'No indicators' revisited

[brys]

eeee$$$$$

Howdy aLL,

As we know (?) there's no volume for FX market provided - I hope and pray that one day someone is going to pull it together, and I pray I can bribe someone to do so ;-). However, if you make an assumption that a volume from one broker can be representative of the market action (people think the same when they don't know WTF is going on) we have something interesting to look at over the past few days. This price/volume action speaks for itself. This is the 1H chart of Euro/$. The last bar closed at 17:00 GMT or 18:00 UK. I hope this is something of value to all or at least some.

One more thing. 15 min chart of the price volume action from about 15:00. Demand level is stable. Supply is falling. An up move on the way? mAAAbE. ;-)

All the best,

Robert

 

[GirlPower]

NVLS - 52wk Low

NVLS seems to be struggling to keep above its 52wk Low of 25.44

It dropped below it a couple of hours into today's trading session and volume to support it at the level seems to keep coming in.

However, am I right in thinking if it drops below today's current low of 25.20 with no volumetric support that it will be a good short for the final hour or so?

edit: I'm showing as posting this an hour earlier than I really am. It's currently 19:56 BST.

 

[theknifemac]

NVLS seems to be struggling to keep above its 52wk Low of 25.44

It dropped below it a couple of hours into today's trading session and volume to support it at the level seems to keep coming in.

However, am I right in thinking if it drops below today's current low of 25.20 with no volumetric support that it will be a good short for the final hour or so?

edit: I'm showing as posting this an hour earlier than I really am. It's currently 19:56 BST.

Hi GP, you probably need to fix your time settings in your profile - the server knows the correct time you posted but is thinking you are in a diff time zone / daylight savings. Otherwise that extra hour could greatly improve your trades eh !

Stew

 

[Mr. Charts]

Coming from Yorkshire myself, I know we are in our own time zone ;-)
Richard

 

[JungleJim]

Dear All,

It has taken me a couple of months to read every post within this thread but it was well worth it. This thread has made me laugh and it has made me cry (Eureka, that is). You have all helped me see much clearer how price and volume are related and allowed me to sling the indicators in the bin.

I do have one question for Socrates. In an earlier post you said that you would show us how to read price charts without volume (although Candlesticks only touch on Volume). If I have missed your post or you have put it in another thread then I apologise for missing it.

 

[SOCRATES]

Price Charts Without Volume.
#######################

You are quite right. This was in response to question posed by Darktone, because he is very interested in currencies, which because of the huge, astronomical turnover in them worldwide can only be tracked accurately in terms of price and time but not volume, because in these instruments the task of collecting volume would be impossible. I did promise him I would deal with this topic as a separate item. I have not done it yet because I have been very ill and have only just recovered. I have not forgotten and I will do it, probably in the form of an open masterclass. At the moment I have also to consider "the Journey From The Basement" which I have left relatively unattended as a consequence of my illness, that I am going to get back to and as this develops further I will decide on which thread to post, whether here or on "The Journey", according to how all this pans out. The most important part is the development of mindset in the armoury of a trader, and for this reason I am giving this topic priority and later on probably "difficult" instruments will be discussed to illustrate how the correct mindset helps us to deal with danger and uncertainty.

 

[JungleJim]

Dear Socrates,

I'm please you are now feeling better and hope the illness was not brought on by eating too much HP sauce. I've now started to avidly read the "Journey from the Basement" post and will see you at the end in another couple of months

 

[darktone]

cha ching!

re post 1156

Is that "Futurological" enough for you?

Just for fun and all that.
dt

PS. roll on the "price charts without volume" although there is another thread just started up on this topic in general chat which is looking good so far.

 

[bracke]

re post 1156

Is that "Futurological" enough for you?

Just for fun and all that.
dt

PS. roll on the "price charts without volume" although there is another thread just started up on this topic in general chat which is looking good so far.

I make that about 128 minutes too late. Your futurological watch is running sIow.
I was waiting for your post, where were you.


Regards

bracke

 

[darktone]

I make that about 128 minutes too late. Your futurological watch is running sIow.
I was waiting for your post, where were you.


Regards

bracke

Yeah sorry about that the crystal ball was a little cloudy, that with connection problems and..

No, im only joking it just plain slipped my mind, perhaps if you made a note and reminded me next time ...

 

[BBB]

re post 1156

Is that "Futurological" enough for you?

Just for fun and all that.
dt

PS. roll on the "price charts without volume" although there is another thread just started up on this topic in general chat which is looking good so far.

Some people were ahead of you. Look at the EuroFX futures. You will see that (as always) some people knew the result of the NFP number before the release and took their position at 7:29 (cst) and before (1 min chart). Nothing unusual in this as its not a fair world is it! Some people got $2500 per lot in 3 minutes.

No, I wasnt one of them - but I will be next time!

 

[robq]

re post 1156



PS. roll on the "price charts without volume" although there is another thread just started up on this topic in general chat which is looking good so far.

I think Socrates said he would address this subject. Did he - perhaps in another thread ? I can't find the posts.

 

[SOCRATES]

Yes I have, in the closing stages in Journey From the Basement. And furthermore I have limited the explanation to the Mechanical Aspect Only. This is because FX is driven by intent and not other factors.
The mechanical revelation of price activity and tick volume is a mask for intent. And in fact when the tick is not right it creates an overlay that hides the true intent. I am not willing to explain any further anymore, sorry, I have now found out who's who in the zoo and now we turn our attention to the rankings, not the rantings.

 

[SOCRATES]

Ah ! And by the way , I am not going to explain that either.

 

[lagalare]

Price target

Here is the SOTR trade and my reasons for taking it.

As has happened previously, the Dow and S&P opened negatively with the Nasdaq in positive territory so I was looking to see which was leading which. After 20 minutes the Dow and S&P then went positive following the Nasdaq and so I was looking for a stock in which to go Long.

SOTR gapped by nearly $3 at the open and in the first 5 minutes nearly 3million shares were traded in which an attempt was made to force the price down but this failed. At the spike marked 1 on the volume chart there was a final attempt to push prices down on very high volume and this also failed. The market then moved steadily up in price on constant volume and made 2 higher lows and successfully held above the round number at which point I then decided to go Long getting filled at $39.05.

The market moved up on steady volume and once a 0.5% move in stock price had been achieved I sold half at $39.25 for +20c
Volume then decreased slightly but price was still moving up and once the stock had moved 1% in value I closed the second half for +40c
In terms of price and volume there was no real reason to close the trade and the position could have been held open until either volume spiked or volume dropped off with steadily decreasing price. The reason I closed the trade is more to do with my money management than any technical reason as a 1% move in price represents a 1% gain in my account.

I hope this is of interest and comments are welcome.


Paul

hi Paul,

Your trading examples are very informative.

I started to trade Nasdaq stocks recently, mostly story stocks. For those stocks, I work out the price target based on the support and resistance established in the past.

I haven't traded a single non story stock, because I wasn't sure if I can exit with a profit. The story stocks are traded heavily, so there is a momentume, to push the price towards the next resistance and support level.

For general stock, how do you work out your price target for day trading?

thanks in advance.

lagalere

 

[Trader333]

There is not only one answer to this but as a rule of thumb I would aim for a 1% move in the stock price from the point at which I have entered. However, there are many reasons why I would close a trade and often trades can be at a lot more than 1% in movement without any reason to close.


Paul

 

[lagalare]

thanks Paul,

Perhaps your choice of stock gives the best target for the price rise, stocks emerging from consolidation do tend to make bigger moves. I'll do some back testing to see what the general patterns are.

Do you only trade in the 1st hr after opening?

lagalare

 

[Trader333]

I will trade either the first 2 hours or last 2 hours and rarely both.


Paul

 

[robq]

"I closed because a 1% move in stock price had been achieved which is a MM rule I abide by."

Paul, I looked back at this. I didn't understand it at the time and still don't. Why close your position when you have gained a specified amount? It seems inconsistent with "cut your losses, let your profits run"

Rob

 

[Trader333]

Rob,

It is not inconsistent with "cut your losses", but may not fit with "let your profits run" however, I also said that there is not just one reason to close the trade but in that particular case I decided to. In my view and (as I have got more experienced), I dont have hard rules that say "if this then do that" although this type of rule is important when starting out.

If I believe that a particular trade has less potential at a given point then I will close it. I have also found that many stocks will make a 1% move from the point at which I enter quite readily and that making a move greater than this reduces in probablility. I accept that this varies from stock to stock and some stocks make a very large move but catching these just right is not easy and is often accompnaied by wild swings in price.

This works well for me but others may wish to do things differently.


Paul