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Posts: 136 since Jun 2010
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CL - How to tell when things start to move fast
I've been watching CL on a 133 tick chart for a while now and I've noticed that there are slow times where things aren't happening much and then all of the sudden volume really picks up and the bars start showing up -really- fast.
Is there an indicator that I could use somehow to alert me that things are picking up? I need like an accelleration indicator or something? Is there something out there like that?
One thing you could try is to run a second chart at a lower tick (e.g. 89). This would give you a slight heads up to a move coming. You could also run a second chart on a 1 min. scale with volume. This may also give you an indication as to when a move is building.
screencast.com/t/KiWTLqCI9rO sorry this isnt clickable, too newbie on bmt to post links
Part of the challenge to your question is that it is because volume is low, a tick chart will 'really move'. The above picture shows a thinkscripter volume aberration detection thing. As you can see, it doesnt really fire until its too late or a bottom is put in. It will also lie a lot. Something like ADX or VFI might be interesting. Another approach would be a tight (like 1.3 or 0.7) bollinger band that alerts on a break. bollis use price deviation via math, so a 'big move' relative to the tight channel or a break out in periods of high volatility should keep it from over-chattering.
I agree whole heartedly with sicilian that a tick chart should be used in conjunction with a time chart if your approach is to detect breakouts vs trading ranges. Also, you might consider a 233 (10-15 tick bars). 133 is pretty tight for /cl imho.
I've studied order flow extensively, paid a lot of money for training and I've come to the conclusion that by the time volume shows up, and you get any meaningful information from it, it's too late to act upon in any meaningful way. I can't tell you how many times a colleague would say, "I'm out, there's no impulse in this market", and left for the day only to be disappointed to find out that ten minutes later CL moved a $1.64. I'm not saying order flow analysis is bunk, I would never suggest any methodology is bad so long as it's working for you; if it is you're awesome, but if it's not already something you're experienced with, I would suggest looking for an easier way to skin this cat. There are a billion things that work, analyzing volume is one of the more difficult methods, in my humble opinion. How do you quantify it? How much volume does it take to move the market? Well more buyers or sellers initiating than there are responsive buyers or sellers. How do you know how much that will be at any given time? Mr. Big B@ll@x can show up at any time, sitting in his customer chair specifically designed to accommodate them, and move CL anywhere he wants.
Just my 2 pence.
The following user says Thank You to WolfieWolf for this post:
Write an indicator that will play a tick (like on a metronome - use something that can be heard but not loud), This indicator will fire only on the first tick of the bar and you can judge how fast the bars are coming by how fast the tick sound is coming. You could have it turned into an oscillator that would plot the amount of time on each 133 tick bar. I would set a ceiling for the oscillator (say anything over 1 minute is max 100%) or whatever value you chose that you feel is valuable. If the oscillator is maxed then you know the market is slow and you want to wait until the value decreases to enter a trade.