Trading NASDAQ stocks with Jerry Olson & Ian Hodgson

[Jerry Olson]

The final P/L is + $ 816.67 .. I all turned out to be good .

I am going to contribute some thing about Do's and DO NOT' s for intra day traders .,, later on for all our young traders. I first need to go for a run other wise my URIC ACID will break out to a new high lol

IRAJ

are we rocking or what????

 

[Jerry Olson]

rut 2000

this chart is ready for a major pop off that sweet bull flag set up

http://www.buyitbuyitsellitsellit.com/OJ1.gif

 

[Grey1]

just thought this article might interest people on VWAP engine

 

[Jerry Olson]

Sndk The Chart Of The Day

Hi everyone i was doing my pre market update this morning for my subscribers and noticed SNDK sitting rigfht where the 50 day is at the bottom of the pennant, and the up trend line on the daily candle chart.

This stock will run back up toward 65.00 now market willing of course. Maybe you swing traders might take a stab...................... :cheesy:

http://www.buyitbuyitsellitsellit.com/OJ1.gif

We do suggest swing trades all the time and now will be offering "Option Trades" after mid May as Genesis will be getting Options on the Laser Platform.

I have been known to be an option trader over the last 30 years. Maybe i can help you make a buck or two trading them my way.

I'll be talking about it over time right here on this thread.

have a good trading day

 

[Grey1]

Easy Peasy Lemon Squeezy An Awesome Signal From The Might Vwap Engine

 

[Jerry Olson]

Sndk Trade

anyone get SNDK?????

 

[Chorlton]

Easy Peasy Lemon Squeezy An Awesome Signal From The Might Vwap Engine

Hello Grey1,

I am interested in indicators that soley represent price AND volume action and consequently have recently taken an interest in VWAP following the recommendation from another bb.

Would it be possible for you to "shine some light" onto the use of VWAP for trading purposes? I've had a look at a number of websites which cover VWAP but I'm a little confused as to how to apply it and also whether it would be useful for my trading.

Basically, I position / swing trade UK stocks holding a specific position open for between a few days to a few weeks. With regard to data, I'm currently reliant on EOD and use daily charts for my trading.

I'm assuming that as VWAP is calculated for each trade during the day, then relying on EOD will not be appropriate. Is this true? If not, (and I can utilise VWAP) can you offer any guidence as to how I can get started?

Thanks,

Chorlton

 

[Grey1]

Chorlton , i am finished for today but on my return i will reply .
This is the final for the day . Ma ma mia

 

[Jerry Olson]

My Ovti Trade

Here's my 1400 share OVTI trade today, i just sold it!

http://www.buyitbuyitsellitsellit.com/OJ2.gif

we nailed AAPL SNDK(as predicted) & OVTI

we did get that 525 important reversal back up on the SOX P&F chart...

 

[Jerry Olson]

The Aapl Lunch Time Trade

I am going to write an article for the Knowledge Lab very soon talking about Redundant Repeatative Patterns for Scalpers Intraday

please note this chart and my trades just using 500 shares so that any newbie can see once you get this, anyone can do it with regularity.

http://www.buyitbuyitsellitsellit.com/OJ3.gif

here is those tradesas they happned on that slam of AAPL today just a few minutes ago..

http://www.buyitbuyitsellitsellit.com/OJ4.gif

have a good rest of the day

 

[Jerry Olson]

Morning Mail

Good Morning all

The sellers in the S&P pits trading the futures yesterday were trying very hard to break an important support level on the index at 1306-08 area. They pounded it all day pushing it down on every rally but what I saw was in fact bulls defending that price structure and I believe we are going to rally today and right thru to the FOMC date next week. If the S&P's take out 1320 I would suspect buyers to kick in hard and shorts to be forced to exit fast creating a nice rally in the whole market. The current chart pattern on P&F is called a triangle and it can break either way. I think that break of 1320 will nail this advance for sure as the pattern tells me we are going higher if that price hits. On the downside any break of 1300 would be a negative for me. We must always show both sides of the street. Then as I checked the COMPX chart, it stopped at a double bottom test at 2300.00. What is very interesting to me even if we break down on the chart we would do that after a double top failure and this sets up a "shakeout pattern" that's bullish either way. I like the "hope springs eternal" potential here as the street leans toward a stop in the rate hike cycle. I truly feel they not only need to stop but in fact will stop. The markets would breath a sigh of relief thinking it's over for now. IN fact if that does occur I doubt they will come back and raise at another meeting any time soon. I was thinking about our current full employment number. Folks we are really doing quite well creating jobs, but in all reality that too shall stop especially if the housing sector slows precipitously over time. In other words how low can it go? It's already stretched to the lower limits if you ask me. That usually means we are overdone to one side or the other and due for a snap back at any time. All and all we are setting up for a sweet spot if the economy can sustain this very nice 3.5% to 4.5% GDP number. The FED already can see slowing possibilities as the rate hikes continue to slow the expansion over the next 3-6 months. "THE" Meeting is finally here, and I think by the reaction of the markets you'll see what I mean on Tues May 9th at 2:15 pm est.

 

[timsk]

A little Aside . . .

Hi Jerry,
I'm enjoying the thread, although I struggle to keep pace with it. If it was a stock, it could only be GOOG! I don't wish to disrupt the thread or to take it off on a red herring, so let me know if you want this post deleted and I'll do so, happily. That said, I thought I'd pose my questions to you here in public rather than via PM, as other subscribers to the thread may be interested in your answers.

I would like to know what role your Point & Figure charts have in your trading. Do they have primacy over candlestick charts and/or CCI and the other indicators that you use? Alternatively, perhaps you use them as confirmation signals? Or, maybe they have an entirely different use altogether? Any insights into the importance and value you place upon them as well as your views on how they may best be utilised, would be much appreciated.
Many thanks,
Tim.

 

[Grey1]

Hello Grey1,

I am interested in indicators that soley represent price AND volume action and consequently have recently taken an interest in VWAP following the recommendation from another bb.

Would it be possible for you to "shine some light" onto the use of VWAP for trading purposes? I've had a look at a number of websites which cover VWAP but I'm a little confused as to how to apply it and also whether it would be useful for my trading.

Basically, I position / swing trade UK stocks holding a specific position open for between a few days to a few weeks. With regard to data, I'm currently reliant on EOD and use daily charts for my trading.

I'm assuming that as VWAP is calculated for each trade during the day, then relying on EOD will not be appropriate. Is this true? If not, (and I can utilise VWAP) can you offer any guidence as to how I can get started?

Thanks,

Chorlton

I have written an aweful lot on VWAP trading . please do a search on the BB .

VWAP trading can also be used for Swing trading but not as efficient as one would like. I have no idea what the win rate using VWAP concept on EOD UK stock is going to be as i have not ever tried it .

How ever the concept is solid. meaning ful and objective . VWAP is a solid bench mark with no arbitrary setting ( unlikes CCI or RSI or MA which you have to input the setting to get a signal ) .

I am sorry i cannot really help you further with UK stocks. If i could help i really would ..


Grey1

 

[Jerry Olson]

Hi Jerry,
I'm enjoying the thread, although I struggle to keep pace with it. If it was a stock, it could only be GOOG! I don't wish to disrupt the thread or to take it off on a red herring, so let me know if you want this post deleted and I'll do so, happily. That said, I thought I'd pose my questions to you here in public rather than via PM, as other subscribers to the thread may be interested in your answers.

I would like to know what role your Point & Figure charts have in your trading. Do they have primacy over candlestick charts and/or CCI and the other indicators that you use? Alternatively, perhaps you use them as confirmation signals? Or, maybe they have an entirely different use altogether? Any insights into the importance and value you place upon them as well as your views on how they may best be utilised, would be much appreciated.
Many thanks,
Tim.

Hi Tim

a bit tired right now, but will address your query first thing in the am

i have a lot to say about this subject

have a nice evening

 

[Chorlton]

I have written an aweful lot on VWAP trading . please do a search on the BB .

VWAP trading can also be used for Swing trading but not as efficient as one would like. I have no idea what the win rate using VWAP concept on EOD UK stock is going to be as i have not ever tried it .

How ever the concept is solid. meaning ful and objective . VWAP is a solid bench mark with no arbitrary setting ( unlikes CCI or RSI or MA which you have to input the setting to get a signal ) .

I am sorry i cannot really help you further with UK stocks. If i could help i really would ..


Grey1

Grey1,

Thanks for the reply. I shall have a thorough read of this bb and hopefully things will be a lot clearer..........

 

[Trader333]

Grey1,

In many cases people have used ATR as a means of measuring volatility. I know that you prefer a different way of measuring this so would you like to discuss a little about how you go about it as I am sure it would be of benefit to all ?


Paul

 

[TheBramble]

I'd also be very interested in Grey1's approach to volatility measurement and use - I suspect it might have a significant bit of math associated with it, but maybe not.

In the interim...

I have been researching this subject myself as my own approach to factoring in 'current' volatility had been largely visual rather than strictly mathematical. I look at the 'twitch factor' for the past N periods. N being defined by similar levels of 'twitch'. Need to explain further I think.

Twitch is noise - to me. Other traders are very probably trading this 'noise', but on my 5min charts, to me, it's noise I want to ignore.

If you look back on any instrument on a 5min chart over a reasonable period of time, you'll see varying levels of noise/twitch/volatility. I'm NOT talking about trends, advances, declines, consolidations i.e. the bread & butter moves - I'm talking about how much fuzz there is while they're doing whatever they're doing. What you will notice as you get to the lower levels of granularity is that at different times, there'll be different sizes of twitch. But here's the really interesting bit - these periods of similar twitch tend to cluster.

So for the last 4 hours of trading for instance, a stock will have advanced from $25 to $27.50 maybe with a pullback or two, doesn't matter. But look at the tick data for that same period. You'll notice there are periods within that 4hour period where the price twitches around maybe +/-5 cents. Another period where it's barely moving more than +/-2cents. Then maybe +/-10cents. The things is, these periods of specific size do tend to cluster. The +/-5cents period may be for an hour, the +/-10cents period for 90 minutes. The +/-2cents may only be for 30minutes. And this is why I said above N periods. I let the stock action determine the N periods I'm going to look at.

Anyway, that is the way I currently calculate Volatility. Fairly dynamically and not mathematically precise in any way. I'll take whatever the twitch factor currently is (as defined by my ruggedly unscientific measurements) and factor that into my risk calculations. These go into the pot along with Support & Resistance levels and all those other good things.

However, getting back to the point of this post (anyone still listening? 😆 ) is that I was impressed with a fairly rigidly mathematical approach to this by Ehler (Rocket Science for Traders). While I think there are limitations in attempting to do a complete X-over from the field of Digital Signal Processing to Trading in general - I do think there may be some merit in considering treating volatility in stocks as noise in the signal (fluctuations in the price action from a trader's perspective).

I've been looking at the ratio of the standard deviation of closes (of the 5min bars) of the last N bars (where N is from my flaky definition above) to the standard deviation of closes over the last M bars - where M is N*3.33 and using that as my twitch factor.

I haven't traded this in real-time yet as I don't rush anything into the 'production line', but today might be a good day to give this some active research.

If I do get round to it, I'll post an update on my findings. If anyone's interested. Actually, probably even if they're not. Why else am I here?

Iraj...sorry...you were about to tell us about your volatility calcs...

 

[Grey1]

bramble,,

when I saw the term clustering you mentioned that put smile on my face . Keep it up

Paul

Paul my man ,

ATR is near enough approximation for calculating volatility . I like it because people can relate to that. Very much like MPD bands . Theses bands are simple approximation to real VWAP bands . As my intention is not to complicate the stuff for our newbie’s hence I only discuss the simple way of doing things.

If you used ATR , for example you are ignoring volatility clustering (some period you have higher volatility than normal .. so if you only use 14 bars back and stock was going through consolidation you could have measureing the wrong volatility value as the condition under which you have measured volatility is subject to change ,, For example the stocks break out and volatility curve skews toward non conformity condition ) . This means your pos size is now carrying a higher risk than normal.. Our volatility model takes care of that . There are many ways of measuring volatility but our own model is an adaptation and refined version of maximum likelihood method..


Did this explanation help ?

Grey

 

[lwebb]

bramble,,
If you used ATR , for example you are ignoring volatility clustering (some period you have higher volatility than normal .. so if you only use 14 bars back and stock was going through consolidation you could have measureing the wrong volatility value as the condition under which you have measured volatility is subject to change ,, For example the stocks break out and volatility curve skews toward non conformity condition ) . This means your pos size is now carrying a higher risk than normal.. Our volatility model takes care of that . There are many ways of measuring volatility but our own model is an adaptation and refined version of maximum likelihood method..

Interesting, I'm going to dig up my Statistics book!!

Curious about the definition of MPD and the time period it's based upon. I read in one thread that the formula is (high - low) / 2, where high and low are the values for the day so far.

Is the daily bias there because this is what matters to institutional traders; it's the benchmark they're measured against. Do shorter periods make any sense here, like morning and afternoon sessions; or the high/low of the first hour, etc.

The distance of the bands from VWAP could be modelled on Bollinger Bands, but I read a comment on one of the threads that this works out badly.

Just curious about some great material.

 

[Spam Man]

IBut here's the really interesting bit - these periods of similar twitch tend to cluster.

I did a load of work on this kind of thing in the first half of last year.I managed to prove statistically, using Chi Square tests and stationarity and suchlike, that there is a greater chance of a period of high volatility being followed by another period of high volatility, vice versa for low volatility. Even more so if you look at multiple timeframes. All well and good - and proof, if proof were needed, that markets are not random - but I never actually managed to turn any of this into a tradeable edge so after a while I got bored and moved on.

If I do get round to it, I'll post an update on my findings.

Please do. I'd be happy to share my stuff as well, in the shape of some truly colossal excel spreadsheets.