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Price Volume Analysis Trading with the Essentials

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Old 28-06-2009, 08:03 PM
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bottle Price Action

Here I would like to compile a ready reckoner on price action, from the basic to the exotic.

This first post will contain the list and summary of the topics covered.
  1. The Price Bar
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Old 28-06-2009, 08:03 PM
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grin The Price Bar

We will begin with the basic building block of price action, the price bar. Instead of labelling each bar by its unique charateristic, we can step back and label it in terms of a 'balanced' bar or an 'imbalanced' bar. The concept of balance and imbalance is derived from Market Profile, where a market is described as either to be balanced or imbalanced at one particular period of time based on the collective action of all market participants.

Here is an example of both a balanced and an imbalanced bar.

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Old 28-06-2009, 08:04 PM
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Expanding on Balanced and Imbalanced Bars

Characteristics of a Balanced Bar in terms of Market Profile
  • Equal amounts of buying and selling are present.
  • Market has bought some sort of opposite response to a trend move.

Characteristics of an Imbalanced Bar in terms of Market Profile
  • Either buying or selling is predominant
  • Market is moving higher or lower to find an opposite response

Identifying Balanced and Imbalanced Bars
A balanced bar will have the open and close of the bar in proximity to each other.The size of the body will be usually small, however extremely wide bars with similar characteristic will also be termed as balanced bars. These type of bars can signify end of moves and its useful to remember that large range balanced bars are more likely to happen at bottoms rather than tops.

An imbalanced bar will have moderate to large sized body where the close has moved away from the open of the bar.If the close is formed near the extreme then its a sign of strength in the move for moderate sized bars.
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Old 28-06-2009, 08:04 PM
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Reserved..
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Old 28-06-2009, 08:11 PM
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Originally Posted by JJ View Post
We will begin with the basic building block of price action, the price bar. Instead of labelling each bar by its unique charateristic, we can step back and label it in terms of a 'balanced' bar or an 'imbalanced' bar. The concept of balance and imbalance is derived from Market Profile, where a market is described as either to be balanced or imbalanced at one particular period of time based on the collective action of all market participants.

Here is an example of both a balanced and an imbalanced bar.


but isnt there very little info to brand as balance/unbalance

Last edited by joy; 28-06-2009 at 08:55 PM.
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Old 28-06-2009, 09:04 PM
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Originally Posted by joy View Post
but isnt there very little info to brand as balance/unbalance

All price action is hindsight, so the info needed to brand it is not very crucial.

I will expand on the balance/imbalance concept more in the next post.
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Old 28-06-2009, 09:14 PM
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Originally Posted by JJ View Post
Reserved..


To be edited.
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Old 28-06-2009, 09:46 PM
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Originally Posted by JJ View Post
We will begin with the basic building block of price action, the price bar. Instead of labelling each bar by its unique charateristic, we can step back and label it in terms of a 'balanced' bar or an 'imbalanced' bar. The concept of balance and imbalance is derived from Market Profile, where a market is described as either to be balanced or imbalanced at one particular period of time based on the collective action of all market participants.

Here is an example of both a balanced and an imbalanced bar.


seems from the examples that Balanced means indecision or near indecision and imbalanced means directional move on either side

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Old 28-06-2009, 09:52 PM
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Originally Posted by the tape View Post
seems from the examples that Balanced means indecision or near indecision and imbalanced means directional move on either side


Yes in a way, balance is when both sides agree on value or there is a lack of participation from long term traders which causes short term traders to create a band of rotational price activity. Its important to observe the price action around the bar to grasp the context, volume helps as well, we will build on that in later posts.
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Old 28-06-2009, 10:09 PM
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Price action going on , great .
If you also shed light on what impacts the price action
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