TinGull

As I had posted on my credit spreads thread, this is a large area of congestion that SPX has entered into (ES, too). There is a lot of money that changed hands and people have a bit invested at these levels for sure. I love looking at areas of resistance rather than one simple price level. You can think of it as a value area. If price were to break down that 1440 and stabilize under there, that's the time to really worry. Right now, I'm semi-bullish on the patterns yesterday and where are on the chart. I think that if price were to test the lows (which it looks like it could based on premarket) and get rejected and today happens on lower volume...that'd be good for the near term.

Oh...looking to make a grand on 10k in a lower risk environment wouldn't be too tough to do over a 10 month period, really. ThinkOrSwim should be able to lend a hand with their autotrading service.

Hey sunnyside (got your PM). Regarding the 50/50...I think that in day trading it applies more so than how I trade. The way I trade I look for around an 80% probability rate, but the risk/reward sucks so bad I have to do that. I'm usually risking 7 to make 3 sort of thing. The odds absolutely play in my favor, and I have rules in place so that I would NEVER take that full drawdown... In day trading, then yea, I'd say a 60/40 is a very nice ratio to have. at 50/50 it's all about the RRR. I mean, having 50% of your trades work out while youre winning twice as much as your losing ones...you're in business I'd say.

Hey Abe. I was kidding...I'm not licensed to handle other people's money. If you're looking for a place to make 10% on 10k in 10 months...I assume you mean 10% a month...you'll be paying a nice chunk in management fees I'm sure. Are you talking about 10% growth per month? Or annual? Oh...an please, don't buy crude or china. Those things are parabolic and this is exactly when smart money is selling the stuff off to people who want to get in on the action.

I'll be the first to bite....how about my trading account?

Phew...what a day today. Had me sweatin'!! haha Well, that 1450 level was supported big time this afternoon as buyers came in and swept the market off it's feet. Price is still under my really sweet spot, but within the range it needs to be. I hadn't been a part of what appears to be a shakeout before. When I was trading spreads before it was in a relentless uptrend that lasted months and months and months. Looking forward to price rebounding a bit tomorrow...and hopefully vol will drop off a bit and I *might* close out the positions depending on what I see for debits to close.

Absolutely, walter. I just want to make it clear that I do have an adjustment process in place if price were to reach my pre-determined levels...I'm not flying by the seat of my pants. Just wanted to make that clear. Price came 15 points from my level and then BAM!! Reversed course and finished nearly unchanged on the day. Pretty amazing action today.

Absolutely...context is everything!

Nice ranj. My technical levels for adjusting this trade haven't been hit yet, and now the market is starting to stabilize, so things are good. Been in this position for a while and still have the same technical views on it. Just not as "perfect" as I'd like it to be, ya know? But, nothing ever is I guess...just keep doing what I do and let the odds play themselves out. Volatilities are still showing fabulous odds for this position working out even in these times of increasing vol. 65% chance of expiring worthless next week...heck, I used to go for a 65% chance 40 days from expiry, and that worked for me. Just been a while since I'd been back in the options game and gotta work that rust outta the system.

Wanted to start a thread on shakeouts. What do you do when a position is going against you, but you still feel on a technical level, not emotional, that the position should stabilize? Do you cover your position and take the loss? Or do you hold your technical view and consider yourself a "strong holder" and maybe add to the position? I'm interested to hear what goes through your mind as you see money flow out of your account on something that on a technical level should be stabilizing soon. As you could probably imagine, I'm talking about a position I'm currently in. My position is still safe for about 25 SPX points and expires next week. We're currently in a major congestion area and levels *should* stabilize in here and provide a bounce enough for volatility to drop, give me my premium back, and then I can close out the position early next week. Looking at S/R, this position should be safe, and I do have a way out (not a profitable one...but not a full loss one either) I just hate that feeling of the shakeout, ya know?

There's also PXE, a dynamic energy fund

PBW is one that comes to mind.

Solar plays CRANKED today. And I mean....CRANKED!

IWM 70/72/86/88 IC was put on for a .58 credit / 36.6% ROI. I will be doing all my IC's at 40-50 days out, and this was 44 days out. If price comes down to 75 (using a 2.5 ATR) then I'll look to cover that put portion. I've taken off my 158/161 call spread at a .02 cent debit, for a total of .35 credit. That was a risk of 2.63, or a 13.3% ROI. Right now, price is falling, tho not drastically. SPX is down 2 points this morning and I expect some chop around after the selloff yesterday.

Yea, I loved IRT. Since I don't day trade anymore, it's overkill for what I do so I cut costs. But if I ever trade intraday again, you betcha I'm gonna be back.

Ok...awesome. Thanks tech/a. Now, let's get back to what started this entire new discussion... Indeed, with the chart you posted of a low volume up bar after a test I would tighten up my stop. That, to me, is starting to show weakness and I wouldn't want to get caught on the wrong side, so tightening up the stop would be warranted. You stated that you disagreed with me about that statement I made, and I just wanted to clarify that I'm not incorrect in making that assessment. In the commentary on your screenshot it states, just as I stated, that low volume up bars indicate withdrawal from the market at higher prices. Again, just want to go back to your original disagreement to make it clear about what I had said just in case there were any discrepancies regarding my statement. Maybe my view of VSA is looser than some, for me, it works. That first chart I posted did, in fact, show a low volume UP bar and per my statement I would've tightened up my stop to the low of the previous bar, and then in fact the market turned back over for much more downside attack.

Great! Say HI to Chad for me.

Gosh, the things that you seem to be differentiating look exactly the same to me. On the doji/test I see a bar that probed the low and closed higher on lower volume. That would be a test to me. Then the next bar has higher volume, showing that the bar was in fact a test and we should start to see higher prices. The squat bar is followed by a down bar on less volume than the squat, showing no selling conviction to me. Then there is the probe below that bar, but closing higher than the previous close...on lower volume. The next bar is a hammer on higher volume in fact showing that the previous bar was a test, which you have marked. The next test I see as a bar on lower volume that closed below the close of the previous bar, but has a candle formation of strength, so I see that, too, as a test with the probe below the lows and closing just off the highs, testing that squat bar's range. So whether or not the "test' bar closes higher or lower than the previous bar, to me isn't as great an issue as to the candle formation that it makes. If I see a bullish formation on low volume that tests an area of prior resistance, I assume that is now support and when I see confirmation from the next bar closing higher on higher volume...I know it's right. If I get in on the test and see the next bar closing higher on LOWER volume, I assume I'm wrong and get out.

*head spinning*....whenever you have a moment, a chart showing what you said would be absolutely sweet. Thanks!! I'll re-read it later, too, and maybe it'll make more sense to me.

Ok...I'd love to see those charts. What I quoted earlier was straight from a TradeGuider commentary regarding low volume UP bars after a test showing weakness.

What you said here makes PERFECT sense to me via VSA. I have no qualms with saying Ultra high volume on an Ultra wide spread is opposite of what people would think. What I'm saying is that your statement makes no sense to me. Low volume on UP bars indicates weakness, I don't in any way see how this can indicate strength to you. If you can post charts with explanations to fix what I'm thinking, then that would be appreciated.

Here's the rest of the chart. Some of what you have said isn't what I've learned about VSA. Note how the next bar after the first chart I posted is a HIGHER close on LOWER volume....that to me is a clear lack of demand, showing that the down move is going to continue. Which it has.

I'd have to disagree with you saying that upbars on low volume are showing a lack of supply. Reading directly from TradeGuider on the indicator information of a "Basic Test" it states: Low volume up bars indicate their withdrawal from the market. The market failing to respond upwards, or even lower prices indicates the unwillingness of the marketmakers and main platers to participate in the market despite the indication of strength. Maybe it's just me, but seeing lower volume upbars doesn't show a lack of supply, but a lack of demand.