Example of the relationship between "smart money" and the disparate masses,

[zrrsys]

@zrrsys

The theory behind OBV is based on the distinction between smart money – namely, institutional investors – and less sophisticated retail investors. As mutual funds and pension funds begin to buy into an issue that retail investors are selling, volume may increase even as the price remains relatively level. Eventually, volume drives the price upward. At that point, larger investors begin to sell, and smaller investors begin buying.

[frandlost]

volume may increase even as the price remains relatively level.

Used to think this was true in forex as many do including some authors and “room traders”.

I not sure this is the case in forex. As it applies to equity markets, futures etc… yes.

It’s my understanding that this action you describe is the smart $$ shaking out the retailers and will start to move the market higher after a low volume test.

That’s my understanding fwiw.

YMMV…

I’m flat with 2 eyes on the same side,

KC

[frandlost]

as long as you don’t keep buying when price keeps falling, or keep selling when price keeps rising, you will not be trying to go against the “smart” (big) money.

I would say that’s hidden holy grail in plain site!!

Truly well spoken!!

KC

[frandlost]

I wish I’d been short.

@ 6 foot 2" I’ll never be short.

[frandlost]

Livermore was born in Shrewsbury, Massachusetts to a poverty-stricken family and moved to Acton, Massachusetts, as a child.

This is right near me!!! I never knew!!

KC

[peterma]

There’s something special about Livermore - maybe the Massachusetts air

Seriously, if you check out the paragraph entitled Publications and works.

That book in 1939 is filled with knowledge - it was his last challenge, the market had become almost boring, it seemed as if he could make and lose a fortune at will.

Sadly even meeting that challenge didn’t bring peace of mind.

[zrrsys]

Used to think this was true in forex as many do including some authors and “room traders”.

the thread is not about volume but how price takes a detour before going the usual way

[frandlost]

Sorry @zrrsys , you had referred to OBV and it was my impression volume played a role in it’s calculation. Apologies for the misunderstanding.

I have reviewed the thread from the beginning and was hoping you could explain the euphemism “takes a detour before going the usual way”. Are you referring to a pullback or are you referring to a exhaustion candle formation at a top or bottom. Sorry to be such a bone head regarding what seems such a simple topic.

If you could perhaps post an anotated chart that would be great! tx

KC

[zrrsys]

have reviewed the thread from the beginning and was hoping you could explain the euphemism “takes a detour before going the usual way”. Are you referring to a pullback or are you referring to a exhaustion candle formation at a top or bottom. Sorry to be such a bone head regarding what seems such a simple topic.

do not be sorry
it is no problem