Building on from Part 7.
The discrepancy between Time and Volume is when the POCs are not at the same level when comparing TPO and Volume data sets.
Weighing time and volume data can be indicative of both confluence and weakness.
For example: If time POC is different than volume POC it can point towards weakness.
When swing trading, both time and volume data can be used simultaneously.
While looking for VAL for example; if TPO shows a lower VAL than volume, then this would be the preferred selection.
That being said, both levels can be marked depending on your strategy. The main point is that you want as much accuracy as possible for your setup.
The majority of the time the POCs will align, on the occasion when they don't this can signal weakness or consolidation.
Visual examples are provided in this tutorial.
Time Stamps
1:57 – QUICK REVIEW OF 2 TRADES
- Two trades taken this week applying the theory learnt thus far from the CC modules
- Generally speaking, moves that happen during the weekend reverse during the Sunday night going into the CME open.
9:33 – TIME VS. VOLUME
- If time POC is different than volume POC it can give heads up to weakness
- For swing trades, Daniel likes to mark the levels ‘furthest out’ for the ‘best’ entries
- Daniel always merges the range price is forming to get the values
- A discrepancy between time and volume is where the POCs are not at the same value
- The majority of the time the POCs line up and that is normal
- If the time POC and volume POCs are different this signals weakness in the move or consolidation
- As we know with an increase in price we want to see increases in volume to back up a healthy move
- If the price is spending a lot of time at the high (to create a time POC) but the volume POC is lower that shows us that volume is not matching the move upwards. Daniel would generally look to short the next rise – the best set-up is a SFP of the smaller consolidation
- NOTE: When the discrepancy is huge and the price is spending a lot of time somewhere not supported with the volume you can expect the price to rotate back up towards the volume POC. This will then be a huge resistance (people taking profits, shorting, going out break-even)
- NOTE: If the volume POC area had a massive OI increase with a positive delta it shows many trapped traders which can cause downwards pressure to continue. Therefore, checking OI and volume is a must
- A discrepancy between time and volume although quite rare must be taken note of a hundred percent of the time
- Always check the volume POC area for the delta and the OI of the period. A tip for this is to look at the CVD divergences
- If the CVD had risen greatly with a high positive delta and the OI followed upwards it shows trapped longs (they are only trapped if price breaks the lows – change in MS)
- One can use this theory on the LTF (daily TPO) and HTF (merged) for swing trades
- If using this for day trading Daniel would use it to trade back to the mean volume of the day (such as VWAP)
34:33 – ONE TIME-FRAMING
- It is when the candle / TPO of the TF you are looking at is not taken out during the move (easily read on TPO charts – always 30 min chart)
- When the market is one time-framing Daniel would never look to fade that move
- It is almost always backed by a large volume increase and can be decreased in OI as it is part of a short squeeze
43:25 – SUMMARY
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