Reading Tape

[timsk]

Tim - right now - in this volatile market (which is cooling rapidly) - it's just 6 ticks both ways.

I had a trade last week that lasted 3 seconds. That's not normal at all for me. If you look at a 900 tick chart, the ATR for that was 7 ticks most of last week. So 6 ticks either way is very tight. The ATR yesterday was down to 3-4 ticks for the same timeframe but the depth isn't back on.

So - for now, it's just pull the trigger, sit back and wait. Not a great deal of intra-trade management because it's been all over the place and moving so quick that it's hard to get a lot from the tape anyway.

Hope this makes sense.

Hi DT,
Yes, it makes perfect sense to me!
I've been doing pretty much the same for the first 2 weeks of August trading the YM - using an 8 tick stop. Trading 2 contracts, I closed the 1st at an 8 tick profit. For the remaining contract, I had an automatic 6 tick trailing stop. If the market suddenly spiked against me, I'd be taken out around break even. This approach worked extremely well until Friday. Yesterday (Monday 15th), there was relatively little follow through (compared to last week, I mean) because - as you say - the volatility has dried up and trades required management. I failed in this regard and wasn't responsive enough to the changing market conditions - and paid the price as a result. Although it's a bit hair raising at times, it would actually suit me quite well if the market was always as volatile as it's been over the past few weeks.
Tim.

 

[DionysusToast]

Well Timsk - the interesting thing is that the volume is down yesterday from last week BUT the depth didn't come back yet. We should be seeing 1-2000 at each level.

So - we saw 'pre-panic' volume with 'post panic' depth. If that continues, we should be more volatile than normal but it's more of a 'watch & learn' environment. Effectively the index futures have been totally different markets in the past few weeks.

I agree with you on the market being like that all the time - I did enjoy it a lot more. Still - I'm not going to move to CL just yet. I didn't like the volatility that much.

 

[RMorgan]

This thread is exactly what I was looking for!

Thank you to all that have contributed. I feel this will be an excellent start to my education.