'No indicators' revisited

Sold remaining half at 39.45 for +40c. I will post charts and reasons if requested.


Paul

Trader333 said:

Sold remaining half at 39.45 for +40c. I will post charts and reasons if requested.

Click to expand...

Please do

seconded

thirded

keep it up Trader 333.

It's a pleasant break from the semantics to get feet back on ground.

Regards

bracke

Here is the SOTR trade and my reasons for taking it.

As has happened previously, the Dow and S&P opened negatively with the Nasdaq in positive territory so I was looking to see which was leading which. After 20 minutes the Dow and S&P then went positive following the Nasdaq and so I was looking for a stock in which to go Long.

SOTR gapped by nearly $3 at the open and in the first 5 minutes nearly 3million shares were traded in which an attempt was made to force the price down but this failed. At the spike marked 1 on the volume chart there was a final attempt to push prices down on very high volume and this also failed. The market then moved steadily up in price on constant volume and made 2 higher lows and successfully held above the round number at which point I then decided to go Long getting filled at $39.05.

The market moved up on steady volume and once a 0.5% move in stock price had been achieved I sold half at $39.25 for +20c
Volume then decreased slightly but price was still moving up and once the stock had moved 1% in value I closed the second half for +40c
In terms of price and volume there was no real reason to close the trade and the position could have been held open until either volume spiked or volume dropped off with steadily decreasing price. The reason I closed the trade is more to do with my money management than any technical reason as a 1% move in price represents a 1% gain in my account.

I hope this is of interest and comments are welcome.


Paul

Trader333 said:

Here is the SOTR trade and my reasons for taking it.

As has happened previously, the Dow and S&P opened negatively with the Nasdaq in positive territory so I was looking to see which was leading which. After 20 minutes the Dow and S&P then went positive following the Nasdaq and so I was looking for a stock in which to go Long.

SOTR gapped by nearly $3 at the open and in the first 5 minutes nearly 3million shares were traded in which an attempt was made to force the price down but this failed. At the spike marked 1 on the volume chart there was a final attempt to push prices down on very high volume and this also failed. The market then moved steadily up in price on constant volume and made 2 higher lows and successfully held above the round number at which point I then decided to go Long getting filled at $39.05.

The market moved up on steady volume and once a 0.5% move in stock price had been achieved I sold half at $39.25 for +20c
Volume then decreased slightly but price was still moving up and once the stock had moved 1% in value I closed the second half for +40c
In terms of price and volume there was no real reason to close the trade and the position could have been held open until either volume spiked or volume dropped off with steadily decreasing price. The reason I closed the trade is more to do with my money management than any technical reason as a 1% move in price represents a 1% gain in my account.

I hope this is of interest and comments are welcome.


Paul

Click to expand...

Actually it is very interesting you should mention the open because it often does so
with a burst of volume which then settles down as the price action progresses.
The exact reason why you closed it does in the end analysis not matter.
What is the most important aspect is that you acted correctly and had a
satisfactory result. This is very very important for your subconscious,
as it has a nourishing effect. You must be careful not to be tempted
to gloat over your successes because in that event the effects are
negated. Very Good Indeed, Well Done. You see how volume is not
a beast to be frightened of, but it has to be treated with respect,
and not abused.

Socrates,

You must be careful not to be tempted
to gloat over your successes because in that event the effects are
negated.

Click to expand...

I am very aware that if I let the "Ego" rise as a result of successes that it will not be long before the success will turn to failure. The trades have been posted for two reasons, primarily for comment by darksiders and to help others who are interested in why and how I took each trade.


Paul

Paul
I have copied your SOTR trade and drawn red lines as you will see. You entered just after a suuport point and after HLs and at a point where curreent price stability was evidenced by short barsand on good volume.

The price went to 39.3 and eventually broke it and you sold half

After a higher vol spike the price drifted up towards 39.4 and volume dropped off,and bars got longer and you sold before support at 39.4 was tested on lowering volume. There had been no break in the demand line although volume as evidence of demand was lessening. Is this correct please?

Trader333 said:

Here is the SOTR trade and my reasons for taking it.

As has happened previously, the Dow and S&P opened negatively with the Nasdaq in positive territory so I was looking to see which was leading which. After 20 minutes the Dow and S&P then went positive following the Nasdaq and so I was looking for a stock in which to go Long.

SOTR gapped by nearly $3 at the open and in the first 5 minutes nearly 3million shares were traded in which an attempt was made to force the price down but this failed. At the spike marked 1 on the volume chart there was a final attempt to push prices down on very high volume and this also failed. The market then moved steadily up in price on constant volume and made 2 higher lows and successfully held above the round number at which point I then decided to go Long getting filled at $39.05.

The market moved up on steady volume and once a 0.5% move in stock price had been achieved I sold half at $39.25 for +20c
Volume then decreased slightly but price was still moving up and once the stock had moved 1% in value I closed the second half for +40c
In terms of price and volume there was no real reason to close the trade and the position could have been held open until either volume spiked or volume dropped off with steadily decreasing price. The reason I closed the trade is more to do with my money management than any technical reason as a 1% move in price represents a 1% gain in my account.

I hope this is of interest and comments are welcome.


Paul

Click to expand...

Ron,

It is certainly true that the steady volume and narrow range on bars is indicative of a "No Panic" situation and as the price kept rising there was no reason to exit the trade. On this trade I was aware that the slope of price increase was less than 45 degrees which is also a good sign. What I was closely monitoring was the level of volume on each bar and whether there was any indication of faster trading. Even on the small spike down that you have shown the volume was less than half what it had been so no reason to panic and it immediately bounced up in price again.

I closed because a 1% move in stock price had been achieved which is a MM rule I abide by.

Has that helped ?


Paul

Paul
Yes thank you. I am now trying to explain to myself why the volatlity dropped so much after 14.50

Trader333 said:

Ron,

It is certainly true that the steady volume and narrow range on bars is indicative of a "No Panic" situation and as the price kept rising there was no reason to exit the trade. On this trade I was aware that the slope of price increase was less than 45 degrees which is also a good sign. What I was closely monitoring was the level of volume on each bar and whether there was any indication of faster trading. Even on the small spike down that you have shown the volume was less than half what it had been so no reason to panic and it immediately bounced up in price again.

I closed because a 1% move in stock price had been achieved which is a MM rule I abide by.

Has that helped ?


Paul

Click to expand...

Ron,

14.50 was about the time that all indices became aligned with each other. Also look how may shares were traded up to that point , it was nearly 4 million. The first 20mins was bound to have a lot of activity because the stock gapped by $3 and people would have had strong convictions as to what was going to happen to it. This would include:

1) Those who were Short from overnight and got caught by a $3 gap up at the open
2) Those who assumed that the gap up would close so went Short
3) Those in Long positions who sold and went short for the reasons in 2
4) Those who were Long and wanting to take profits
5) Those who go Long on new highs expecting the stock to go higher

So at the open every one had a view as to what would happen and traded based on that but by the end of the first 20 mins many of the above would have had reason to have closed the trade.

The reasons are irrelevant really as what matters is that an opportunity came along and I took it.


Paul

ok

Trader333 said:

Ron,

14.50 was about the time that all indices became aligned with each other. Also look how may shares were traded up to that point , it was nearly 4 million. The first 20mins was bound to have a lot of activity because the stock gapped by $3 and people would have had strong convictions as to what was going to happen to it. This would include:

1) Those who were Short from overnight and got caught by a $3 gap up at the open
2) Those who assumed that the gap up would close so went Short
3) Those in Long positions who sold and went short for the reasons in 2
4) Those who were Long and wanting to take profits
5) Those who go Long on new highs expecting the stock to go higher

So at the open every one had a view as to what would happen and traded based on that but by the end of the first 20 mins many of the above would have had reason to have closed the trade.

The reasons are irrelevant really as what matters is that an opportunity came along and I took it.


Paul

Click to expand...

Socrates' animal stories have now been split from this thread - they are now in the thread called The Journey from the Basement on this forum.

This thread is now devoted to the topic of trading using price bars and volume bars only.

There may be a few posts which have inadvertently been missed in the split, and these will be tidied up, hopefully in the next couple of days. After going through 1,600 posts I cannot see the wood from the trees!

Skim
A tree is known by its fruit!

No Inds - Basics

Given the recent 'rationalisation' of the two quite distinct lines of discussion on this thread, I wonder if it would be useful for me to re-start the ball rolling on the 'mechanical' aspects on No Inds?

As stated previously I am a real newbie to these arts and while hanging on by the skin of my teeth to Socrates work on JftB also need to accomplish the task of mastering comprehension of the inter-relationships of the various factors on the basic chart.

I'm going to define how I currently interpret the various aspects of the chart with the hope that those more experienced in their use can put me straight.

I wont be using physical charts or examples as my intent at this point is very much of an exploratory nature and I don't want to confuse academic or specific issues with the broad generalities I want to propose.

While many of the statements I am proposing are 'obvious', some might be quite naive and especially when we consider MM tricks I'd appreciate your inputs.

Volume
Increasing (parabolic) Volume - indicates significant support for the current price trend.
Decreasing (parabolic) Volume - indicates significant decreasing support for the current price trend.

Low Volume - price congestion. Value is agreed between bulls & bears. MM accumulation could be taking place.

Low Volume - price falling. Selling, pure & simple OR orchestrated price reduction by MM in readiness to pick up at low prices ready for the rise.

Low Volume - price rising - Demand greater than Supply - Buying pure & simple.

Range (High to Low)
Wider than recent average - disagreement of value.
Smaller than recent average - agreement on value

Action (Open to Close)
Open & Close are close together - agreement on value
Open & Close are wide apart - continuation or reversal of trend

Finish (Position of Close on High/Low range)
Close in upper part of bar - Bullish
Close in Lower part of bar - Bearish
Close in middle of bar - potential congestion or reversal


All of the above need to be taken in the context of Trend. Not just the lowest level you choose to trade at (5min bar in my case), but the next 3 levels up as well (15min, 30min and 60min) and the daily & weekly trend as well.

I'm not sure how we can gauge the probability of a trend reversal from the factors I mention or indeed, if we are at all interested in reversals - only in taking the meat out of an existing trend?

All help gratefully appreciated.

TheBramble said:

I wonder if it would be useful for me to re-start the ball rolling on the 'mechanical' aspects on No Inds?

Click to expand...

Thumbs up from me

I think you've made a good summary / generalisation.

As newbies, I don't think we know what proportion of the instrument movements are due to manipulation and how much to fear and greed of general public, which in turn affects the interpretation of 'rules'.

I think the more time we spend looking at charts, the more we will get to understand what is general and what is specific from past experience.

So it may be a good idea to post up charts, have people interpret them and see what appears to be general or specific, although each chart will be unique in its own right.

I still haven't had a chance to go through this thread again to understand all the lessons about 'mechanical' No Inds but I will get round to it!

So in the meantime I'll mainly be lurking

When trading using price bars and volume bars only, may I ask members whether they focus primarily on price or on volume, or on both together.

I find that volume disparities in adjacent bars are often significant in a change of price direction.

Salty Gibbon said:

When trading using price bars and volume bars only, may I ask members whether they focus primarily on price or on volume, or on both together.

Click to expand...

That was my problem in trying to dissect one aspect of price/volume from all the others. I don't think they can be viewed in isolation. Hence the proliferation of possibilities the more separate factors you consider. So yes, both together?

I was thinking about no indicators... and want to throw something into the wash!

An indicator is often or not created from the open,high,low,close and/or volume. Nothing in an indicator can't be seen by looking at a plane chart anyway. But they underline and highlight specific aspects.

Like OBV... underlines where volume is in relation to price movement and actually shows you something you would never see by just the raw data alone. Various other indicators just highlight rate of price change, change in relation to recent high and lows... highlight trends that can be muddied with the random noise.

Surely by cutting out indicators you are actually just making it harder on yourself to interpret a chart? Indicators are directly derived from that data anyway! Any differences between just using price/volume and using indicators as well... is actually an artificial one. You make life harder on yourself.

Heard of information overload? So much information that you can't interpret it... but when it is clarified, filtered, categorised, and highlighted... you actually aid the brain in interpreting that data. Filtering, pre-processing of information doesn't actually lose anything, it merely helps us from miss something important!

I apologise if this has been brought up and discussed before... Im new to the thread but have been meaning to post my view for a while. I presume this is no longer holy ground now the threads are split and anyone can come in and discuss things related to the subject. Is this a freedom of speech and thought zone now?

PK - could have done without the last para, but to address the other points...

Indicators themselves can be viewed as information overload. As you say, they work on the underlying price and volume data. Why get your information second-hand or through a filter?

The purpose of this thread is to investigate how we can use just the basic price & volume data rather than depend upon someone else's backward-engineered distillation of that data.