just say that my data matches what you are showing us here with Toyota.
I am not sure if you will be able to share the origin on this forum, but if you can pass the info onto Agm32, then he can pass it onto me via private message (he will know how) then I would love to sign up.
I spent money on VSA lessons, I am looking foward to this as well...
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (Apsll) I like what I see Bigblock. I have looked at TM and can see things that there is no need to didcuss as it would only lead to unneccassary debate. Lets just say that my data matches what you are showing us here with Toyota.
I am not sure if you will be able to share the origin on this forum, but if you can pass the info onto Agm32, then he can pass it onto me via private message (he will know how) then I would love to sign up.
I spent money on VSA lessons, I am looking foward to this as well...
Apsll as I mentined to you I am in the preliminaries of implementing this on Stockfinder as well as Amibroker, and possibly other platforms as tradestation, and such.
I am still working on the updates for the current web site, as well as building a new one, not to mention advertising. Everything is far behind, and I am trying to catch up.
The web sites will be finished first, and then we will move on to building the blocks forum, an then I will get to finish this - like I said I am hoping for the spring.
The algorithm is working as you can see in raw form.
As far as sharing info via private message or e-mail or such regarding this at this point will not be possible.
There is nothing ready anyways, and I am trying to keep my outside contact to a minimum. It is already hard enough to be able to trade, while jigling all of these tasks, and keep an eye on the guys.
I keep you posted as things evolve. I just wanted to give everyone a taste of it. Be patience please.
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
I am in no hurry. Just thought it was ready. I can wait....
|
|
Registered User
Joined: 9/25/2007
Posts: 1,506
|
BB ....
I assume that this is based on the premise that the larger players are the "smart money" ... and the samller ones are the "not so smart money" ...
Is that right ?
The reason for my curiosity is this ...
Many of these institutions are so big and gawky that it takes them months ... if not years ... to unwind positions ....
And just as your chart of Ford shows the large players in distribution ... they've also ridden this postion down from nearly $40/share ... i.e. when your positions are gargantuan, you can't get out in any timely manner without driving the market down on yourself ...
I guess what I'm getting at here is ... the delineation between bigger players and smaller players might be more clear ... than just how "smart" the big players are ...
Case in point ... look at Meredith Whitney, the Chief Investment Strategist for Oppenheimer ...
She did one helluva job of calling this thing to a tee ... and even just a month or so ago saying that the trouble isn't over for the banks ... another good call ...
So ... you would expect to see pretty good perfornance from the Oppenheimer Funds ... right ?
Not at all ... as they got their butt kicked, in general, at least as bad as the averages ...
|
|
Registered User
Joined: 3/14/2005
Posts: 25
|
Bigblock: looks a lot like Pascal Villain' s theory in his book :Value In Time! i think Pascal said you'll need a room full of computers to implement. Hard reading , at least for me?
|
|
Registered User
Joined: 12/5/2008
Posts: 81
|
Bigblock where is the cut -off volume measure for a small player vs. a large player?
eg. Are the small players considered those who trade 10000 shares or less or what?
|
|
Registered User
Joined: 12/31/2005
Posts: 266
|
QUOTE (mammon) To further the knowledge base surrounding volume and its applications (AND therefore saing Western Civilization) I have taken the opportunity lately to re-visit Thomas N. Bulkowski and see his comments.
Relative to volume, some of the authors trading books on my shelf discount volume completely. Never glance at it. Some use it as a screen for stock consideration (Must have minimum amount to be considered. Some as O'Neil, "Volume is key."
However, back to matters at hand---------
Bulkowski's research has found that :
Broadening tops and bottoms: " Upward Breakout on light volume do better"
Trendlines: " Upsloping trendlines with HEAVY volume on breakout day had larger declines than those with light volume ( (39%vs36%). Downward sloping trendlines with light volume breakout had larger rise (39% vs36%)"
High tight Flags : "Breakout volume equal to or less than 30 dav average do better (79% vs 63%)"
Pipe Bottoms: "Volume HEAVIER on left than right do better".
Inverted and Ascending Scallops: "Breakout volumes greater than 30 day average have larger gains. Patterns with rising volume do better post breakout."
3Rising Valleys: Patterns with BELOW average volume tend to perform better (53%vs38%) 76% will break out on high volume
Rounding Bottoms: No comment on breakout volume
Descending Traingle: " Above average breakout day volume tends to push prices higher.(36%vs33%)
Ascending broadening wedge: No breakout volume comments.
Eve and Eve Double bottom: "Double bottoms with heavier volume on right then left do better post breakout.(43% vs 39%)"
Triple Bottom: No comment on breakout volume .
Head and shoulder Bottom: "When volume higher on R Shoulder than left, HSB tends to out perform (40%vs30%)
Are there conclusions to be found here? Are there sitluations where "high breakout volume is Necesary"
It would appear that sometimes it isn't even desireable. It would appear that in the best case, high volume breakout is nice to have, but is it a deal breaker? Are the differences enough to make or break the trade? Would this be one of the axioms we should always question.
Of course, one can find almost anything he looks for in a chart. There are certainly stocks with large gains on unimpressive volume. Or large losses with unimpressive volume. And, of course, one can find stocks that broke out and went up on high volume. There are both there to be seen.
Comments? Questions? Standing Ovations?
Mammon
one of the few technical analysis books i've ever bought. i don't reget it.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (realitycheck) BB ....
I assume that this is based on the premise that the larger players are the "smart money" ... and the samller ones are the "not so smart money" ...
Is that right ?
The reason for my curiosity is this ...
Many of these institutions are so big and gawky that it takes them months ... if not years ... to unwind positions ....
And just as your chart of Ford shows the large players in distribution ... they've also ridden this postion down from nearly $40/share ... i.e. when your positions are gargantuan, you can't get out in any timely manner without driving the market down on yourself ...
I guess what I'm getting at here is ... the delineation between bigger players and smaller players might be more clear ... than just how "smart" the big players are ...
Case in point ... look at Meredith Whitney, the Chief Investment Strategist for Oppenheimer ...
She did one helluva job of calling this thing to a tee ... and even just a month or so ago saying that the trouble isn't over for the banks ... another good call ...
So ... you would expect to see pretty good perfornance from the Oppenheimer Funds ... right ?
Not at all ... as they got their butt kicked, in general, at least as bad as the averages ...
I think you are assuming too much. I have no idea who is smart or not. All I can do is measure the size of their trades. If you measure the trades by the smarts of the traders, I must say that there are a bunch of fools in those markets at all kinds of levels.
I disagree that it would take months for a Institution ot unload a position. Do the math.
Also your steering theory works mostly under fast evolving markets mostly accentuated by a downtrend.
Ask yourself - why is it that investors in general lose in a BEAR market?
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (klynn55) Bigblock: looks a lot like Pascal Villain' s theory in his book :Value In Time! i think Pascal said you'll need a room full of computers to implement. Hard reading , at least for me?
Pascal is a friend of mine. I haven't read his book yet although I keep in touch with him, and at some level we all have been working on the same concept.
It is funny, I told Pascal that he stole my idea. But hey there were probably hundreds or thousands thinking about the same thing at one time or another.
The important thing is that it is going forward.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (Tootsie) Bigblock where is the cut -off volume measure for a small player vs. a large player?
eg. Are the small players considered those who trade 10000 shares or less or what?
Tootsie, tootsie if you just gave it a little more though before you asked.
None is true. It is based on average daily volume. What good would it do to have a fixed value? Stocks have all kind of different volume averages.
Would a 10000 shrs measure be as valid on a stock trading 50000 shrs?
|
|
Registered User
Joined: 9/25/2007
Posts: 1,506
|
OK then ...
Allow to try again ... and to assume nothing ...
Your charts show the divergences in activity between "small players" and "large players" ...
How is this information useful ?
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
so in a nut shell LOW volume was the better performer on most patterns? I'd buy that.. would it depend on market enviroment?
For example Dan Zanger talks allot about big volume on the move you participate being key.. and he made the sort of money I've not even considered making.
But my own first few years making strong volume requirements on entry signal are mixed results.. that may have had more to do with the actual underlying enviroment than anything technical.
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
My accumulation scans that have been hanging around for a while show exactly what Bigblocks charts are showing; that Toyota is being accumulated. It is nice to know now that I have some confirmation in my scans abilities...
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (Apsll) My accumulation scans that have been hanging around for a while show exactly what Bigblocks charts are showing; that Toyota is being accumulated. It is nice to know now that I have some confirmation in my scans abilities...
Could you please show how it is that your scans while reading EOD are showing the same I have shown from reading intraday data at the exchange level?
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
I have showed my scans many times and you do not agree with my conclusions, yet they lead me to same convictions than that of yours. In my opinion you do not need to seperate the wheat from the straw as long as the wagon is full then the players are there.
I will not argue the point as this will lead us no where. the very fact that your conclusions support mine is good enough for me. Thank you for you efforts in this matter...
|
|
Registered User
Joined: 12/5/2008
Posts: 81
|
QUOTE (BigBlock) QUOTE (Tootsie) Bigblock where is the cut -off volume measure for a small player vs. a large player?
eg. Are the small players considered those who trade 10000 shares or less or what?
Tootsie, tootsie if you just gave it a little more though before you asked.
None is true. It is based on average daily volume. What good would it do to have a fixed value? Stocks have all kind of different volume averages.
Would a 10000 shrs measure be as valid on a stock trading 50000 shrs?
BB-Bigblock, it seems to me that you are the one not giving this enough thought.
What do you mean by what good would it do to have a fixed value for small traders vs. large traders?
You have to start somewhere in order to distinguish the difference between the average small trader
and the average large trader. If you were to give this a little more thought you would realize that
most small traders are not going to be able to trade higher than a certain volume level. So all
I am asking is where is that cut off point? There has to be one. And, of course it would be an average
cut off point. But, nevertheless, it would still be a fixed number. Geeezzz!
|
|
Registered User
Joined: 7/1/2008
Posts: 889
|
The good thing about the futures market is that this info is very easy to obtain with the COT (committment of trade) reports. It separates open interest among commercials, large speculators, and small speculators.
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
in the end the issue is can you unload your holding when you need to.
things that I have found that help.
greater than 100K traded for the last 20 days. Since I trade a tiny fraction of that it generaly helps.
Optionable stocks tend to be more liquid.
larger Cap stocks can be easy to unload BUT smaller cap often move better. I think with EOD data for the most part you probably can find LONGER TERM accumulation. It is subtle and difficult at times.
But in many markets perhaps we don't need to outsmart or figure out the smartest traders out there. there are plenty that aren't that smart but move big blocks and perhaps we can use theri weight to their dis advantage.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (Tootsie) QUOTE (BigBlock) QUOTE (Tootsie) Bigblock where is the cut -off volume measure for a small player vs. a large player?
eg. Are the small players considered those who trade 10000 shares or less or what?
Tootsie, tootsie if you just gave it a little more though before you asked.
None is true. It is based on average daily volume. What good would it do to have a fixed value? Stocks have all kind of different volume averages.
Would a 10000 shrs measure be as valid on a stock trading 50000 shrs?
BB-Bigblock, it seems to me that you are the one not giving this enough thought.
What do you mean by what good would it do to have a fixed value for small traders vs. large traders?
You have to start somewhere in order to distinguish the difference between the average small trader
and the average large trader. If you were to give this a little more thought you would realize that
most small traders are not going to be able to trade higher than a certain volume level. So all
I am asking is where is that cut off point? There has to be one. And, of course it would be an average
cut off point. But, nevertheless, it would still be a fixed number. Geeezzz!
Geeezzz, what don't you understand Tootsie? It isn't a fixed number. It is dependant on a percentage, and the percentage is dependant on the activity. It adapts.
I suppose this is beyond you line of though or comprehension.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (realitycheck) OK then ...
Allow to try again ... and to assume nothing ...
Your charts show the divergences in activity between "small players" and "large players" ...
How is this information useful ?
The bigger key is between the large players and the equity.
It is well known that "institutions" have the resources, connections, and future knowledge to know ahead.
Whole departments dedicated to the research, investigation, and survaillance of an specific target. That includes insiders, high rank acquaintances, and lobbying groups.
They also have whole departments dedicated to the trading operations which include basically unlimited funds for price fluctuation and even manupulation.
You must take note if large players are cough showing accumulation while an equity is declining, and of course viceversa. It gets interesting in the way to earnings reports.
|
|
Registered User
Joined: 12/5/2008
Posts: 81
|
Bigblock, maybe this thing is beyond your comprehension.
In order to accomplish what you want to accomplish, I would think that intraday, you would want to
find all ticks that fall below a certain "fixed average volume" and all ticks thatrise above that "fixed average
volume" for small traders vs. large traders. Each of those ticks for the small traders could then be
graphed (plotted) on its own separate line and likewise the same can be done for the ticks that
represent the larger traders. Are you sure that those are your graphs above?
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (Tootsie)
Bigblock, maybe this thing is beyond your comprehension.
In order to accomplish what you want to accomplish, I would think that intraday, you would want to
find all ticks that fall below a certain "fixed average volume" and all ticks thatrise above that "fixed average
volume" for small traders vs. large traders. Each of those ticks for the small traders could then be
graphed (plotted) on its own separate line and likewise the same can be done for the ticks that
represent the larger traders. Are you sure that those are your graphs above?
Not really, now that I think about it - they must be yours. From now on you are in charge. I will let you know when the product is ready for stockfinder.
|
|
Registered User
Joined: 12/28/2006
Posts: 2
|
Interesting.
|
|
|
Guest-1 |