How to Spot the Beginning of a Trending Day?

[cowcool 10]

How to spot the beginning of a trending day?

 

Thx!!

[brownsfan019 17]

 

Is that all you need today cow?

 

To know whether it's trending or choppy for the day?

 

That's it?

 

[momentom 10]

cowcool, have a look at market profile.

[Xuanxue 10]

You only need two charts and three indicators to do what you want to do. Forget market profile.

 

The first indicator and chart, really, is a 5 minute of $TICK. If you're not aware of $TICK it's a market internal that you'll have to add to your software as a symbol manually. When TICK is trading above the mean (0), more stocks are trading at their offer price than their bid. That means the market can't find enough buyers. In other words a train. The opposite is true if below the mean. It's a mess to look at, though, and even more challenging to interpret, especially when concentrating on set-ups. That's why you put a 10 period or higher volume weighted moving average orover it and bold the line so all you have to do is glance at it.

 

Next you need a 30 minute chart with only a 20 period exponential moving average on it.

 

When TICK is trading above the mean consistently, buy the pullbacks to the 20 ema on the 30 minute chart, but only when the moving average's move confirms other signals. If below the mean in TICK, fade the rallies.

 

If you're ever unsure in sideways action or think you could be had in a fade, only buy or sell after action moves 4% above the prior session's close to the upside or below the low in a bear. To minimalize risk even further, enter after a 2% retrace testing the validity of the breakout. What you're doing then is using people's money who are stuck on the wrong side of the market fueling a thrust.

 

That right there took me years. You should appreciate it and use it.

Edited May 17, 2009 by Xuanxue

[cowcool 10]

fei zhang xie xie xuanxue ... wo zen de hen gan jie . Thx!

[stanlyd 10]

higher high's and higher lows = uptrend

lower high's and lower low's = downtrend

 

Just look at a good time frame chart for you and see which of these patterns is taking place

Also if you want to use internals look for the same series of hh's or lh's in something like the NYSE advancers..

Edited May 17, 2009 by stanlyd

[UrmaBlume 10]

"How to spot the beginning of a Trending Day?"

 

While this is written for the emini S&P the same principles apply to most other markets.

 

Before the open:

 

Night Session trade is mostly done by professional traders which gives us a very good idea of professional sentiment in world equity markets.

 

Night session trade in this contract currently averages around 250k contracts. The first clue of a trending day is above average trade - 300k or more.

 

If price trended during the night session on an above averge trade this is your second pre-open clue of a trending day.

 

If the difference between UpVolume and DnVolume is more than 15k contracts during the night session this is your third pre-open clue of a trending day.

 

Of note is that over the long term over half the time one extreme of the 24 hour session is made during the night session.

 

The open:

 

Again over a fairly high percentage of the days the open is near (20% of the day's range) one extreme or the other. On days where price passes through the open more than a few times during the first hour trend days are unlikely.

 

On the other hand on days where the three pre-opening conditions mentioned above are in effect and price departs decisively from the open during the 15-30 minutes of trade you have a faily good indication that the open has established one extreme and that trend trading away from the open will establish the other.

[thalestrader 14]

Here's an interesting article I copied year's ago from Linda Raschke.

Capturing Trend Days.doc

[sep34 10]

You only need two charts and three indicators to do what you want to do. Forget market profile.

 

The first indicator and chart, really, is a 5 minute of $TICK. If you're not aware of $TICK it's a market internal that you'll have to add to your software as a symbol manually. When TICK is trading above the mean (0), more stocks are trading at their offer price than their bid. That means the market can't find enough buyers. In other words a train. The opposite is true if below the mean. It's a mess to look at, though, and even more challenging to interpret, especially when concentrating on set-ups. That's why you put a 10 period or higher volume weighted moving average orover it and bold the line so all you have to do is glance at it.

 

Next you need a 30 minute chart with only a 20 period exponential moving average on it.

 

When TICK is trading above the mean consistently, buy the pullbacks to the 20 ema on the 30 minute chart, but only when the moving average's move confirms other signals. If below the mean in TICK, fade the rallies.

 

If you're ever unsure in sideways action or think you could be had in a fade, only buy or sell after action moves 4% above the prior session's close to the upside or below the low in a bear. To minimalize risk even further, enter after a 2% retrace testing the validity of the breakout. What you're doing then is using people's money who are stuck on the wrong side of the market fueling a thrust.

 

That right there took me years. You should appreciate it and use it.

 

Thanks for your post.

It would be much easier to comprehend if you post 2 charts with 3indicator and annotations explaining your original posts. I understand its time consuming, considering the time you have already spent the charts would surely complement your original post.

 

Best regards

[sep34 10]

Thanks for your post.

 

Night Session trade is mostly done by professional traders which gives us a very good idea of professional sentiment in world equity markets.

 

Your implying its mostly institutional trading durring the night session?

 

If the difference between UpVolume and DnVolume is more than 15k contracts during the night session this is your third pre-open clue of a trending day.

 

Why 15K volume as the arbiter?

Is there some logic behind the 15k ?....Would you expand on this.

 

 

 

Best Regards

[nyctrader 10]

Again over a fairly high percentage of the days the open is near (20% of the day's range) one extreme or the other. On days where price passes through the open more than a few times during the first hour trend days are unlikely.

 

Thanks for this data, UrmaBlume, but that statement in parenthesis is confusing. 20% of the day's range is during the open? Is that it?

[sevensa 10]

Thanks for this data, UrmaBlume, but that statement in parenthesis is confusing. 20% of the day's range is during the open? Is that it?

 

He means opening in the top/bottom 20% of the day's range.

[UrmaBlume 10]

Thanks for your post.

Your implying its mostly institutional trading durring the night session?

 

Why 15K volume as the arbiter?

Is there some logic behind the 15k ?....Would you expand on this.

 

 

I am not implynig, I am making a statement born of experience that most trade during the nite session is done by commercial traders, many outside the US. Also much of this trade is to either hedge or speculate on equity indexes other than the S&P.

 

As to the 15k, this number is not an arbiter but rather a zone of interest. The precise over and under here is a matter for each trader to reasearch- I also didn't mention what method I used to differ UpVol from DnVol - I gave the hint - you should do at least some of the work yourself. Simple research will allow you to either verify my number or come up with a better one.

 

The point here is that there is valuable information available from night session trade and that of that information, most important is the size and balance of trade during that period.

 

cheers

[sep34 10]

The word professional is used by some to mean only institutional traders and by other to include all traders that are consistantly profitable (including retail traders).

 

When you think with the above context as possibility, then you will understand why I used the word "implying" "your implying its mostly institutionlal trading durring the night session". The point is I dont know you or what your definition of professional trader is. Now I do know what your implied meaning by the use of the word "professional" because in your response you used the term Commercial instead of Professional.

 

If I decide to ask questions then I ask detailed questions else its a not useful for me.

 

 

Regards.