Grey1
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Stevet,
Sorry I miss understood you .. Well I can show you another 1000 indicator which would have given you far better profit level on YHOO than VWAP .. For example , a parabolic SAR would have done a great job on YHOO yesterday but this due to both of us already knowing that DOW rallied yesterday .. POST EVENT ANALYSIS..
Today is another day and Parabolic indicators might not work as we wont know how the market is going to move.. if it oscillates then one might use his RSI ( great indicator shame it did not work yestrday on YHOO ) and if it trends perhaps use Parabolic indicator..
Generally speaking NO TA indicator works simply because NO ONE CAN PREDICT HOW THE MARKET GOING TO REACT .. ( OSCILLATES/TRENDS/COMBINATION.. )
Cass:--
We are not talking about Fundamental valuation of stocks ..
Bonsai:-
VWAP strategy is not an indicator like MA or RSI for me to compare.. VWAP is the way business is conducted in general in anymarket place.. Most insitution traders try to buy at or cheaper than VWAP .. I think IB does offer this facility ..
Sorry I miss understood you .. Well I can show you another 1000 indicator which would have given you far better profit level on YHOO than VWAP .. For example , a parabolic SAR would have done a great job on YHOO yesterday but this due to both of us already knowing that DOW rallied yesterday .. POST EVENT ANALYSIS..
Today is another day and Parabolic indicators might not work as we wont know how the market is going to move.. if it oscillates then one might use his RSI ( great indicator shame it did not work yestrday on YHOO ) and if it trends perhaps use Parabolic indicator..
Generally speaking NO TA indicator works simply because NO ONE CAN PREDICT HOW THE MARKET GOING TO REACT .. ( OSCILLATES/TRENDS/COMBINATION.. )
Cass:--
We are not talking about Fundamental valuation of stocks ..
Bonsai:-
VWAP strategy is not an indicator like MA or RSI for me to compare.. VWAP is the way business is conducted in general in anymarket place.. Most insitution traders try to buy at or cheaper than VWAP .. I think IB does offer this facility ..
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Trader333
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I dont generally post my trades on here but I will post one I made
yesterday (12th November). This is an example of a trade that
was good value against a benchmark I use. The stock is MXIM
and I had almost given up getting an opportunity in the
afternoon session as I normally go to the gym at around 4.15pm
But on Wednesday I have an evening class so I am able to trade
a little longer. I got a signal to go Long which was confirmed by
other techniques I use.
The maximum risk on this trade was the low of the day which
was $50.83 (11 points) although I would have been out at a
loss of 8 points had it happened.
The market then took off and made a comfortable 38 points
profit and I exited on a minor retracement. Reward to Risk
Ratio of over 4 to 1 but I admit that when I enter a trade I
dont know what my Reward to Risk ratio will be because I
never know for sure where I will exit. All I know is where I will
exit if the market moves against me. This is an example of a
low risk entry on a stock that was undervalued at the time of
the trade and on most days I am able to find a few of these.
I hope it is of interest
Paul
yesterday (12th November). This is an example of a trade that
was good value against a benchmark I use. The stock is MXIM
and I had almost given up getting an opportunity in the
afternoon session as I normally go to the gym at around 4.15pm
But on Wednesday I have an evening class so I am able to trade
a little longer. I got a signal to go Long which was confirmed by
other techniques I use.
The maximum risk on this trade was the low of the day which
was $50.83 (11 points) although I would have been out at a
loss of 8 points had it happened.
The market then took off and made a comfortable 38 points
profit and I exited on a minor retracement. Reward to Risk
Ratio of over 4 to 1 but I admit that when I enter a trade I
dont know what my Reward to Risk ratio will be because I
never know for sure where I will exit. All I know is where I will
exit if the market moves against me. This is an example of a
low risk entry on a stock that was undervalued at the time of
the trade and on most days I am able to find a few of these.
I hope it is of interest
Paul
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Grey1
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Trader 333, has been the only player on this BB who has actually implemented the VWAP strategy ..
Quote "Reward to Risk Ratio of over 4 to 1 but I admit that when I enter a trade I dont know what my Reward to Risk ratio will be because I never know for sure where I will exit. All I know is where I will exit if the market moves against me.
How true? No one knows the future and where market heads.. Hence one could not assess the reward/risk ratio until market shows his hand.. We should take from market what we are given and run off with the profit ..
Quote "Reward to Risk Ratio of over 4 to 1 but I admit that when I enter a trade I dont know what my Reward to Risk ratio will be because I never know for sure where I will exit. All I know is where I will exit if the market moves against me.
How true? No one knows the future and where market heads.. Hence one could not assess the reward/risk ratio until market shows his hand.. We should take from market what we are given and run off with the profit ..
I'm sorry Grey, I can't really buy this one.
VWAP is a system of trading just like any other, but with its own parameters.
I applaud anybody who uses a system they believe in.
but if you cant show that yours produces better results, it
is wrong in my mind to be so critical of others' systems of trading.
I think there is value in most systems. But it's the gun syndrome ?
It's not the gun that's the problem, it's the person behind the gun
that is important.
So we may all pull the trigger at the same or different times.
Grey1
I use VWAP & find it a very useful tool, however it is still only a derivative of market sentiment & price.....so still only an aid.
not having a go at anyone.........as it is probably me....but can someone remind what is actually being discussed here
Jay
I use VWAP & find it a very useful tool, however it is still only a derivative of market sentiment & price.....so still only an aid.
not having a go at anyone.........as it is probably me....but can someone remind what is actually being discussed here
Jay
madasafish
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Without wishing in any way to disparage the work of those who use VWAP, buying a breakdon which has turned up does not require VWAP or any other system to identify the opportunity..
Each to their own.. but I think you have chosen a (very) bad example to extol the merits (which there clearly are) of VWAP versus all else..
TA does work, the naked chart works, evrything works (congestion before big move), flags, triangles, mas etc..
Not 100% of course
Each to their own.. but I think you have chosen a (very) bad example to extol the merits (which there clearly are) of VWAP versus all else..
TA does work, the naked chart works, evrything works (congestion before big move), flags, triangles, mas etc..
Not 100% of course
Trader333
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Madasafish,
There are any number of breakdowns that turn up everyday and
then fail and carry on down. You have over simplified what I
actually do by focusing on one aspect that is not the whole
picture. For example there are many patterns identical to that
I have posted above that I would not take because the other
factors do not confirm taking it.
The assessment of risk cannot be seen in this chart and involves
a number of factors. But if others think that all this amounts to
is buying an upturned breakdown then fine try it and see how
successful you are.
Paul
There are any number of breakdowns that turn up everyday and
then fail and carry on down. You have over simplified what I
actually do by focusing on one aspect that is not the whole
picture. For example there are many patterns identical to that
I have posted above that I would not take because the other
factors do not confirm taking it.
The assessment of risk cannot be seen in this chart and involves
a number of factors. But if others think that all this amounts to
is buying an upturned breakdown then fine try it and see how
successful you are.
Paul
grey1
i must admit i drew the line in learning about some TA stuff and one of those was parabolics - so cant tell from the chart you kindly presented wether the parabolic worked or not
the main reason i liked your WWAP thing is that you seemed to have knowledge about what some funds do and that they traded off WWAP - that i like
i never care if what i might be doing is right - all i want to know is that everyone else is doing it with me
when i checked yahoo with TA - i just used the same TA things that i know prop stock traders use and that brought about the entry and hold to close as the price responed exactly as it would to hold a long position
had the price performed differently - it would either result in a closed position or reversal of position
i guess my key point is that your analysis was right for entry - but what took you out early of a position that a prop stock trader would have held to close?
i must admit i drew the line in learning about some TA stuff and one of those was parabolics - so cant tell from the chart you kindly presented wether the parabolic worked or not
the main reason i liked your WWAP thing is that you seemed to have knowledge about what some funds do and that they traded off WWAP - that i like
i never care if what i might be doing is right - all i want to know is that everyone else is doing it with me
when i checked yahoo with TA - i just used the same TA things that i know prop stock traders use and that brought about the entry and hold to close as the price responed exactly as it would to hold a long position
had the price performed differently - it would either result in a closed position or reversal of position
i guess my key point is that your analysis was right for entry - but what took you out early of a position that a prop stock trader would have held to close?
Grey1
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Stevet,
Closing a postion ( exit ) is the most important part of trading ..
I have a money managment exit which is 1% of my total capital .. I exit when I am near to meet my target .. I have researched many years as a technician to come up with an objective way of exiting the trade to maximise return but I could not.. You know why ?Because I have no knowledge of future.. I have no control over future and exit is all to do with future.. Entry is not.. you can minimise your risk but you can't maximise your exit by more than 50/50 ( gamble)..
This is how traders should approach the exit ( IMHO ) of course-
Step 1) Look at their trading capital find out how much return per trading day they want from the market.. ( in my case it would be 1% )
Step 2) How to reduce risk to meet their X % a day target.. ( risk managment )
Step 3) How to use compounding to create wealth ..( money managment )
The only kind of exit which lets you have Full control over your total capital is Money managment exit..
This is what I use...
Hey guys . I wont responde to those who make personal issue of of technical posts.. If TA or any other kind of analysis works for you , THEN IGNORE ALL MY POSTS and I really donot mind that LOL
Closing a postion ( exit ) is the most important part of trading ..
I have a money managment exit which is 1% of my total capital .. I exit when I am near to meet my target .. I have researched many years as a technician to come up with an objective way of exiting the trade to maximise return but I could not.. You know why ?Because I have no knowledge of future.. I have no control over future and exit is all to do with future.. Entry is not.. you can minimise your risk but you can't maximise your exit by more than 50/50 ( gamble)..
This is how traders should approach the exit ( IMHO ) of course
-Step 1) Look at their trading capital find out how much return per trading day they want from the market.. ( in my case it would be 1% )
Step 2) How to reduce risk to meet their X % a day target.. ( risk managment )
Step 3) How to use compounding to create wealth ..( money managment )
The only kind of exit which lets you have Full control over your total capital is Money managment exit..
This is what I use...
Hey guys . I wont responde to those who make personal issue of of technical posts.. If TA or any other kind of analysis works for you , THEN IGNORE ALL MY POSTS and I really donot mind that LOL
Grey1
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Mr. Charts
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Grey1,
I enjoy all your posts - thank you for taking the time and effort to put them up.
I personally use very few indicators, price action being all, imho.
Interestingly, the clear chart break out on increased volume occurred simultaneously with a surge on the futures forcing the VWAP to exceed its mean so a reversion was inevitable once that spike was met with the inevitable selling pressure resulting from short term traders taking the opposite side as the futures failed to follow through.
I tend not to read many threads on these boards any longer since some individuals started demonstrating personal animosity and a prediliction for confrontation as well as ignorance.
Hence I appreciate your contributions and the standard of debate
some of them stimulate.
Please continue.
Richard
I enjoy all your posts - thank you for taking the time and effort to put them up.
I personally use very few indicators, price action being all, imho.
Interestingly, the clear chart break out on increased volume occurred simultaneously with a surge on the futures forcing the VWAP to exceed its mean so a reversion was inevitable once that spike was met with the inevitable selling pressure resulting from short term traders taking the opposite side as the futures failed to follow through.
I tend not to read many threads on these boards any longer since some individuals started demonstrating personal animosity and a prediliction for confrontation as well as ignorance.
Hence I appreciate your contributions and the standard of debate
some of them stimulate.
Please continue.
Richard
Grey1
i tend to feel that the most important part of a trade is the entry - purely because of the maths of having to make up losses out of profits - which kills the p&l
to come out even on a trade requires the trade to have gone your way - so you need a winner to come out even
but i get your point for sure about needing a consistent exit strategy
i guess when you say exiting near your target -you mean that if it makes your target and falls back - you close as you are loathe to risk the the profit which has then tested your exit level? but of course markets trending higher always pull back at some point and the pull back is where the next wave of buying occurs - or not!
i want to query this basis of exiting - but i am loathe to as you seem to have tried a lot of options to get this far and found one that now works for you -
but i find it hard with your obvious willingness to investigate possibilities that if you see a few trades in a row like the Yahoo one - that you are just going to sit back and not see if something else - LOGICAL - will keep you in the market
obviously, the market does not know it has hit your 1% level and pulled back - nor do the participating traders - so you are exitiing at what could be a buy signal
what price did you enter and exit ?- and i will have a look at what the market looked at at those exact points
i tend to feel that the most important part of a trade is the entry - purely because of the maths of having to make up losses out of profits - which kills the p&l
to come out even on a trade requires the trade to have gone your way - so you need a winner to come out even
but i get your point for sure about needing a consistent exit strategy
i guess when you say exiting near your target -you mean that if it makes your target and falls back - you close as you are loathe to risk the the profit which has then tested your exit level? but of course markets trending higher always pull back at some point and the pull back is where the next wave of buying occurs - or not!
i want to query this basis of exiting - but i am loathe to as you seem to have tried a lot of options to get this far and found one that now works for you -
but i find it hard with your obvious willingness to investigate possibilities that if you see a few trades in a row like the Yahoo one - that you are just going to sit back and not see if something else - LOGICAL - will keep you in the market
obviously, the market does not know it has hit your 1% level and pulled back - nor do the participating traders - so you are exitiing at what could be a buy signal
what price did you enter and exit ?- and i will have a look at what the market looked at at those exact points
Grey1
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Stevet
Quote “ i tend to feel that the most important part of a trade is the entry - purely because of the maths of having to make up losses out of profits - which kills the p&l “
Totally agree.. Risk of loss starts with Entry .. We must aware our fellow traders on IMPORTANCE OF ENTRY and let Mystic Mague ( Spelling ??? That lady from national lottery ) to teach us about OPTIMISED EXIT ..
Quote “ i guess when you say exiting near your target -you mean that if it makes your target and falls back - you close as you are loathe to risk the profit which has then tested your exit level?
Correct..
Quote “but of course markets trending higher always pull back at some point and the pull back is where the next wave of buying occurs - or not! “ “
Of course if market tests higher high , then I am out and lost the meat of the trend but WHO KNOWS IF MARKET HAS NOT EXHAUSTED.. We can only HOPE.. I trade away from VWAP and close @ VWAP .. Now if I miss the boat in longer runs then let it be so …
Quote “but i find it hard with your obvious willingness to investigate possibilities that if you see a few trades in a row like the Yahoo one - that you are just going to sit back and not see if something else - LOGICAL - will keep you in the market..
I am all for logical deductions but till this moment have not come up with some kind of LOGICAL MODEL to tell me if the market is going to continue or has been exhausted.. I am however open to suggestions..
Quote “
obviously, the market does not know it has hit your 1% level and pulled back - nor do the participating traders - so you are exiting at what could be a buy signal
Correct.. market does not know nothing about my target level .. But I do LOL .. The exit level for VWAP strategy is @ VWAP . as I have explained before.. We take a position away from VWAP . Fine tune ourself with L2 for Entry close when the price approaches VWAP .. If by the end of the day my 1% was met then great if not I might let some postions run to achieve the target..
Mr Chart :--
Quote “Interestingly, the clear chart break out on increased volume occurred simultaneously with a surge on the futures forcing the VWAP to exceed its mean so a reversion was inevitable once that spike was met with the inevitable selling pressure resulting from short term traders taking the opposite side as the futures failed to follow through. “
An awesome command of English … Spot on ..
Quote “ i tend to feel that the most important part of a trade is the entry - purely because of the maths of having to make up losses out of profits - which kills the p&l “
Totally agree.. Risk of loss starts with Entry .. We must aware our fellow traders on IMPORTANCE OF ENTRY and let Mystic Mague ( Spelling ??? That lady from national lottery ) to teach us about OPTIMISED EXIT ..
Quote “ i guess when you say exiting near your target -you mean that if it makes your target and falls back - you close as you are loathe to risk the profit which has then tested your exit level?
Correct..
Quote “but of course markets trending higher always pull back at some point and the pull back is where the next wave of buying occurs - or not! “ “
Of course if market tests higher high , then I am out and lost the meat of the trend but WHO KNOWS IF MARKET HAS NOT EXHAUSTED.. We can only HOPE.. I trade away from VWAP and close @ VWAP .. Now if I miss the boat in longer runs then let it be so …
Quote “but i find it hard with your obvious willingness to investigate possibilities that if you see a few trades in a row like the Yahoo one - that you are just going to sit back and not see if something else - LOGICAL - will keep you in the market..
I am all for logical deductions but till this moment have not come up with some kind of LOGICAL MODEL to tell me if the market is going to continue or has been exhausted.. I am however open to suggestions..
Quote “
obviously, the market does not know it has hit your 1% level and pulled back - nor do the participating traders - so you are exiting at what could be a buy signal
Correct.. market does not know nothing about my target level .. But I do LOL .. The exit level for VWAP strategy is @ VWAP . as I have explained before.. We take a position away from VWAP . Fine tune ourself with L2 for Entry close when the price approaches VWAP .. If by the end of the day my 1% was met then great if not I might let some postions run to achieve the target..
Mr Chart :--
Quote “Interestingly, the clear chart break out on increased volume occurred simultaneously with a surge on the futures forcing the VWAP to exceed its mean so a reversion was inevitable once that spike was met with the inevitable selling pressure resulting from short term traders taking the opposite side as the futures failed to follow through. “
An awesome command of English … Spot on ..
Grey1
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Stevet ,,
Not quite right what you said..
Moving averages need averaging period.. VWAP does not need a period.. How ever VWAP is an average price..
Moving average donot carry information about Volume , VWAP does..
It would not be difficult to construct a VMA indicator .. i.e volume based Moving averages and to be quite honest it would be far better than MA..
Not quite right what you said..
Moving averages need averaging period.. VWAP does not need a period.. How ever VWAP is an average price..
Moving average donot carry information about Volume , VWAP does..
It would not be difficult to construct a VMA indicator .. i.e volume based Moving averages and to be quite honest it would be far better than MA..
Grey1
remember an MA is just a term to describe the value derived from a specific type of calculation of avereaged inputs
- it is not specific to price
i suspect that no pure price MA would ever replicate the exact trajectory of the WWAP but i bet the key price crossover or touch points with a WWAP would also coincide with a key MA
WWAP is a lagging moving average of price as far as i can see - but using a more logical basis, or perhaps better to say - a different basis, on which to create the divisor, since it is based on price but uses volume to create a variable to weight the price value - but like all technical indicators - they all tend to meet up at a key crossover point
remember an MA is just a term to describe the value derived from a specific type of calculation of avereaged inputs
- it is not specific to price
i suspect that no pure price MA would ever replicate the exact trajectory of the WWAP but i bet the key price crossover or touch points with a WWAP would also coincide with a key MA
WWAP is a lagging moving average of price as far as i can see - but using a more logical basis, or perhaps better to say - a different basis, on which to create the divisor, since it is based on price but uses volume to create a variable to weight the price value - but like all technical indicators - they all tend to meet up at a key crossover point
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