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How to use volume in your trading
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How to use volume in your trading

  #591 (permalink)
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Hi FT,

Noted with Thanks.

EK

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  #592 (permalink)
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pinkieman View Post
Hello! I won't say whether or not 1 min charts are better than tick based charts. What I will say is pick one and stick with it. Each chart has it's own patterns, and as long as you don't keep changing what you stare at, you will eventually see things that repeat. What I recommend is mark charts up at the end of every day and take screencaps. I did this for about 8 months, and I separated the charts up into day "types" as well as pattern "types". After that I looked at every pattern and then also analyzed everything I could about it. Time of day, volume conditions, TICK conditions, you name it! From there I was able to nail down what happened more often than not, and put together a plan.

As far as opportunities go, I recommend nailing the 1-3 setups that appear in the morning and leave it at that. The one thing that killed me in the beginning was that I was constantly giving back profits that I had made in the morning. To be 100% honest I don't trade for a living because mentally I don't do well when I up size, but I see how my strategy can be scaled up, and I prefer only trading the morning and then walking away.

After my "setup" criteria is met, I have other criteria for a "pullback" and I enter on that pullback. It's usually about 3-5 minutes after my setup is triggered.

My stop is usually 6 ticks on the ES, and never more than 7.

Hi Pinkieman,
I captured 3 examples from yesterday, 19 May, on ES trading

1. Eg.1
Purple: Price and volume occurred at about 22.01pm(my time zone)
Tick occurred at 22.04pm
Failed attempt.

Yellow: Price and volume occurred at about 22.18pm
Tick occurred at 22.23pm
Failed attempt.

2. Eg.2
Red: Price and volume occurred at about 23.23pm
Tick occurred at 23.30pm
Successful attempt.

Does it mean that it works with longer trend line?

Please comments.

EK

Attached Thumbnails
How to use volume in your trading-esm1-tick-19may.png   How to use volume in your trading-eg.1-19may-esm1.png   How to use volume in your trading-eg.2-19-may-esm1.png  
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  #593 (permalink)
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EK1288 View Post
Hi Pinkieman,
I captured 3 examples from yesterday, 19 May, on ES trading

1. Eg.1
Purple: Price and volume occurred at about 22.01pm(my time zone)
Tick occurred at 22.04pm
Failed attempt.

Yellow: Price and volume occurred at about 22.18pm
Tick occurred at 22.23pm
Failed attempt.

2. Eg.2
Red: Price and volume occurred at about 23.23pm
Tick occurred at 23.30pm
Successful attempt.

Does it mean that it works with longer trend line?

Please comments.

EK

EK,

Hello! Sorry about the late reply. I'm having a bit of a hard time deciphering where your entries are exactly, I apologize. One thing I would recommend is putting a 1 period MA on the TICK (if you are going to use it). I judge a "strong" TICK reading as a reading where the SMA closes above 500. A "weak" TICK reading is a 1 MA close below -500. With the one period MA you can really see how 500 / -500 can be the battleground for the trend. If you look at the morning session there were brief "kisses" of +500, but there were loads of closes below -500. That might help keep you on the right side of the market. I do not look at longer term TL's at all, I find that the TL that is in play for that particular wave is what is important. For the morning session, try looking at the TICK from the day before to get an idea of what the TICK's might mean. Oftentimes, the TICKs at the end of the day will give a pretty obvious heads up about how the morning session will go. If you are still exploring this, please post up some more charts and I will see if I can help.

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  #594 (permalink)
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pinkieman View Post
EK,

Hello! Sorry about the late reply. I'm having a bit of a hard time deciphering where your entries are exactly, I apologize. One thing I would recommend is putting a 1 period MA on the TICK (if you are going to use it). I judge a "strong" TICK reading as a reading where the SMA closes above 500. A "weak" TICK reading is a 1 MA close below -500. With the one period MA you can really see how 500 / -500 can be the battleground for the trend. If you look at the morning session there were brief "kisses" of +500, but there were loads of closes below -500. That might help keep you on the right side of the market. I do not look at longer term TL's at all, I find that the TL that is in play for that particular wave is what is important. For the morning session, try looking at the TICK from the day before to get an idea of what the TICK's might mean. Oftentimes, the TICKs at the end of the day will give a pretty obvious heads up about how the morning session will go. If you are still exploring this, please post up some more charts and I will see if I can help.

Hi Pinkieman,

THANK YOU for your kind reply. Don't worry, your reply is timely & GOOD!
I did not indicate entry, only show conditions exist for trade entries but market is weak hence should not
engage counter trend trade. However, 3rd entry is possible because it shows sign of reversal for morning session.
I shall study the 1 period MA.
Cheers.

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  #595 (permalink)
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pinkieman View Post
EK,

Hello! Sorry about the late reply. I'm having a bit of a hard time deciphering where your entries are exactly, I apologize. One thing I would recommend is putting a 1 period MA on the TICK (if you are going to use it). I judge a "strong" TICK reading as a reading where the SMA closes above 500. A "weak" TICK reading is a 1 MA close below -500. With the one period MA you can really see how 500 / -500 can be the battleground for the trend. If you look at the morning session there were brief "kisses" of +500, but there were loads of closes below -500. That might help keep you on the right side of the market. I do not look at longer term TL's at all, I find that the TL that is in play for that particular wave is what is important. For the morning session, try looking at the TICK from the day before to get an idea of what the TICK's might mean. Oftentimes, the TICKs at the end of the day will give a pretty obvious heads up about how the morning session will go. If you are still exploring this, please post up some more charts and I will see if I can help.


Hi Pinkieman,

ES trade setup on 20May.
Red Trend Lines.
11.03am Volume trend line broken
11.09am Price trend line broken
11.16am Enter trade at 1332.25. $Tick chart retraced to near zero line. It was in the positive zone and went above +500.

Please comment on setup and entry

Cheers
EK

Attached Thumbnails
How to use volume in your trading-es-20may.png  
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  #596 (permalink)
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EK1288 View Post
Hi Pinkieman,

ES trade setup on 20May.
Red Trend Lines.
11.03am Volume trend line broken
11.09am Price trend line broken
11.16am Enter trade at 1332.25. $Tick chart retraced to near zero line. It was in the positive zone and went above +500.

Please comment on setup and entry

Cheers
EK

That's nearly as good as it gets. The only way that would have been better would have been if price would have come back and touched the broken TL from the other side and used it as support. When you factor in other things, such as there being a higher high (on price), you have a pretty great case for a long.


Last edited by pinkieman; May 23rd, 2011 at 10:24 AM.
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  #597 (permalink)
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  #598 (permalink)
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pinkieman View Post
That's nearly as good as it gets. The only way that would have been better would have been if price would have come back and touched the broken TL from the other side and used it as support. When you factor in other things, such as there being a higher high (on price), you have a pretty great case for a long.

Hi Pinkieman,
After Volume spike has occurred and $Tick has confirmed the direction, how long can one wait for trade entry?
I reckon 5min wait is max. and price chart (as you mentioned higher high & support/resistant) will determine entry.
Do you consider the magnitude of volume spike? If so, what the minimum?

EK

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  #599 (permalink)
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EK1288 View Post
Hi Pinkieman,
After Volume spike has occurred and $Tick has confirmed the direction, how long can one wait for trade entry?
I reckon 5min wait is max. and price chart (as you mentioned higher high & support/resistant) will determine entry.
Do you consider the magnitude of volume spike? If so, what the minimum?

EK

EK,

Yeah No more than 8 minutes if I remember my research correctly. Eventually the move gets "stale" and the pullback can mean something totally different once the context has changed. I have been keeping an eye on the size of the spikes, but I haven't collected enough data to make call one way or another. I have some theories that I'm flushing out, as far as each successive spike in relation to the one prior, but nothing concrete.

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  #600 (permalink)
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pinkieman View Post
EK,

Yeah No more than 8 minutes if I remember my research correctly. Eventually the move gets "stale" and the pullback can mean something totally different once the context has changed. I have been keeping an eye on the size of the spikes, but I haven't collected enough data to make call one way or another. I have some theories that I'm flushing out, as far as each successive spike in relation to the one prior, but nothing concrete.

Volume for ES is tricky to determine. Some days are low and other days are high. Volume spikes have to be relative to the daily average level. Sometime volume spikes can be misleading as well, sending one to the wrong direction.
It requires more observation and understanding of ES movement. Hence nothing concrete as you mentioned.

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