I guess the reason for trying to make a distinction is this;
If big money is simply distributing (letting go of a postion) I think that means – ‘no one is in control’ and price can bounce any which way –go to ranging .
Whereas if big money is actually accumulating short positions then we expect price to go down, and not to just go anywhich way.
How about this…
If big money is accumulating short positions, then they are buying them (buy low)…buying removes supply…when there is less supply and more demand (big money buying) then price increases.
If big money is distributing long positions , then they are selling them (selling high & profit taking)…selling increases supply…when there is more supply and less demand (big money not buying) then price decreases.
Like EnPoint points out…accumulation & distribution is done over a period of time…it’s basically your rangey consolidation phases, so price is not going to generally start increasing or decreasing right away, and is going to go sideways. When big money does start buying & selling in chunks, price does go up or down somewhat accordingly so after each chunk big money waits for price get more favorable again before buying or selling another chunk of their orders/positions until they’re done…then the markup/down phase will begin. As well big money uses other manipulation tactics as EnPoint also mentioned.
My last trade -
Observation 1. The high volume candles were unable to break the top Pivot Point resistance.
Observation 2. Volume was steadily decreasing.
Prediction: If high volume candles couldn’t break it, low volume candles wouldn’t either.
Result: TP Taken.
Two trades here, both profitable. First a high volume up candle, with a short wick. Go long if the next candle breaks the upper wick.
Then a high volume candle with large wick, rebounding off the R1 Pivot Point, go short on candle close.
Too bad I was sleeping for both of these trades :o
not entirely a volume trade, but the high volume on the pin, off of daily trendline - -as a retest - - sounded pretty safe -time will tell.
The major thing going against is the daily is developing as a pin off of daily S-R point.
Maybe I read to much into this stuff- just play the high volume bar, either it’ll win or it won’t???
While checking out your trade, I went short the 15 minute high volume pinbar
Did yours hit TP1 already?
On the 5 min chart, we are getting high volumes on peaks, so I think the outlook is bearish from 1.3380
Yep, I got out with TP1 - just by the skin of my nose.
Then I too went short on that same bar - but I got stopped out.
I think if price breaks below that bar again, I will be in short again? See how it looks!
I’ve been right through this thread, it’s impressive how effective it is, I was doing pretty good before, but putting this in place too nearly makes it like playing pacman, well maybe not, but it’s really good stuff, and it makes sense.
purplepatchforex - I am planning on combining this with your ‘picture’ thread. . is that about what your doing?
I think it would make for a very robust system, have the patience to wait for a great location (your picture) and then verify that location with a high volume background.
At the moment, I am just practicing this volume thing.
We’re sitting on a major weekly resistance line but this has been the strongest weekly gain in a while. I might not place any trades this morning. Waiting to see how the confirmation bar of the upthrust on the 4hr develops. Nothing enticing me on the 15m as well, no clear direction, just some small scalps.
Shot right through the 200ma on the 4hr and daily with wide spreads. This adds to my bullish bias.
I think it’s back of the net, in fact in my ‘Picture’ thread, it doesn’t say much difference to the picture of the first thread on this posting, I call it messy, Petefader calls it accumulation, I call it big move, he calls it distribution.
Hello,
For what it’s worth (and not to complicate matters) but if you’re all really liking the stuff on this thread then here’s something that may be of interest to you (and may possibly enhance what it is that you’re doing):
It’s Bill Williams’ MFI or ‘Market Facilitation Index’ (a part of his ‘Trading Chaos’ or ‘Profitunity Trading System’) and one of his BEST ‘offerings’ in my opinion (if you UNDERSTAND what it is that you’re looking at). This ‘indicator’ (I hesitate to call it an indicator because it does not lag or anything like that) is included with MT4 but it’s real easy to code into any platform (getting the colors right is the most difficult thing). You’ll note that it’s REAL accurate when it comes to indicating turning points.
Anyway: I thought I’d just ‘give it a mention’ is all i.e. it sort of ‘fits’ with this thread.
Regards,
Dale.
I’ve tried to use it before and read too much into it with the colors, trying to catch those turning points and felt like it was just another nuisance. I might try using it again since I have a better understanding of the market now.
Very choppy, but small TP taken on the short.
Every long candle gets pushed down quite heavily, but it keeps stalling. Better to get a small TP than a full SL.
Be careful, it could be Dale overthinking it again 
Hello,
Oddly enough: that’s exactly what I found with the MFI when I started out (while coding it into my platform back then) but if I look at it NOW (which I’ve not done for a LONG time and as a matter of fact only looked at it today again because of this very thread) it makes sense and is pretty darn accurate (well let me qualify that statement by saying that it’s pretty darn accurate with REAL volume as you would have on exchange traded instruments like equities e.g. Citigroup but I just checked it now before posting the above on some forex pairs for you guys and, as an example, those long blue MT4 lines sure do come right at reversal points). Let me note though: I’m by no means a Bill Williams fan and don’t use this or any of his other stuff either but I just thought that it may add value to this thread is all.
And in addition to the above I’ve just posted this (it may also add some value to the thread although I’m guessing that if you’re following this thread then most of it is common knowledge by now):
http://forums.babypips.com/newbie-island/37667-article-use-volume-guide.html
Regards.
Dale.
High volume down candle with large wick at a fib line.
Going short if it breaks the low wick.
TP Taken.
