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DbPhoenix
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Everything posted by DbPhoenix
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Does anyone trade the NQ during the day, more or less continuously?
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How are we to know in advance why and to what extent someone else is prompted to buy or sell? We cannot know; it is impossible for us to foretell what actuates all of those whose orders are poured into the vast intake of the Stock Exchange machinery during the day's session. But if we study the action of prices; the responses; the speed of the ticker, indicating urgency or the contrary; the intensity of the buying or selling, as indicated by the volumes; and the intervals when the volume is heavy or light -- all these in relation to each other -- then we gain insight or the design and the purposes of those who are dominant in the market situation for the time being. All the varying phases of stock market technique may thus be studied and interpreted from the buying and selling waves as they appear on the tape. From these we form a conclusion as to the balance of the probabilities. On this we base our commitments. Richard Wyckoff
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While this may not be Wyckoff, it is Wyckoffian: raw breadth data without anyone having screwed around with it. The decline in the volume of advancers as compared to the previous highs in the Nasdaq does not portend collapse, but it does bear watching. The decline in the number of new highs, however, does suggest that the market is being driven higher by large-cap stocks, and the advance may not be a broad one. The story's pretty much the same with the NYSE.
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Works for me. (?) These are the three I was referring to. I won't update them in toto until there's some important change.
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I had trouble finding them myself: here I didn't include utilities. I'm less interested in what's up or down at any given time than I am in whether or not each is still range-bound.
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Speaking of broader markets, only three out of nine sectors continue to hold above their "breakout" points: energy, technology, and utilities. Anyone trading the NQ should keep this in mind.
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Why it pays to be aware of hinges:
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He did. Just not in so many words.
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Not exactly. Comparative lifting or selling power precedes a consideration of volume. If one ignores this and relies on volume climaxes, he will find that volume climaxes aren't as common as he might expect, and he won't be trading much.
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I'm glad you're picking up the ball with this. I haven't traded stocks for years, though I see no reason why the principles shouldn't apply. One caution: don't rely too heavily on the VAP. Look at where price stops rising, then where it stops falling, then at the sideways movements, much like the Darvas Box. These "corrals" are where the price and volume ranges will be found. The VAP should confirm, but it's not always as precise as some might like. You could also use the program that nic uses that provides the standard deviations from the midpoint, but you may do as well by just looking at it and keeping in mind that these are traders, not just bars.
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Since we've been discussing Friday's chart, I'll use that. However, this is not a template. These are suggestions only.
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Whether the tactics employed by somebody who writes a book (assuming that he trades, which cannot be assumed at all) are appropriate for any given individual depends on how alike they are in their goals, risk tolerance, etc. Scaling in and out can be far more profitable than all-in/all-out. Depends on how good the trader is. Also, it doesn't assume that one makes only one trade a day. It assumes that he makes only one trade in a given direction at any one time. He can also scale in if he likes. Unless one knows whether the day is going to be a trend day or not in advance, that particular issue is irrelevant. The point is that most beginners want to know where to enter and where to exit as if there's only one entry and one exit. This can lead to years of frustration. One can elect instead to be a grown-up about it.
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Most of this, however, has to do with feel rather than calculation. For real-time trading, I haven't found any of it to have much practical value. For one thing, by the time one has considered all of this, the trade entry is long gone. And, of course, what was meant by "indicator" a hundred years ago is worlds different from what's meant today.
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Something I posted elsewhere: Yes, there need to be criteria for exits. But the nearly universal problem that beginning traders have with regard to exits is a desire to trade all in then all out. Add to that the fact that they are nearly always trading with one contract or one lot, and you have a doomed setup. The solution to exits is a simple one: trade as if you were trading five contracts or five lots and abandon the idea of being able to exit with all of them at the exact top or bottom. The goal is to make money, not to prove to oneself what a superior trader one is. Then determine in advance where each of those contracts will be sold. For example, if one is trading support and resistance, sell the first contract at one or the other. Sell the second contract, for example, at the lower high or the break of the trendline, whichever comes first. Sell the third at whatever you didn't sell at for the second. Sell the fourth, for example, at a breach of the last swing low. Leave the fifth, for example, at breakeven. Then sell the first contract at whatever point you predetermined and paper trade the other four. Do this for several months. When it becomes second nature, carry the second contract for real. Sell the first and second contracts at your predetermined points. Paper trade the remaining three. And so on. Simple. No wringing of the hands, no thumb-twiddling, no head banging.
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You're ignoring the higher-volume bars, which may be why it failed. That may be insufficient reason for not taking it, but the better entry is before it ever occurs.
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"The green dots represent most if not all the available entry points, selection of which depends on the skill, talent, and risk-tolerance of the individual trader." Don't ignore the volume cues.
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Since no one else (but zeon) has mentioned this particular long opportunity, and since it is so far worth up to six ES points, I'll post this now rather than later. It should be self-explanatory. The green dots represent most if not all the available entry points, selection of which depends on the skill, talent, and risk-tolerance of the individual trader. And suggested stops: The pink dot is also a stop, tight because the entry is so late. .
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..........
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You waited for more confirmation anyway by entering at B rather than A. You therefore assumed more price risk. If you had entered at A, you could have been out at breakeven. If you had then considered that A was not the retest you thought it was, you would have been able to assess the real retest more objectively. As for taking place "in the middle of nowhere", look back at 4/4.
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You're looking at a one-bar swing and test at "3". Which is fine as far as it goes. But you have to acknowledge that this is an aggressive entry, which carries with it a willingness to enter earlier and exit if and when the trade runs into trouble. A better test takes place an hour later, but if you don't understand why the aggressive trade didn't succeed, you probably won't take the more conservative one.
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Volume aside, you could just compare the buying and selling waves. And it doesn't cost anything
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One advantage of it is that the trader can eliminate the volume window. However, I can't use it for signals as time is a factor in my signals. For charting the 24/7 activity, tho, it can't be beat as the overnite amounts to only a few bars, not 17 hours' worth.
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Bars in which the volume for each is constant, according to your settings. For example, they're similar to range bars except that a new bar forms after a given number of shares or contracts has been traded. Since they don't factor in time, they're a good compromise between the standard time bar and P&F. Here's a CVB variety of the chart we've been discussing. Notice that it's fairly easy to see that the "thrust" of the volume is to the upside, especially after the bottom is reached.
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With CVBs, though, it takes maybe 10 seconds to just count it. Of course, you've got the big bucks. Why not just wait for the Db's Cajas Famosas software? I'll give you a big discount.
