Day Trading and Your Life.

[malaspina]

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.

 

[malaspina]

I lost some money yesterday. My bad.

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.

 

[DionysusToast]

Re: I lost some money yesterday. My bad.

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.

 

[malaspina]

Re: I lost some money yesterday. My bad.

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.

 

[DionysusToast]

You imply that day trading is all about trend following.

This is total nonsense.

 

[wackypete2]

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

 

[malaspina]

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.

 

[Lina]

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.

 

[malaspina]

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.

 

[malaspina]

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.

 

[EmotionIsTheBigEvel]

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!

 

[malaspina]

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.

 

[DionysusToast]

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.

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.

 

[barjon]

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

 

[wackypete2]

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

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

Peter

 

[DionysusToast]

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

Actually Jon - he hasn't said anything yet with the exception of an analogy about gasoline and volume.

Now - of course I showed volume to price - how else to show most volume occured at choppy areas and thin volume is what caused the larger moves.

Lack of liquidity can cause large moves and lots of volume can cause a market to churn. Of course, this is not as attractive as "volume is the gas that powers the markets".

I just showed a couple of cases where it is clear that volume does not equal price moves. Citibank has tons of insitutional volume but moves nowhere.

Perhaps the OP will flesh out his argument, or perhaps he will continue with fluff and not get down to the nitty gritty, in which case, he's shurely another 'Expert' :whistling

 

[Splitlink]

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.

I doubt whether volume is correct enough to be reliable for intraday trading. Maybe
EOD, but I'm not sure of that either. However, since I don't trade long term, that doesn't concern me. The "big boys" are, normally, too fast, I must be in before them. Getting in afterwards is too late.

I believe that everything depends on direction and entry price depends on being overbought or oversold relative to that direction.

Getting the direction correct is not easy and I am , like many others , often wrong, but that is what it is all about.

Volume is a confusing issue for me. The market can go up on low volume, down on low volume, up on high volume, down on low volume. Good luck to anyone who understands it!.

 

[DionysusToast]

Volume is a confusing issue for me. The market can go up on low volume, down on low volume, up on high volume, down on low volume. Good luck to anyone who understands it!.

The market has 2 sides - buyers and sellers.

When a large number of buyers and a large number of sellers both think it's wise to trade at around about the same price level, you will see volume but you won't see much of a move.

If any amount of buyers exist at a price level but less sellers, then some buyers will get filled against those eager sellers and some will not. Those unlucky buyers that didn't get filled will either walk away or up their offer to trade with other sellers wanting higher prices. If this is a considerable distance and buyers are still keen, then some of those eager sellers may become buyers too as they cover.

If we consider volume and price move here, then theres a few factors:
- how many buyers are there (or how many shares/contracts do they want to buy?)
- at what point will buyers start to become sellers?
- at what point will sellers start to become buyers?
- where is the selling interest above?

If there is considerable selling interest 15c above the current level, then the chances of price moving through that simply depend on the conviction of the buyers and sellers.

For sure, it is not as simple as looking at volume, which is why I showed a volume profile which surely shows where those areas of balance were on prior days.

 

[malaspina]

Hello,

Thanks for all the responds to my post. I would like to help you understand what I see in volume. I ONLY trade the emini nasdaq-100 Index Future (NQ), the active contract right now is the NQZ0. Would you like that I post a chart so I can explain better the volume and price topic.?

Please let me know.

 

[malaspina]

By the way, Mr. DionysusToast "Legendary Member", I am just trying to help the community, I hope with my ideas you could also improve your trading. Please feel free to ask me, I surely will help you in anyway I can.