Chisy,
Don't know anything about Mark Leibovit and Volume Reversal Theory. Doesn't mean it isn't good. Arms has done some work with volume that's fun to look at and might be of value.
But I've never found an indicator that measured the internal psychology of trading volume. Remember volume is antidotal it's way down the food chain of information about market direction or strength.
Hoping da_cheif's CLX offers an insight. I'm fascinated to see if this OBV type method he's sharing can be of use in measuring volume changes. I also wonder if this character is Wolanchuk, or just has a subscription to DW's hot line....?
I look at charts this way:
First a trader gets an idea..., (Good or Bad), <smile> then they pick up the phone..., then the market reflects that purchase by moving the chart bars, then the volume and open interest, etc gets collected. Volume is way down the ladder. This is particularly true of the Index and futures markets.
So if one wants to understand what's happening, it's in the Individual Bars of any time frame. Volume studies have always been kind of difficult for me to grasp.
IMO the more I look at technical charts the less I believe the markets move on economic, news or basic fundamental conditions. Markets move on traders psychology, and this first impulse can be measured. Good trading is about projecting forward in time and price, and knowing what to do when the market gets there.
Bar patterns reflect those moods and charts also project directions both in time and price, but you've got to measure the psychology of the players. |
