GREY1's APPROACH TO TRADING US STOCKS

[ianp]

I have a quiz and challenge for all traders on this BB. The challenge is not to any individuals but it is to do with chart analysis concept

Can some one tell me where the stocks price is heading during the next 5 bars. Use any kind of analysis you are comfortable with... I am going to make a point out of this quiz later on ..


Grey

Hi Grey1.

using chartist techniques you would assume the trend will continue higher ,as the stock is making higher highs and higher lows.

Ian

 

[buccsrugby]

Hi all,

Anyone working on coding VWAP engine for esignal ?

I found a VWAP formula for esignal but it basically just draws fixed lines on the chart almost like pivot points. Is this of any use ?

Cheers,
Ray

 

[smbtnt]

2 scenarios:

1) Retest of previous R at 59.6 and rally.

2) Fade the breakout at round number 61.00, head down to 58.5 and possibly gap fill at 57.5.

 

[Grey1]

Thank you all so much for your contributions .

The elementary TA would tell you that the price would go higher and higher . How ever the next five bar is a drop of 70 C before a recovery . The 5 crucial bars that could reck any trader's confidence in his entry .

WHat went wrong then ? well , , I deliberately did not mentioned the market direction and to see if I am questioned over it .. ( no one mentioned any thing about the market direction and what phase market was.. ( exhausted or not )

In my earlier posts i did mention that the best way in stock trading is a TOP DOWN APPROACH . In another word you start with market analysis and then move to the stock which no one did . This is one of the areas that a trader should strengthen himself. If he does not know where market is heading he MUST NOT even considering to do any kind of analysis on the stock . Why do you think the fundamentalists fail to perform ? is that because they cannot not asses what stock is cheap or not ? NO simply because their analysis over the market direction lets them down .

The fact that SLB failed to perform higher and higher was simply because market took the stock down beyond stock's inherent strength .

Now lets go to exhaustion .

The most important concepts in TA are

1) EXHAUSTION
2) CONFIRMATION


Exhaustion

Exhaustion is the art of identifying when a certain trend has come to the end. in our SLB trade above , the market was technically exhausted which as a result corrected itself dragging SLB down with it .

The Exhaustion engine which i have mentioned few times will help traders to know

1) IF MARKET TREND IS EXHAUSTED
2) IF STOCK TREND IS EXHAUSTED

and if both 1) and 2) are not exhausted then IT IS SAFE TO GO LONG ( LONG IN SLB TRADE ) other wise WAIT for correction .( the engine will give you an excellent insight in how long you have to wait for correction before taking a postion )

I have out lined the exhaustion engine design which keeps traders out of BAD trade which in turn will help them to last longer in the market.

Grey1

 

[Grey1]

...grey you said no one mentioned what phase the market was in....i told you that it was pros taking profits giving to weak hands at the highs.....i call this temporary exhaustion....and leading into a shake out fake out...which would lead to a downside correction....releasing weak longs......getting in some weak shorts...and allowing pros to but up again low......i even said the price level... even drew not only the next 5 bars but more like the next 30.....please correct my analysis ...specific parts....so what didn't i get.?...what didn't i make clear enough?...very interested to know mark j

Actually a very nice analysis urs was as you correctly pin pointed the 5 bars down as well as next phase up .

My point was generally speaking one has to know where he stands with the market before moving in to stocks . I can give you a similar situations that stock does not fall and performs a higher highs with tiny correction if any just because market still has momentum to move higher which as a result would carry the stock with it to much higher level .
.

Grey1

 

[buccsrugby]

Morning,

Can no one respond to my thread above. Thanks
Ray

 

[Racer]

Actually a very nice analysis urs was as you correctly pin pointed the 5 bars down as well as next phase up .

My point was generally speaking one has to know where he stands with the market before moving in to stocks . I can give you a similar situations that stock does not fall and performs a higher highs with tiny correction if any just because market still has momentum to move higher which as a result would carry the stock with it to much higher level .
.

Grey1

I would say that is far more than ' a very nice analysis' , not only did mr marcus get the next 5 bars correct, he correctly predicted the next 30 bars with in depth reasoning behind the moves.

And have seen him analyse like this, and forecast accurately 95% of the time!

 

[ianh]

Morning,

Can no one respond to my thread above. Thanks
Ray

There is one available for download free from www.tradingsimulation.com

 

[smiley]

Actually a very nice analysis urs was as you correctly pin pointed the 5 bars down as well as next phase up .

My point was generally speaking one has to know where he stands with the market before moving in to stocks . I can give you a similar situations that stock does not fall and performs a higher highs with tiny correction if any just because market still has momentum to move higher which as a result would carry the stock with it to much higher level .
.

Grey1

After almost 3 years I am finally starting to understand price action. Got lots to learn still however posts like Marks certainly do assist greatly. That level of detailed move by move analysis is indeed rare. Well done Mr. M.

Congrats too Grey1 on a very informative and productive thread.

All the best to all contributors.

 

[buccsrugby]

Hi ianh,

Thank you for the reply. That is actually the one I downloaded and have running on my esig charts. Is VWAP anywhere near similar to grey's VWAP ?

Cheers,
Ray

 

[orky]

Vwap

Hi ianh,

Thank you for the reply. That is actually the one I downloaded and have running on my esig charts. Is VWAP anywhere near similar to grey's VWAP ?

Cheers,
Ray

Hi Ray

I have downloaded that one as well. Does you esignal; show atwo sets of red and purple lines?

 

[buccsrugby]

Howdy,

Yes, it shows a blue line in the middle, then purple lines above and below then red lines further out above and below. I am a futures trader so trying to see how it works for that

Cheers,
Ray

Hi Ray

I have downloaded that one as well. Does you esignal; show atwo sets of red and purple lines?

 

[standaman]

Are u guys paid??

Honestly, a simple question... Are you guys paid to be completely blind and stupid??


This chap posted a chart of the FUTURE and no one takes notice? Purely visual, no trickery, no gimmicks, simple lines and no one sees it?

AMAZING SHOW OF HUMAN NATURE HERE BOYS AND GIRLS >>> TRULY AMAZING!

 

[Racer]

These are the two charts for comparison, one is the prediction by mr marcus and the second the result.

So it shows that directional trading is more than possible.

mr marcus, who has achieved a true and extremely deep understanding of the markets, can understand the future before it occurs

 

[ianh]

Hi ianh,

Thank you for the reply. That is actually the one I downloaded and have running on my esig charts. Is VWAP anywhere near similar to grey's VWAP ?

Cheers,
Ray

The esignal study gives you the centre VWAP line, and 2 sets of MPD bands, based on todays price & yesterdays price.

Grey only uses VWAP as a small part of his overall strategy, I believe.

 

[dsn]

...ok...ill play just this once and give a shortened answer..it would be nice to have the volume also and more context....like the last major swing exchange....would also be nice to have some s+r....key levels.

.....vey abbreviated version of what i see....mark j

Couldn't ask for a better demonstration than that! - brilliant post.

Gets right down to the basic ingredients - the different people in the market, how they feel, what they do, and why they do it. This is true market reading and understanding. Doesn't mean you can't gain an edge another way but this is the reality behind it. Unfortunately a v. difficult reality to master

 

[Grey1]

OH well Only made $779 due to FOMC. I could have made a killing ( $10 000 plus ) if I wanted to take a risk but one thing I know and even a good news can result in negative reaction ..so i only traded before the announcement . After the announcement chased the Energy stocks with no fill . If i had got the fill I would have been long VLO , SLB but never mind .

My position size was smallish due to risk attached to days like to day hence the small win .

All in all on a day like this one is better off to take a break and have a day off. Tomorrow is my day and I am going to kick butt in a proper manner. No ifs No buts No FOMC NO Gambling Pure business..

Market rocks

Grey1

 

[DiscoPete]

Grey1 excellent thread!

A quick question on our favourite.....money management!

Earlier in the thread you said a bad trade was if

Amount risked > prob of win * amount won

However leter on you gave this example:

Stock A MPD possibe reward 10 C
Stock B MPD possible reward 30 C
Stock C MPD possible reward 80c

remember we were down $600.

in above example stock C seems to be the correct stock ( 833 * 80= $644 which would recover my $600 loss plus $44 profit ). Hence we use MPD band as a confirmation for correct choice of stock. 833 is the number of shares or position size derrived from the ATR.

(page 4 i think too much time cuting and pasting from different parts etc)

You also mentioned that we would risk 1% of $100,000 ie $1000. If we look at that trade it would of been a bad trade becasue we are in effect risking $1000 to only gain $644?!? is this correct? I fail to see how this can be a 'good' trade as we are risking more than we are going to get back! Please explian if this isn't true! For this to be a good trade the MPD should of been at least 130c (130 x 833 rougly $1000). I hope this is true because if it is i think i get the whole position sizing and money management aspect of it.

Cheers

Pete.

 

[Grey1]

Grey1 excellent thread!

A quick question on our favourite.....money management!

Earlier in the thread you said a bad trade was if

Amount risked > prob of win * amount won

However leter on you gave this example:

Stock A MPD possible reward 10 C
Stock B MPD possible reward 30 C
Stock C MPD possible reward 80c

remember we were down $600.

in above example stock C seems to be the correct stock ( 833 * 80= $644 which would recover my $600 loss plus $44 profit ). Hence we use MPD band as a confirmation for correct choice of stock. 833 is the number of shares or position size derrived from the ATR.

(page 4 i think too much time cuting and pasting from different parts etc)

You also mentioned that we would risk 1% of $100,000 ie $1000. If we look at that trade it would of been a bad trade because we are in effect risking $1000 to only gain $644?!? is this correct? I fail to see how this can be a 'good' trade as we are risking more than we are going to get back! Please explain if this isn't true! For this to be a good trade the MPD should of been at least 130c (130 x 833 rougly $1000). I hope this is true because if it is i think i get the whole position sizing and money management aspect of it.

Cheers

Pete.

Pete

Not quite correct as the same principle applies to probability of loss. The probability of hitting your stop loss level of $1000 is much less that probability of wining the trade.


Example $1000 * 30 % < $ 644 * 70 % ( both probabilities are for argument sake )

Both probabilities come from your system design and should be preferably designed in a way that a trade goes ur fav as soon as you enter.


Please let me know if that is clear

Grey1

 

[Grey1]

A QUIZ FOR ALL SEASON lol


IF AN INSTITUTION IS INTERESTED TO BUY 200 000 shares of APPL tomorrow HOW DOES HE DO IT ?



you have no idea how important is to know about block trading and how it affects you as small trader ?I welcome all traders and their comments.

grey1