Day Trading and Your Life.

This is a discussion on Day Trading and Your Life. within the Discretionary Trading forums, part of the Methods category; It´s all about VOLUME and his friend named “PRICE”. Yes, that is a clear statement. The market move, yes it ...

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Old Oct 20, 2010, 2:50pm   #1
 
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Day Trading and Your Life.

It´s all about VOLUME and his friend named “PRICE”.

Yes, that is a clear statement. The market move, yes it does, but it needs gas to move, where do you think that gas come from ?. Well, I can assure you is not coming from retail orders. When the market moves is because the BIG BOYS (Banks, Investment Houses and Big Broker Houses) are buying or selling in huge quantities. All that action creates big volume and you can see that volume very clear in your computer screen. Well, you need a trained eye to detect it, but once you have the practice, you can read the market volume as if you were reading the newspaper. Now, it is your skill as a trader that will help you to make money following the trend that is pushed by big institutional volume.

Please, I BEG YOU, do not be fooled by those GURUS who talk about using magical technical indicators, I have seen novice traders using like 10 indicators at the same time, IT IS CRAZY!!. Please follow my advice, do not do that. You have to keep your trading strategy as simple as possible. Price, Volume, and trend lines is all you need to trade any market.

If you want to learn how to trade and to make money, please follow the advice above, in time you will know that I am writing the truth here.

Until next time.
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Markets are living entities in constant change–and the key to trading survival is to learn to recognize change and adapt. If you use rigid, systematic trading rules, blindly applied to all market conditions, you will not survive as trader. By: Reza Dilmaghani
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Old Oct 21, 2010, 12:53pm   #2
 
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I lost some money yesterday. My bad.

malaspina started this thread Emotions play a big role in day trading. Yesterday I was a victim of my own emotions. One important thing in day trading is that you need to wait for the trend to prove itself before entering the market, you will miss some points in each bet but in the long run you will lose less and will make more money. In day trading you have to be very picky to avoid over trading and to play only once the best odds are in your favor, there is no sense in making some money in the morning and then to lose during the afternoon part or more of what you have made. So patience is key.

Yesterday, I won some money in the morning and then lost during the afternoon more of what I have made, I tried to enter the market a little earlier without waiting for confirmation of trend continuation and it came back against me. I was taken out of the market as my stop-loss was triggered.

Briefing: ALWAYS WAIT FOR THE TREND TO PROVE ITSELF.

Until next time.
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Markets are living entities in constant change–and the key to trading survival is to learn to recognize change and adapt. If you use rigid, systematic trading rules, blindly applied to all market conditions, you will not survive as trader. By: Reza Dilmaghani
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Old Oct 21, 2010, 1:11pm   #3
 
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Re: I lost some money yesterday. My bad.

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One important thing in day trading is that you need to wait for the trend to prove itself before entering the market
This is absolute nonsense. This is absolutely NOT what day trading is about.

All good things do not come to those that wait.
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Old Oct 21, 2010, 1:55pm   #4
 
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Re: I lost some money yesterday. My bad.

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Originally Posted by DionysusToast View Post
This is absolute nonsense. This is absolutely NOT what day trading is about.

All good things do not come to those that wait.
I am afraid to say that you are mistaken. This is absolutely what day trading is about. Please tell the truth.
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Markets are living entities in constant change–and the key to trading survival is to learn to recognize change and adapt. If you use rigid, systematic trading rules, blindly applied to all market conditions, you will not survive as trader. By: Reza Dilmaghani
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Old Oct 21, 2010, 3:46pm   #5
 
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Re: Day Trading and Your Life.

You imply that day trading is all about trend following.

This is total nonsense.
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Old Oct 21, 2010, 3:53pm   #6
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Re: Day Trading and Your Life.

Nothing wrong with counter-trend trading, scalping, short term overbought/oversold levels. Plenty of ways to play the markets. The most important thing is to know what you are doing so you don't get knocked out of the ring.

Peter
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Old Oct 21, 2010, 5:21pm   #7
 
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Re: Day Trading and Your Life.

malaspina started this thread
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Originally Posted by wackypete2 View Post
Nothing wrong with counter-trend trading, scalping, short term overbought/oversold levels. Plenty of ways to play the markets. The most important thing is to know what you are doing so you don't get knocked out of the ring.

Peter
Agree, trading with the trend is my style. It works for me.
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Markets are living entities in constant change–and the key to trading survival is to learn to recognize change and adapt. If you use rigid, systematic trading rules, blindly applied to all market conditions, you will not survive as trader. By: Reza Dilmaghani
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Old Oct 22, 2010, 10:26am   #8
 
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Re: Day Trading and Your Life.

Hello! I'm a new one here. I use volume as my trading strategy and just want to poin out that it is always necessary to wait when big boys accumulate a big amount of volume. They never lose their money.
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Old Oct 22, 2010, 4:14pm   #9
 
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Re: Day Trading and Your Life.

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Originally Posted by Lina View Post
Hello! I'm a new one here. I use volume as my trading strategy and just want to poin out that it is always necessary to wait when big boys accumulate a big amount of volume. They never lose their money.
That is correct. I always look at volume, it is the gas that price needs to move.
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Markets are living entities in constant change–and the key to trading survival is to learn to recognize change and adapt. If you use rigid, systematic trading rules, blindly applied to all market conditions, you will not survive as trader. By: Reza Dilmaghani
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Old Oct 22, 2010, 4:56pm   #10
 
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Day Trading and Your Life.

malaspina started this thread Congestion Areas In Trend Trading.

In day trading there is no point to try to guess where the market will go next, it is impossible. Of course, you can try it but I bet you will blow out your account in no time. But there is a way that can give you an edge, that is waiting. Yes, you have to wait for the market to speak to you. usually when the trend is in place and you see a short pullback you can notice that there are price bars going up and down in a small narrow range (a congestion area), once a price bar closes over (for longs) or down (for shorts) the whole congestion area with high volume it is a sign that price will resume trend direction, you must act quickly and take your position. This is not 100% bulletproof but it has worked for me to reduce risk in my trades.
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Markets are living entities in constant change–and the key to trading survival is to learn to recognize change and adapt. If you use rigid, systematic trading rules, blindly applied to all market conditions, you will not survive as trader. By: Reza Dilmaghani
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Old Oct 22, 2010, 4:59pm   #11
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Re: Day Trading and Your Life.

Nice post, but when you mention volume I start wondering what are you seeing in volume?

The reason I ask is because volume isn't like reading a newspaper for me but more a field of grass and I can't give any importance to one blade of grass or the other. So please enlight me? Whom's theories about volume are you using? Or from what books did you got your wisdom about volume?

Btw About price where you talk I can totaly agree! Price is all you need!

Thanks in advance!
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Old Oct 22, 2010, 6:10pm   #12
 
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Re: Day Trading and Your Life.

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Originally Posted by EmotionIsTheBigEvel View Post
Nice post, but when you mention volume I start wondering what are you seeing in volume?

The reason I ask is because volume isn't like reading a newspaper for me but more a field of grass and I can't give any importance to one blade of grass or the other. So please enlight me? Whom's theories about volume are you using? Or from what books did you got your wisdom about volume?

Btw About price where you talk I can totaly agree! Price is all you need!

Thanks in advance!
Hi, when I talk about volume is based on my own experience after many years of observation. I can see a relationship among high volume and fast price movements. It is important to spot the trend in place and paying close attention to price and volume so you can detect signs of accumulation that gives you a chance to enter the market (in a pullback) before the big move. Also, studying the price and volume relationship can give you an edge to exit the market before the trend bends.

As I said before it is not 100% bullet proof, you have to train your eyes, but it gives you an opportunity to enter the market before the big move and with a lower risk. Practice is key to develop this art called trading.
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Markets are living entities in constant change–and the key to trading survival is to learn to recognize change and adapt. If you use rigid, systematic trading rules, blindly applied to all market conditions, you will not survive as trader. By: Reza Dilmaghani

Last edited by malaspina; Oct 22, 2010 at 6:22pm.
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Old Oct 23, 2010, 9:16am   #13
 
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Re: Day Trading and Your Life.

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Originally Posted by malaspina View Post
That is correct. I always look at volume, it is the gas that price needs to move.
Volume and price moves are not correlated in the simple manner you try to make out.

Click the image to open in full size.

Points a and c are where the most volume was during the day and where the price was least volatile and more choppy. On the other hand, point b was the area with the least volume and the largest price move.

Citigroup (C) on Friday had a trading range of 5 cents, yet 314,411,790 shares were traded.
Athenahealth (ATHN) had a trading range of $4.90 cents on Friday and only 4,021,362 shares changed hands.

Volume itself, is quite irrelevant. Looking for a move + volume in a simplistic fashion is going to lead to buying highs and selling lows.
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Old Oct 23, 2010, 10:36am   #14
 
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Re: Day Trading and Your Life.

toastie

I must admit that volume is not relevant to me (probably because I've never been able to make head nor tail of it ) but aren't you comparing apples to pears here?

You have shown volume to price whereas malas seems to be talking about volume to time. It's no surprise that volume was highest at your a and c because that's where the price sat most of the time.

If his observations have validity then I guess he would be looking for high volume on the first of the three long down bars that took price from a to b.

good trading

jon
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Old Oct 23, 2010, 1:56pm   #15
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Re: Day Trading and Your Life.

All this talk about bars, volume, etc = pub math.

If volume >= a pint then it goes down, at all 3 bars.

Peter
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