Looking for a good visual indicator that will show buy-sell pressure

[Traderbeauty]

Hello Friends.

 

Many times I get a signal to enter ( using either navi or asc on either renko spectrum 1-1 or 2-1) but then the market participants are not cooperating lol.

 

for example- I have a perfect fib and price action to go long and I get the signal but then I look at the buyers - sellers and I see a huge amount of sellers so I will either hold my long entry or enter a tick or two bellow (ES only ).

 

Here is a picture of what I currently use-the top indicator as you can see is acme volume balance which if i am not mistaken gives us the market entries.The second one- at the bottom is Gom Delta Volume which gives us the limit orders.

 

A good example is in both images at the bottom- you can see that there was an excellent place to short but then the two indicators saved my butt and told me that even though the conditions are perfect, location is good but... other do not think as i am and are buying so going short would have ended with a loss( depends where the stop was obviously).

 

I want to know if any of you can direct me to any other VISUAL METHOD or Indicator that can be easily viewed and will act as a last second filter to enter or not to.

 

Every opinion will be thanked in advance.

 

Thank you all

 

Traderbeauty-Jane

 

http://i.imgur.com/lgNOIxG.jpg

 

http://i.imgur.com/xcmESqK.jpg

 

http://i.imgur.com/od1Odyn.jpg

[admis]

Looking for a good visual indicator that will show buy-sell pressure

Hello Friends.

 

Many times I get a signal to enter ( using either navi or asc on either renko spectrum 1-1 or 2-1) but then the market participants are not cooperating lol.

 

...

 

I want to know if any of you can direct me to any other VISUAL METHOD or Indicator that can be easily viewed and will act as a last second filter to enter or not to.

 

Every opinion will be thanked in advance.

Thank you all

 

Traderbeauty-Jane

Did you start to look for a Grail?... All over the world research are carried, worth millions $, to find this answer...

 

Some basics and definitions:

 

• Ask Traded vs Bid Traded Volume - Volume that trades at the ask price is considered buy volume, while volume that trades at the bid is considered sell volume
  
• Up Tick vs Down Tick Volume - Volume that trades on or subsequent to an up tick is considered buy volume, while volume that trades at or subsequent to a down tick is considered sell volume.
  
• Ask Traded vs Bid Traded Trades - Trades at the ask price is considered buy trades, while trades at the bid is considered sell trades. The value shown is # of trades (ticks), not volume.
  
• Up Tick vs Down Tick Trades - Trades on or subsequent to an up tick is considered buy trades, while trades at or subsequent to a down tick is considered sell trades. The value shown is # of trades (ticks), not volume.
  

Reading many posts in the past I found, that quite a lot of members have an incorrect assumtions related to the datafeeds and trading software (in this case NT). Simply saying - too idealistic and optimistic in the comparison to the reality...Most of us (if not all) are on the retail level - for sure, not institutional level.

 

IMHO, instead of trying to give you some hints, let's better start from reading the below stuff:

First of all - I know, you're using IB datafeed, so pay attention:

A Note About Interactive Brokers' Data Feed

 

Finally, please don’t rely on any of the indicators in this pack if you rely on Interactive Brokers’ data feed. Their tick data is compressed, rolling several transactions into one tick with estimated volume. In our testing we’ve found their feed to be very fast, the data is simply not precise enough for calculating volume deltas.

 

Calculating Volume Deltas with Up/Downtick vs. Bid/Ask

 

It’s true that Volume Balance and the Volume Breakdown studies can calculate volume deltas with both up/downticks and bid/ask prices. But why choose one over the other? They generally produce very similar deltas, however there are some differences. Some important points to consider:

 

• NinjaTrader 7 does not natively store bid and ask data in such a way that volume deltas can be created from historical data. So bid/ask deltas will only be displayed for periods where you are connected to your data feed and pulling live market data from your provider or during market replay. When bid/ask data is not available for an instrument, such as with spot forex, or when historical deltas are needed, up/downtick evaluation can be used instead.
  
• At times of heavy volume, bid/ask data can lag actual transaction data (more on this topic here A:(http://www.ranchodinero.com/2012/02/its-still-all-about-the-data/)). This lag can be a problem as these times are precisely when you want the clearest communication of the message that the volume balance or breakdown is trying to convey. By using up/downticks to calculate volume deltas, not tick or transaction deltas, these times of lag are simply no longer a concern.
  
• Volume in the futures markets is now overwhelmingly transacted in small lots and at high frequency B:(http://www.ranchodinero.com/market-studies/tick-by-tick-volume-analysis/), mostly by machines. Large transactions executed at the bid or ask are statistically rare and thus less useful than they were even a few years ago for assessing buy/sell aggression. Up/downtick strategies evaluate all volume, not just volume at the bid or ask. Moreover, while the Acme bid/ask delta calculations include volume outside the bid/ask spread, many bid/ask-based delta calculation strategies ignore this so-called outside volume. We think this is ill-advised light of today’s market mechanics.
  

Want to know even more? Check out this series of posts on price vs. volume C:(http://www.ranchodinero.com/category/price-vs-volume/).

 

 

I'd like to quote here only a part from the A: link, but I encourage you to visit and read all of them:

...

In my opinion, it’s a less than stellar idea for someone with a retail data feed to rely on the bid and ask for evaluating buy and sell pressure. Why? Because the bid, ask and last are actually separate, asynchronous feeds. Many traders assume these three (bid, ask & last) components are all synchronized and are therefore “reliable.”

 

They are reliable, but certainly not synchronized.

 

The bid and ask components of the stream can – depending on how your feed is connected near/at the exchange – lag in times of heavy trading in order to make room for the actual trades (or “last” as it’s called). Again, from ZenFire quoted by Ray from NinjaTrader:

 

"There are different connect points that may throttle the update of the bid/ask in order to make room for all the trade updates. For colocated machines and in special cases we may give a trader direct connect points knowing they won’t buffer and get behind. Internet users can’t typically keep up and their last trade price becomes stale if they try to pull in the market depth updates. With little importance being placed on the market depth and focus on the last trade, more users can keep up with volatile conditions."

 

 

[⭐ klhk]

dear admis, it's always great to have you to pull us back in reality, especially not to overlook certain crucial constraints that lead to unrealistic assumptions and inevitable financial losses. thank you so much!

[Traderbeauty]

Hi Admis

WOW

What an answer :).

I was waiting for just a name of an indicator and instead i got such a thorough explanation- Thanks so much.

I DO NOT use IB data - just their executions.I use CQG through AMP futures ( cheapest you can find now $15 per month ).

I did try to trade the CL for few month because the ES was hardly moving causing too much chop and congestion.

Now with the ES volatility back to normal I can trade my usual price action way .

These two simple visual indicators are saving me in so many occasions i cant even remember- just by showing me if right now there are buyer/ sellers and the approximate amount.

During LIVE time ( not playing with replay ) I have to make a quick and final decision whether to go in or hold and these two help a lot.

I cannot use complicated and composed indicators because I am watching too many variants at the same time so trying to watch ****** or even bookmap or any of the other tools that show the actual number of bid and ask etc is just beyond to my senses while just looking for simple green or red and the size gives me my answer.

True- many times it deceives me - for example- i would like to go short at a certain resistance and I see a lot of buyers- I wait on the sideline and then the market drops leaving me behind really pissed off lol.- but that is not the indicator's fault- apparently what happened was that buyers TRIED to buy into the resistance and once they did not succeed they immediately reversed direction and got out of their long position causing the market to drop.But as you said- nothing is perfect and we need to weave our way through the drops...

I will go to the links you posted and read everything there- maybe the answer is that i can get better results just by changing the settings on these two indicators.

Thanks again.

Jane

[diabouncer]

this is an interesting topic. have you reached any conclusions as yet jane? on reading your post, admis' suggestion is exactly what came to mind for me as well. and it is interesting to watch the same chart with both up/dn and bid/ask acme balance :)

 

please share your thoughts further on this thread.

[wcicom]

Hi Jane,

 

admis is correct. The way data is delivered makes it very difficult to get a good read on volume analysis. Most of retail "trapping" takes place during the first 45 - 60 minutes, the rest of the day, especially if we happen to have a trending Market, is simply managed based on levels where most of the retailer traders tried to pick tops or bottoms. Those levels are patiently defended all day until late in the day when most small traders just throw in the towel and cover at the market.

 

Volume means different things in futures than it does in equities for obvious reasons, large volume alone does not mean much in ES, you can see how late in the day huge size trades and many times hardly moves the price - zero sum game. I never understood why it would be important to watch large volume blocks in futures, after all for every large buy there is an equally large sell and vice versa. And quite often passive players prevail.

 

It is nearly impossible to forecast direction based on simply large volume in something like ES. But, what is possible, and that takes some fancy programming, is to identify levels and times where herd of retail traders picked their spots to try to fade the trend, and that information is a lot more valuable than simply a few large whales slugging it out :)

 

Good luck,

[Traderbeauty]

Trading is art- its more like playing chess against many opponents.

You cannot decide on one direction and lose all sight of other events that are happening at the same time.

Market is alive and changing and you have to watch for every sign and keep up with the direction.

I will post some simple trades tomorrow that will explain and show how simple trading is when you know what to look for and how to decipher the moves.

Going to do ES only.

Jane

[Gladiator858]

Hi Jane,

 

I use OFA to pinpoint area of entry and stop. As you know, OFA compares bid/ask volume diagonally and comes up with colors based on strength/weakness in the print. At an import decision point, I use the tool to find out who is in control, where they got that control and where they are likely to go. Please look at following example:

 

http://i.imgur.com/FTiIQkJ.jpg

 

No trade at 51.75

Almost no trade at 55.75, but sellers stepped in and gave an entry

 

http://i.imgur.com/PUhHzjV.jpg

[Traderbeauty]

Gladiator- That is a great example so thanks a lot for sharing.

I use renko spectrum 1-1 4-1 and 8-2 to trade and my entries are on the 1-1 so for me using 5 minutes is kind of so different- maybe i should look into.

I don't like minute charts because they dont respond fast enough to the market moves- i believe that time has nothing to do with the market.Sometimes a certain move will take hours while on a higher volatility same move will take few minutes so what do you do ? what time frame you use ?. But again- i will test the 5 min chart.

I plan to post some examples tomorrow and i would be thrilled if you can compare them to your charts and see if we have confluence and agreement.

Take care and thanks again.

Jane

[⭐ flipper26]

@Gladiator, that's a nice looking OFA chart, would you mind sharing your template? Thanks

[comeinvest]

Hi Jane,

 

I use OFA to pinpoint area of entry and stop. As you know, OFA compares bid/ask volume diagonally and comes up with colors based on strength/weakness in the print. At an import decision point, I use the tool to find out who is in control, where they got that control and where they are likely to go. Please look at following example:

 

http://i.imgur.com/FTiIQkJ.jpg

 

No trade at 51.75

Almost no trade at 55.75, but sellers stepped in and gave an entry

 

http://i.imgur.com/PUhHzjV.jpg

 

mind to share how to plot OFA on ES continuous contract, i have tried but it's still required tick data ( it doesn't tick at all after i open my ES continuous chart). hope you could give me some advice. Thx

[Gladiator858]

I use DTN IQ feed and data type =1 when adding OFA bar type.

[comeinvest]

I use DTN IQ feed and data type =1 when adding OFA bar type.

 

thanks for replying on the OFA bar on continuous contract, else i'm still struggling here. Apart from that, could you to do me a favor. Can you help me check whether 6E symbol is available on your IQFEED connection in CME exchange server. I know it's a silly question but i have tried to search for 6E using symbol guide/look up function at DTN IQFEED website but i couldn't find any match on 6E except M6E ( micro contract ). I'm asking this question because i intend to sign up for IQFEED. Hope you can help me. Thanks in advance.

[Gladiator858]

6E is available, IQ symbol is @EU#C

[k33]

Hi Traderbeauty,

 

what you are looking for might be gomi cumulative delta/acme volume breakdown. You need an unfiltered feed for this, of course. CQG does deliver that, Rithmic/IQ-feed, too.

[Traderbeauty]

Hi Traderbeauty,

 

what you are looking for might be gomi cumulative delta/acme volume breakdown. You need an unfiltered feed for this, of course. CQG does deliver that, Rithmic/IQ-feed, too.

 

Thanks K33

Should I use the COM CD ? or GOM CDHD ?

Testing all three will feedback tomorrow.

[k33]

Gomi tools are fine, the two indicators differ by the bartype used.

[v777]

if your not using iqfeed then anything else put 2 - in data type = 2 your back fill data will not have correct historical bid/ask but moving forward you should

 

mind to share how to plot OFA on ES continuous contract, i have tried but it's still required tick data ( it doesn't tick at all after i open my ES continuous chart). hope you could give me some advice. Thx

[comeinvest]

if your not using iqfeed then anything else put 2 - in data type = 2 your back fill data will not have correct historical bid/ask but moving forward you should

 

thanks for your feedback but seem like my broker feed CQG continuum will not tick for continuous contract. so i won't be a able to load OFA using my broker feed unless i'm using IQFEED

[diabouncer]

yes i don't think it will but why can't you use the current contract rather than the continuous contract symbol?