Evening trading US shares

[Mr. Charts]

Regarding the trade I did when I broke off in the middle of a post earlier, that was a failed trade and I only made 3c profit on it.
I don't trade stocks that are moving away from me and will only take a small loss on them. Control and strictly limit risk otherwise you have no foundation for long term success, imv.

Much is said and misunderstood about level2 T&S. On steadily moving stocks it can be priceless SOME of the time IF you can read it. On other stocks it is often useless.
The right tool in the right place. Common sense.

Here is the level2 T&S image of when I exited the failed trade. It is obvious that at the time there is the probability of support - and the market reaction is actual buying. I don't care what might or might not happen later, I only act on the evidence at the time.
It helps not to value your own opinion, only the evidence, and to act and, if necessary, change your actions according to the evidence. It also helps in trading to have no ego.
I hope some people find this approach interesting.
Richard

 

[thevinman]

indicators for trending markets

Hi guys,

The last two days I have been fighting the market. Not good of course. Volume is low, indices are hardly moving and fake outs are all around.

So I have a question: What can indicate before the market opens if we have a strong trending day ahead or a weak one?

I know I have to look at the premarket volumes in the futures or QQQQ/SPY and where they open. But what is high pre market volume and how big should the gap be?

I hope someone can help or want to share their research.

Kind regards,

thevinman

 

[Mr. Charts]

Hiya thevinman,
Check out the highs and lows and closes of the previous day, but reverses frequently occur after gaps anyway.
Pre-market does not guarantee direction.
I find it's better to see how the market moves after open and to trade in the general direction unless you're looking at a very strongly moving stock. Also check out sectors.
Today I had several trades, some small losses, some small gainers and four very good gainers.
They were V OLN DNA AG. Worth checking out.
It's all very well - and it's a perfectly good approach - to look top down. That's fine, but if you look for the individual strong movers you tend to find, at least the way I do things, good trading opportunities. And more reliable ones, in my personal experience. My attitude is whatever consistently works, great.
You are after all, trading individual stocks. If you want your approach to be based mainly on market direction you can always trade futures.
Having said that, if you are short a stock and it stops falling and the overall market is clearly moving up then it's usually best to cover.
Hope that helps,
Richard

 

[Mr. Charts]

PS Opportunities are usually a little harder to find on FOMC days, but I get the impression that is happening more the day or two before as well.
Don't fight the market, don't chase it, just take the opportunities it offers and never ever try to force it or chase a loss. Just go for the highest probability situations only.
Richard

 

[dvdh]

Don't fight the market, don't chase it, just take the opportunities it offers and never ever try to force it or chase a loss. Just go for the highest probability situations only.
Richard

That is the #1 rule in trading.
And for 95% of all traders also the hardest to grasp!

-Dave

 

[timsk]

Don't fight the market, don't chase it, just take the opportunities it offers and never ever try to force it or chase a loss. Just go for the highest probability situations only.

Hi Dave, Richard & Friends,
How's that for a salutation!
Well, I took your respective advice which I take to mean don't short a stock that looks like AUTH. Went long at 13.99 - just in case the breakout failed and price popped back below the RN - which is what it did. Stopped out for 13.99. Grrrrrrrrrrrrrr!
You clever Level II players were probably on the other side of my trade and shorted it - it's still falling as I type!
Hey ho, no harm done.
Good to see you around these parts again Dave.
Tim.

 

[Mr. Charts]

Thanks timsk,
1.A stock that's been moving up all day may well suffer late profit taking.
2.The market had been moving down for 17 minutes already and that made it much less likely a break out would succeed.
1+2 = 35% to 40% probability of success.

However, you did absolutely the right thing in keeping a very tight stop and getting out for a scratch trade and I think you should take comfort from that. That's good trading in a failed trade. If you'd sat like a rabbit in headlights you could have lost 60c into the close.
I will email you with some further comments in a minute.
Richard

 

[PitBull]

Hi guys,

The last two days I have been fighting the market. Not good of course. Volume is low, indices are hardly moving and fake outs are all around.

So I have a question: What can indicate before the market opens if we have a strong trending day ahead or a weak one?

I know I have to look at the premarket volumes in the futures or QQQQ/SPY and where they open. But what is high pre market volume and how big should the gap be?

I hope someone can help or want to share their research.

Kind regards,

thevinman

Hi there Peet

Thought I'd post on here as has been a while. Looks like the ol' faces are still rocking.
As Mr Charts has said, try not to pay too much attention to pre-market to indicate what type of day we are having, but volume does play a part and also the volume on tier 1 stocks, like AAPL, GOOG, RIMM etc give a clue. There is some good info on this in John Carter's "Mastering the Trade" book. However if you are focussing on news stocks then these should defy market direction as Mr Charts says.

If after the market is open for 1/2 an hour and is up/down +50/-50 then there is a possibility that it might be a strong trend day.

All the best
Pitbull

 

[lloydsc]

Welcome back Lee

When you say +50/-50 do you mean on the S & P, Dow or Nasdaq?

Regards
Steve

 

[Mr. Charts]

Hiya Lee,
Yep, still rockin as you know.
"ol'face" huh? I'll have you know I look even younger than when we last met
Though none of us crowd are in the same league as young dvdh
Richard

Lee will answer for himself, but I think he means the Dow.
However, nasdaq often goes its own way and although a look at the Dow might suggest a flat day, the nasdaq sometimes does otherwise; following on from that, nasdaq stocks frequently do their own thing, with the Dow having a weaker influence.
That is why basing a view of direction solely on the Dow and trading nasdaq stocks accordingly - this is when nasdaq diverges - produces choppy results.

 

[lloydsc]

Makes sense Mr Charts - thanks for your response.

 

[Mr. Charts]

One of the oldest techniques in trading is to trade stocks when the Dow rolls over on non-trending days. It's not a bad technique if you diversify across 3 or 4 stocks, but it's better if you trade like with like; liquid Dow stocks if you using the Dow as your lead indicator, liquid Nasdaq stocks using Nasdaq as your lead indicator.
Personally I prefer stocks that are moving clearly in one direction or reversing. I can usually, though not always, find some on even the choppiest of days.
All in my personal opinion and years of experience of course.
Richard

 

[lloydsc]

Hi All

I have a copy of Prosuite TS2000i and I understand that I have to buy Hyperserver to get a Nasdaq/ NYSE feed from IQ however does prosuite TS2000i allow Level II and T & S data to be displayed? If someone could PM me with details I would very much appreciate it.

Regards
Steve

 

[Trader333]

...does prosuite TS2000i allow Level II and T & S data to be displayed?

It wont display level II at all but you can get some degree of T&S although I haven't made use of it.


Paul

 

[lloydsc]

Thank you Paul.

 

[thevinman]

Good trading software?

Hi guys,

For several years I have been using esignal for charting and scanning. But the last 6 months esignal has big problems with their data. I have tried several of their versions, even as old as from 2004. So I used esignal 7.9 to 10.1 new. I have checked the data of esignal with the data of IB and it lags 10/15 seconds in some cases/symbols.

Today they came out with a new version and this one is even worse. And I am fed up with this crap.

So my question is: Does anyone know a reliable software program with scanner other than esignal that I should check out? I know trade station might be an good alternative, but I don't know what the quality is of the data, with the resent volatility and volume increase.

I missed out on so many trades today, because the esignal data was lagging 10/15 seconds.

I hope you guys have some advice.

Kind regards,

thevinman

 

[bdholmes]

Tradestation v8.3's scanning has a 1000 symbol maximum, and although you can load a list of symbols by index or sector, it won't allow you to load for example the largest 1000 volume stocks. Data has been reasonably reliable for the 2.5 years I've used the software, although there was a two week period a few months ago when you couldn't download historical data. I also have IB, and the data latency is around the same including during peak periods. The trading simulator in TS isn't as good as esignal's as it doesn't simulate slippage. The automation works well when you learn how to live with the quirks, I gave up trying to use intrabar orders, and don't stray too far from the defaults if you don't want your PC placing random trades!

 

[Mr. Charts]

Hiya P.,
I've just emailed our mutual friend with some details.
Richard

 

[thevinman]

Hiya P.,
I've just emailed our mutual friend with some details.
Richard

Thanks Richard

 

[Mr. Charts]

Thanks Richard

Anything I can help with, just email me.
Richard

PS Already had a good day with ESLR pre-market