ItalianSharp

When a breakout takes place, you got different types of traders participating in it: 1) Those who are stopped out 2) Those who enter at BO 3) Those who fade the BO 4) Those who wait for confirmation and/or retracement before getting in Breakouts often generate spikes because of the many orders placed around those areas. Soon after a BO markets usually lose momentum or volatility...this is due to profit taking and prices becoming less attractive because of overbought/sold conditions. This is why markets often retrace to the BO level...that was the level where most of liquidity was, and the big players must place their bets in highly liquid areas to keep slippage to a minimum. I also believe that since markets move within blocks or key areas, they re-test a prior area before moving to the next one...just to make sure that the BO was for real and not a fakeout.

Wow...she's definitely a hottie... I wasn't able to type anything for like 5mins...just staring at her...then next thing I know is that I typed: YOU ARE HOT

It almost sounds like it's an easy task to scalp 20 pts off YM... Sometimes I have to sit into trades for 20-30 mins only to scalp 5-6 ticks...I wish I had the opportunity to make 20 per each trade...I'd be a millionaire within a year... From what you are writing, I think you'd be better off demoing for a few months before losing any money. You're going to lose money anyway, but at least you'd have a better idea of what you are doing. A fixed target /stoploss might be too big in some days and too small in other days. Focus on understanding the market as much as you can. It takes time but it's the best thing you can do.

I agree with almost all the posts above. I'll throw in something that hasn't been mentioned yet and which made a huge difference for me: ACCOUNTABILITY You ought to be accountable for your mistakes and errors and learn from them. When I first started off, I used to find justifications outside of my trading plan to explain my losses...I used to say the words "THEY SHOOK IT PRETTY BAD"...or "IT JUST DIDN'T WANT TO GO MY WAY"...or "THIS MARKET IS MANIPULATED BY THE BIG GUYS"... The difference between now and then is that the above sayings haven't changed, while I HAVE CHANGED. I started to focus on the market and try to learn its behavior...I've been stalking the mkt for hrs, lots of screen time...And more importantly, I started to take responsibility and be accountable for my trading. There no longer is THEY, IT, etc....it's just ME.

I don't think it's a good idea to have a fixed profit target or a fixed stoploss. I used to do that but didn't have much success with it. I've started to become successful since I got rid of all those fixed numbers, risk/reward, etc...and adopted a more flexible mind instead... Basically, today I am more focused on the markets, the order flow, etc...rather than ratios, targets, stops, etc...

I too have been interested in trading DAX-EUROSTOXX but I've been put off by the unreliable volatility during the European session. Sometimes you get decent volatility and can hold on your positions long enough to make very profitable trades, whereas other times - i shall say, most of the times - you find yourself in the middle of noise until US open or 8.30am news.

Walter Yes, what I particular like is the visual representation of what' going on...that's pretty much all... VBCs like anything else aren't the holy grail or won't make you profitable if used alone. It's like watching a football game on HDTV...you can see it a little better than on regular TV, yet the outcome of the game won't change.

I've been reading thru this interesting thread for the last hour and many interesting arguments were raised. The argument against VBCs started by Walter is pretty intriguing to say the least. If all candles represent the same volume, then from a merely technical point of view VBCs annihilate the importance of volume simply because volume is evenly distributed. In all honesty, I must admit I never really found volume useful in my trading. When many dojis appear and the market is ranging, I don't really need volume to tell me we are in a choppy slow market. On the contrary, when markets take out important support/resistance points, there certainly will be a volume spike on the breakout simply because many orders have been parked around those areas waiting to be triggered. I've taken a look at VBCs and I liked their visual impact. They look cleaner than regular charts. I believe VBCs are useful because you know what you get for each candlestick printed on the chart. All you gotta do is interpret the price action and be better focused on the actual pattern signals, while trading off time charts you have to worry both about the patterns and volume. I think the key here is to ideally come up with the perfect fit for your trading style in setting up the volume #. How much weight do you want to give to each candlestick? I tried with 500 because I usually trade off the 2min chart. I found it pretty decent and I must say it's really fast around the open and news times, when many contracts are exchanged. By the way, I am referring to YM. All in all, I am going to keep this chart next to my other time charts and use it as an extra analytical tool. I think it could turn out pretty useful when markets are moving fast and I need to act quickly. Something that wasn't mentioned in this thread and that I would like to point out: When you get wide range candlesticks with VBCs, how do you interpret that? If volume is the same for all intervals, why would certain intervals have a wider range than others? I think it could be a thin DOM, letting prices run thru levels faster... ...or the majority of traders pushing the market in one direction...

Thanks! I just found it...it only works with live data yet it's an excellent indicator...

Are all of you guys TS users? Is there any eSignal user out here who can re-code these indicators into eSignal language?

Is there an eSignal version of this useful volume indicator? It's very visual and gives you an immediate snapshot of supply/demand at key S/R points. Props to the creator.

Excellent posts guys. As far as I understand about prints on the tape coming out WHITE - execution occurred between the bid and the ask - it's gotta be something to do with the pit and market makers. Since the market maker's job is to make the market, when the bid and the ask are off by more than one tick - as in the ES example mentioned in this thread - he steps in and satisfies both demand and supply. I personally ignore those prints.