Quote Originally Posted by adam ali View Post
Billy,

I can't recall you ever discussing volume in the context of these charts. Now I understand the 20DMF gives us a look at volume but it pays more attention to the size of that volume in a snapshot sort of way rather than as a sequence. (I think that's right.) Bob looks at volume - does it play an important part in your pivot methodology? Obviously, one of the reasons I'm bringing this up is yesterday's move was on low volume and many are pointing to that fact as indicative of a weakness in this potential rally's market structure.
Adam,
Volume used to play an important role, not anymore. In 2008 and 2009 my setups discussed in the VIT group (see archives) involved much volume monitoring at breakouts of clusters and major floor levels.
Then, several research papers revealed that the official exchange reported volume had dwindled from 85% of total consolidated volume in 2007 down to only 25% in 2009. That's 75% of total true volume that you cannot monitor anymore as a retail investor and it is only traded by professionals, your most important actors to monitor.
The only way left to use official volume data confidently for tracking large players activity is Pascal's Effective Volume and 20 DMF. Since they are at the basis of the robot's signals and market direction, I don't need to add anything to Pascal's comments.
Traders who are still using old volume indicators and interpretations are lost and confused for a good reason. Only price pays. Billy