Trading NASDAQ stocks with Jerry Olson & Ian Hodgson

Grey1 said:
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
Click to expand...


Iraj,

Thanks for this and yes it has helped.


Paul
 
timsk said:
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.
Click to expand...

Morning Tim

seems the markets are frisky today......................... :cheesy:

About 10 years ago i had the pleasure of meeting Tom Dorsey of the DWA company at a seminar. He taught me abnout P&F and actually saved my investing life.

For scalping intraday i use candlesticks on the 5 minute charts with 20-50-200 emas and CCI ADX and Volume and have been quite successful over time.

The key to the use of P&F is for chart pattern recognition. If i am trading say AAPL at 71.75 and i see on P&F that a break of 72.00 is an important area that was prior resistance then i will tell my traders to stay long that stock IF it breaks out over that number...

what it does for me and the troops is add a special extra juice we need for trading..

More over though P&F is my market direction tool. I use the bullish percents on the main indicators to keep me buying dips or selling rallies.

so it's use is most important for sector rotation and market direction

i suggest all traders take the free trial at www.dorseywright.com and please let them know i sent you, they are freinds for years

btw to this day i still pay for their services...

hope this helps


as an adside i was long AAPL at 71.75 yesterday and was underwater so i held it and sold it pre market at 71.64 lost 11 cents but i will live!!!

always use stops folks..always................ :rolleyes:
 
Hi Jerry

Thanks for forewarning about DOW breaking out toward 11650. Today it closed at 11580, only 70 points below your target. Some questions in mind..
1. Can it reach 11650 before FOMC announcement?
2. What is the most likely reaction after the announcement?
3. As retail sales data will follow FOMC on Thursday, can it reverse the direction?

My answers are
1. There may be a reactionary pullback toward 11520. Monday and Tuesday may be slow moving days with low volatility.
2. Boom boom boom
3. depending on the data.. the market may decline.

What are yours? thanks..
 
Alo alo alo ..A very quite day to day as i only took one tiny trade Short BRCM with a tiny return of $100. You see,, when you live in England as soon as you get a good sunny day no wind no rain you have to stop doing any thing else and just spend the time in your garden. This is the beauty of trading . Is that not an ideal business that you choose to work when you want to ?

Any way , I am not sure how jerry did in his room cos I was away most of the day but i am sure he came up on top like always .

I just thought to post some thing on DO's and DONOT's of intra day trading .

DO's
DO calculate the number of stocks you are trading before you do any thing else. ( Risk management )
DO study how you are going to increase or decrease your position size if you won or lose a trade.. ( you should increase your pos size as you win and decrease as you lose )

DO trade the trend and not counter trend
DO respect your capital and stop loss . Learn how to stop loss. you cannot have same stop loss level for all stocks . Your stop must and i insist must relate to volatility of stock under trade.

DO learn about VWAP bands. A VWAP band is a Risk band .

Do use multi time frame

DO add to your position as you get positive signal in different time frame . lets say you are long APPL 1000 on 5 min chart and you get a positive signal on 3 min then add and the same goes for 1 min time frame . Dump as you get negative signal from relevant time frame . You have to learn this . you have to kick ass by adding and stop having your butt kicked by dumping just the same way as you was adding .


DONOT's

DONOT take a counter Trend trade. Donot bottom fish , donot be a hero . Do Not counter trend trade, Donot countre trend trade. I cannot insist more on this issue .

DO NOT pyramid on a losing trade ..

DO NOT kick the cat if you are wrong . Donot even kick your self . Donot blame yourself. Accept and move Onnnnnnnnnnnnnnnnnnnnnnnn.

DO NOT ignore the subject of risk management. Only fools ignore this issue.

DO NOT Trade the low volume stocks. Technical analysis does not work on such a stock


Grey1 uses the above rules at all times.


I wont be trading Monday or Tuesday due to having few guests around. Hopefully the weather is good. I hope.

Grey1
 
mr.marcus said:
.....jimmy's head is firmly implanted in jimmy's bottom.

......maybe you should add grey...that this is in your opinion...you talk like there's only one angle...your angle....you talk about small math's edges where as traders like mr charts know .. i can assure you there as far greater edges to be had...edges which cant be put into simple formulae...trading is far more art then science.....traders who know beyond price and volume....and certainly ccis etc....pre chart activity...before it even prints.....there are traders who rely on math's/quants....fine....good for them....most prop traders friggin suck cause they teach them minor edged crap....part of there edge is costs and techno....they get them into spreads from day one ....directional trading is bad...bs..give me a break.....i know of 1000 lot traders from the floors of cbot and cme.....they struggle now.....small edges ..too small edges....they never really learned to be inside the chart.....from day one there free thinking is taken from them.....they also are told this is the only way......they have no understanding whats behind the charts themselves.... no empathy....any bells ringing?..if thats work for them ...respect is due...but thats not the only way....dont be so closed minded in telling others there is no more than minor math's edges.....an open mind...is a mind ready to learn...a mind open to the possibilities of what others can also achieve ...a mind ready to make progress... ..respect for sharing your vwap strategy....everyone can learn.....

mark j
Click to expand...


Guys I love your comments but be technical . No technical No comment LOL . Have a go at my personality as much as you wish cos Grey 1 does not really mind how ever if you have some thing to say about technical analysis of time series then lets have it in open .

Look guys, you are here on this BB to make money . you are not here for fun . This is a serious BB for business people who probably want to leave their job and start intra day trading . So it would be best to learn it properly. Listen and read to what I am saying to you .

Trading is difficult. you have to use Maths as much as possible in your trading and reject any methodologies that involves emotion , feelings, heuristics, and so on . You cannot own a business which runs on emotion . Delete emotion and become mechanical as much as possible , the fruit of this action immediately be that you donot LET YOUR LOSERS RUN . If your system be SOLID WELL DEFINED BOUNDARY ORIENTED you will immediatley start seeing your capital rise day by day .

There are 1000's of methodologies to skin the cat ( mine is just one of them ) but they all have very well defined boundaries. Donot tell me " trading is an ART thingy " ( call it ART if you wish ) , call it what ever you wish but when your ownbroker DATA MINES your STOP ORDER and you sit there getting hit that is not ART any more , that is pure Maths driven events against you ,,, WHAT ARE YOU GOING TO DO ABOUT IT MY SON ?

You have only two choice as far as I am concerned, either learn it and do it right or donot do it at all .

CHOICE IS YOURS.
 
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jezza888 said:
Just curious.... Can VWAP be used in currencies?
Click to expand...
Where would you get the Volume component?

And even if you found a proxy for Volume, if the Big Players aren't trading VWAP on currencies - therefore it doesn't exist.

The Big Players do play other games on FX, but not with VWAP.
 
TheBramble said:
Where would you get the Volume component?

And even if you found a proxy for Volume, if the Big Players aren't trading VWAP on currencies - therefore it doesn't exist.

The Big Players do play other games on FX, but not with VWAP.
Click to expand...

Sorry Tony,

I was just being facetious.
 
Trading is difficult. you have to use Maths as much as possible in your trading and reject any methodologies that involves emotion , feelings, heuristics, and so on .
Click to expand...

theres a lot of disagreement with that statement!

heuristics is arguably what distinguishes humans from other forms of life. how can you do anything intellectual without it.

http://en.wikipedia.org/wiki/Heuristics

besides that, knowing a little math can be a dangerous thing in the wrong hands.

some of the most egregious examples of this are when dubious economics are watered down and foisted on the public as part of a marketing effort. e.g. random walk theory.
 
leovirgo said:
Hi Jerry

Thanks for forewarning about DOW breaking out toward 11650. Today it closed at 11580, only 70 points below your target. Some questions in mind..
1. Can it reach 11650 before FOMC announcement?
2. What is the most likely reaction after the announcement?
3. As retail sales data will follow FOMC on Thursday, can it reverse the direction?

My answers are
1. There may be a reactionary pullback toward 11520. Monday and Tuesday may be slow moving days with low volatility.
2. Boom boom boom
3. depending on the data.. the market may decline.

What are yours? thanks..
Click to expand...

Hello Leo

my upside target stand as of right now. I doubt we see much of a pullback ahead of the FED

However a potential sell the news could happen if they move to neutral next week.

It's always best to wait for the reaction to the event, not the event itself.

Let's just see what the street thinks about all this "IF" it actually happens.

I loathe to be leaning in the same direction as everyone else, it always sets us up for a major dissapointment.

But i too think they will raise rates one last time and move to the sidelines. 5.00% has been their target all along.

The markets are certainly going to like this alot.

We may correct a bit post Fed but i will be buying any meaningful dip hard and often.... :LOL:
 
mr.marcus said:
..if thats meant for me glenn..i dont think its particular nice ...just because i challenged the manner in which one poster dismisses others approaches....and i might add done in a light and polite manner......this is not a private thread so therefore i have a right to politely express opinion....i also apologised for the blip in proceedings.......ive done more than 99.9% of members of this site for other traders ...behind the scenes and in t2w chat room....for free of course.....1000s of hours.....i dont really appreciate a post like yours mark j

i apologise again to mr olsen...i will treat this thread like a private thread and tell others to do so also....differing opinions on the approaches of the market is obviously not to be discussed here....i will go back to t2w chat room and continue teaching people to open up and see how far they can take trading...beyond the "norm"....up to them
Click to expand...

Hi Mr. Marcus

all traders and ideas are welcome here on this board. No one has to take anything to PM if you ask me.

This is a learning process for us all. So for all intents and purposes everyone can say what they wish without demeaning anyone else's thoughts.

let's really talk trading. let's talk charts, let's talk market direction. Let's help anyone that needs help if can admit to it.

That's what this thread is truly all about. It has nothing to do with ego's. Not here and not ever.

enjoy the rest of your weekend
 
Jerry Olson said:
Hello Leo

my upside target stand as of right now. I doubt we see much of a pullback ahead of the FED

However a potential sell the news could happen if they move to neutral next week.

It's always best to wait for the reaction to the event, not the event itself.

Let's just see what the street thinks about all this "IF" it actually happens.

I loathe to be leaning in the same direction as everyone else, it always sets us up for a major dissapointment.

But i too think they will raise rates one last time and move to the sidelines. 5.00% has been their target all along.

The markets are certainly going to like this alot.

We may correct a bit post Fed but i will be buying any meaningful dip hard and often.... :LOL:
Click to expand...

Hi Jerry
Like you said, the question is always what next - what could be the reaction? On April 7th, the employment/payroll data were stronger than expected and the market/Dow fell 130 points. Yesterday, the data were weaker than expected and Dow rallied 140 points. Last Monday, CNBC caused a spike. To me, the market is just hanging on a tiny thread which is a bit worrying.
 
leovirgo said:
Hi Jerry
Like you said, the question is always what next - what could be the reaction? On April 7th, the employment/payroll data were stronger than expected and the market/Dow fell 130 points. Yesterday, the data were weaker than expected and Dow rallied 140 points. Last Monday, CNBC caused a spike. To me, the market is just hanging on a tiny thread which is a bit worrying.
Click to expand...

Leo my young friend, we are at 52 week highs on many of the indexs... hanging by a thread??? I have no clue what you're referring to.

The markets are rallying despite high crude prices, the Iran rehtoric every single day, crys of impending doom and gloom.

But most of all we have been slaves to economic data because of the FED. Last Friday that number was Goldilocks perfect for the street to confirm the FED is dead...

understand please the markets move on sentiment and perception. So a bad or lower number was great. Housing here in the US is slowing as well, exactly what the FED was hoping for. Cooling off the hot expansion. Well they got it and now let's hope they do not "overshoot" like they did before.

I am betting they're a bit smarter now........................................ :eek:
 
Jerry Olson said:
Leo my young friend, we are at 52 week highs on many of the indexs... hanging by a thread??? I have no clue what you're referring to.

The markets are rallying despite high crude prices, the Iran rehtoric every single day, crys of impending doom and gloom.

But most of all we have been slaves to economic data because of the FED. Last Friday that number was Goldilocks perfect for the street to confirm the FED is dead...

understand please the markets move on sentiment and perception. So a bad or lower number was great. Housing here in the US is slowing as well, exactly what the FED was hoping for. Cooling off the hot expansion. Well they got it and now let's hope they do not "overshoot" like they did before.

I am betting they're a bit smarter now........................................ :eek:
Click to expand...

Hi Jerry,

I was referring to the market's over-reliance on economic data- a slip of tongue would cause a spike.

Yes, I am fully aware of new highs being made across the board. Like the Fed says economic expansion appears to be solid.

But the markets are nervous or cautious- you might disagree with this- but I mean, nervous like a goup of people re-visiting the highlands at the Mount Everest.

As for the Fed, I also hope that they are smarter now. It is a delicate situation- not to tighten too much too long or taking the sidelines too soon. The real focus should be the housing market and the Dollar returns for foreign investors. The second half of the year should be really interesting. :D
 
Edit by frugi - Glenn's post that was quoted here now deleted.

(edit by Racer....you beat me to it frugi .. I was just about to edit it myself... I didn't want it to stay of course!)

It seems Glenn that you have not clarified your intentions when asked by mr marcus. I therefore consider you intended this as an insult. I find this post very offensive
 
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Djia Target Almost Hit This Am

Hi everyone

well my upside target for the DJIA reached 11,603 this am. I'm still hloding on to my number for tomorrow at 11,650 what the heck huh?......................... :cheesy:
 
Peix From My Sunday Newsletter

Peix---35.60 The Btl---34.80 The Sst---i Love The Ethanol Stocks The Buzz Surrounding This Group Will Not Go Away Soon.
 
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