merely a warning sign of an impending change and we do have to be patient.

When a
shower of rain stops, it doesn't stop suddenly, it gradually peters out, then
stops.
When you spill something, and have to mop it up with some absorbent paper,
the
'first pass' collects most of the spill, but it takes a 'second pass' to complete
the job.
This is the market. It is a sponge. It takes time to complete the mopping up
operation, before it is ready to turn.
I hope I have made the point! Please be patient and wait. The reversal will
come, but
not instantly from one signal on one candle.
Principle No 3 : It’s All Relative
The analysis of volume is all relative and I only came to this conclusion once
I
stopped obsessing about my volume feed. When I first started I became
obsessed
with trying to understand every aspect of my volume feed. Where did it come
from?
How was the data collected? Was it accurate? How did it compare to other
feeds?
And was there something better that would give me more accurate signals,
and so
on. This debate continues to this day in the many trading forums with
discussions
centred around the provenance of the data.
After spending many months trying to compare feeds and back test, I soon
realised
that there was NOTHING to be gained from worrying about minor
imperfections or
discrepancies. As I wrote earlier, trading and VPA is an art, not a sci ist, not
ence.
Data feeds will vary from broker to broker and platform to platform thereby
creating
slightly different candle patterns. If you compare a chart from one broker
with
another of the same instrument and time frame, then the chances are you will
have
two different candlesticks. And the reason for this is very straightforward. It
is
because the close of the candle will depend on a variety of things, not least
the clock
speed on your computer, where you are in the world, and at what time during
the
session the closing price is triggered. They all vary.
Data feeds are complex in how they calculate and present the data to you on
the
screen. They all come from different sources, and are managed in different
ways.
Even those from the cash markets will vary, spot forex feeds even more so.
But, it’s
really not a big issue for one simple reason.
Volume is all relative, so it makes no difference as long as you are using the
same
feed all the time. This is what months of work proved to me.
This is why I lose patience with traders who say that tick data as a proxy for
volume
is only 90% accurate. So what? For all I care, it can be 70% accurate or 80%