S&P 500 & other indexes - intraday. Plus chat

[Pat494]

Me too

Closed for 1 point profit.

 

[Pat494]

Trying a short@ 1282.1
Stop 1287.3
Limit 1273.

Might be wrong but 1273 target looks a bit ambitious ?

 

[tim3]

Might be wrong but 1273 target looks a bit ambitious ?

You may be right the bulls are fairly strong today I based it on the pivot,will see how it plays out stop moved to 1285.

 

[wekim]

thanks rob, my thoughts:

Firstly and most interestingly you'll notice from the RTH open, price was in discovery mode and was moving down, looking for buyers to come in. It eventually found them at the Low Value Area (1). The Low Value Node/Area is an area of low traded volume. It is a low volume area because people did not want to trade at that price. For the area highlighted, sellers thought this was too low. Guess what happens? The price is then rejected and then it starts to move up again.

Price then rises for a bit until sellers come back in again. It then starts to sell-off and this time ploughs through the LVN (2). LVN's due to their low traded volume are easy to plough through. Think about it, nobody is there to trade at that price and so you usually get a long bar when these kind of levels break. This move eventually exhausts and then price starts to rise again.

I understand your reasoning but let me play devils advocate in the analysis leading up. Yes, there was little volume traded the first time price hit this level. It was rejected and bounced. However, the market was supported here and sellers decided it was too low. Why would you expect it to plow through next time? Why do sellers think that price is not too low the second time when earlier they did?

Its hard to recognize in real time. I'm gonna try to show the chart in real time, see attached. Image 1: The first time price bounces goes to that 1269-170 area, it is hitting a LVN from overnight session. It doesn't plow through, it bounces here. Image 2: As price approached the LVN for the second time, in real time the profile just shows it reaching the lower of the past hour's value area. And we're getting a large spike in volume showing that buyers are stepping up at these prices. Image 3: Only AFTER it develops value lower does it now become apparent that the area is a low volume area, separating the 10am balance area and the new 12pm balance area. Image 3 shows nearly where I took the entry. But why wouldn't I expect price to plow through the LVN to the upside?

I also just noticed that my entry was right at the line where previous support now flipped into resistance.. but didn't see that in real time

 

[robster970]

I understand your reasoning but let me play devils advocate in the analysis leading up. Yes, there was little volume traded the last time price hit this level. It was rejected and bounced. However, the market was supported here and sellers decided it was too low. Why would you expect it to plow through next time? Why do sellers now think that price is not too low when earlier they did?

Because the US equities session opened and re-established where value was as part of the process of price discovery.

Look at the facts:

a) There was an LVN set outside RTH

b) This LVN was tested shortly after RTH open and held. This tells money that sellers don't want to play down here.

c) Price reverses as money flows in the opposite direction but then buyers dry up before it gets the the ONH

So we have enough sellers around to hit ONL (proved) but not enough buyers around to push to ON-High...........

Where is the bias then? Who's got the greater weight of opinion, the buyers or sellers?

Sellers see buyers are weak and re-test the low. As it's an LVN, it doesn't hold.

Like I said, I just trade what I see, not what I think any more.

 

[wekim]

thanks as usual DT, this will give me more to think about when looking at the depth+sales

What a lot of people focus on when reading tape/DOM is on nailing point "D" and entering a trade there. It certainly is possible to catch a reversal point like that (esp if it's a reversal from a pullback) but don't make that all you look for.

This is what I've tried to do

If you focus on nailing "D" all the while, you may well find you keep jumping in front of Selling Pressure.
...
So - if you go by that alone, you are going to go through a lot of pain in the learning process.

and this has been the results

A->C - When a market is putting in a sustained move, it has a certain appearance on your tools. In this case it's a down move and we'd define that 'appearance'/behaviour as Selling Pressure. So, with all your charts switched off, spend some time focused on the DOM & learn to recognise those A->C moves.

Sometimes, you see a market moving down and down and down and down and all the time you have your finger hovered over the buy button waiting for the opportunity to go long. I can tell you I spent a lot of time doing this through extended down moves. The thing is, if you see this type of action - SHORT IT. Don't sit there for 20 minutes watching the market going down waiting for a long opportunity.

Yeah, since I'm looking for D-types, I'm always looking to fade instead of ride the move. Again its tough to determine in real time. What do you look for to show you an A-C type move? I am thinking consistent, 1500 prints through prices.
Like on the D+S, when its not the open or close, I would say 500 contracts on average will cause a tick change. When I see sustained 1000+ on multiple levels as price continues to move down, then I know that selling pressure is coming in.

But how do I know that the selling pressure will continue after I get in?

At A, I may see 1000 trade at 3 consecutive prices. At that point I have no way to know that its a sustained downmove. At B, maybes its at 6 prices. At B, I'm starting to wonder if the down move is exhausted.. and sometimes it is. But then I see another 1000 trade at 3 more prices (9 total) bringing us to C. I don't want to sell the bottom..

 

[robster970]

@Wekim - I'm going to have a look at what happened properly in a minute. I might see it differently. Give me 10 minutes.

 

[tim3]

closed +4
1276-1278 area seems good support,although still think we may hit the pivot later.

 

[KrakatoaJack]

Newbie Question - Someone got a link to daytrading stocks here on trade2 win or is it mostly FX

 

[wekim]

I'm trying to get clarity here cause in real time I have a lot of difficulty.

So we have enough sellers around to hit ONL (proved) but not enough buyers around to push to ON-High...........

No, not the ONL, but the LVN. Sellers couldn't reach the ONL and buyers couldn't reach the ONH.

Where is the bias then? Who's got the greater weight of opinion, the buyers or sellers?

The bias WAS with sellers on the open as the market discovers lower. Price bounced and then the bias WAS with the buyers (image 1). Value was established and discovered and balanced around 10am -11am. Price drifts to the low end of this from 11am-12noon (image 2). Up until this point, bias WAS with sellers otherwise price wouldn't drift down.

I can easily determine the PAST bias, but find it hard to determine FUTURE bias.

 

[robster970]

Give a few mins Wekim - I've got it open. I can see it quite differently now. Will post back in a few minutes along with some screens.

 

[robster970]

That took a bit longer. In chronological order as the session played out.

Picture 1 - overnight session from 21.30pm to 14:29 GMT:

Some things I can see from the overnight.......

1. Although the VPOC from the overnight session is near the high, there is a lump of liquidity around 69 - the area that bounced. Personally I would not have placed great emphasis on this.

2. It opened right under the ONH and tested that right out of the trap - I would have been watching this like a hawk.

So I would have been looking for buyer weakness around the ONH - as it moved materially higher than this, I would have held off until it showed weakness within a couple of points which it eventually did.

Picture 2 - the opening 45 mins of RTH

It took out the ONH but not by much. It weakened quite quickly where it sold off quite nicely. Note the point where it got to 69, the profile is quite boxy, it doesn't indicate anything. There was no way at this point you were to know this would become an LVN. The only way you could conceivably be able to read this is on T&S with sellers drying up which with some experience you can do.

Picture 3 - post 45 mins and your trade

This is where it's at. It sold off through the RTH-L - it just didn't hold and continued to sell-off. Getting short at 69 though is playing the support becomes resistance game. Maybe seeing this as buyers drying up on T&S in conjunction with knowing that longs will be hurting at this level.

It was a good call for the entry. What you could have done is held for a test of the new RTH-Low that was formed which is what it did before deciding to go north again.

So apologies for my previous synopsis not actually reflecting the reality of the situation.

To answer your question and how do you know when to take the entry? Screen time. You just start to see it after a while. The way it flashes, the rate of the orders, the stability of the DOM, call it what you will. After hours and hours of staring at it, you will know it.

 

[DionysusToast]

thanks as usual DT, this will give me more to think about when looking at the depth+sales



This is what I've tried to do



and this has been the results

Same thing happened to me, funnily enough... Hence me having a good idea about the outcome...

Yeah, since I'm looking for D-types, I'm always looking to fade instead of ride the move. Again its tough to determine in real time. What do you look for to show you an A-C type move? I am thinking consistent, 1500 prints through prices.
Like on the D+S, when its not the open or close, I would say 500 contracts on average will cause a tick change. When I see sustained 1000+ on multiple levels as price continues to move down, then I know that selling pressure is coming in.

Pretty much - boom, boom, boom - price after price. It does pullback but the waves are predominantly upwards.

You won't see this until you start looking for it. For that, you are going to need to switch off the charts for a few days. Tell yourself what you are looking for - signs of strength as opposed to signs of weakness & you'll start to see it. Then you recognize what strength looks like you can either go with it or at least stop fading it.

Once you get your mind into looking to see what it looks like, you'll see it. Then you'll also start to be able to pre-empt it. To see the pressure building as it wiggles around, seemingly without conviction which is what it often does before an explosive move.

If you want to visualize it before looking at the order book to see it - pull up a swing chart - 30 ticks is good for the ES...

Here's Selling Pressure.

Here's buying Pressure.

Light blue numbers - number of contracts in the swing.
White/Yellow numbers - number of ticks in the swing.

See how those micro pullbacks form? It's not purely moving in one direction. The pullbacks are tiny. You can see the strength. Note the size on those micro-pullbacks compared to the with-trend moves. Generally it's less size on those pullbacks.....

Did I mention those liquidity vacuums? (Understanding Liquidity and Market Pullbacks)

These micro pullbacks are (in my opinion) a symptom of liquidity catching up more than an attempt at a counter trend move, hence the lack of volume....

That's my 2c anyway!

 

[robster970]

I'm trying to get clarity here cause in real time I have a lot of difficulty.

.........

I can easily determine the PAST bias, but find it hard to determine FUTURE bias.

So the only way I can describe this is that I use know reference points of value and watch the T&S/DOM for changes in buying/selling pressure.

In the run up to RTH, I use the ONH and ONL as the extremes of value for the RTH session which will be tested under volume.

Once in RTH, I use the establishment of RTH-H and/or RTH-L to determine where 'new' value may be in relation to the ONH/ONL.

Additionally I use VPOC, naked VPOC, gap close, LVN's etc as other points that may cause a change in buying/selling pressure. I then watch T&S/DOM for confirmation of this and if it happens, I go along for the ride. There is no certainty to it. Sometimes it feels like a hunch, sometimes you know.

This might sound really 'new age' but pull the trigger when you feel it is right. If you're not used to doing this then it will feel weird for a while.

 

[Pat494]

It's in it's over lunch flat patch. But will shortly awake with some action ( when the liquid refreshments have worn off a bit - as it used to in Dirty Dicks ).

 

[Pat494]

Newbie Question - Someone got a link to daytrading stocks here on trade2 win or is it mostly FX

This thread is about indexes - particularly the S&P 500.

Do start a thread on stocks - would be interesting !

 

[Pat494]

It's in it's over lunch flat patch. But will shortly awake with some action ( when the liquid refreshments have worn off a bit - as it used to after a session in Dirty Dicks ).

I prefer the black line scenario but nowhere near enough points to jump in yet imho

 

[Pat494]

Action stations

 

[Pat494]

Action stations

That's my 1 point and done for another day !

Have a good night and see yas at sparrow fart

 

[JT_MOT]

Last couple of weeks have been a bit mad for me but I'm still following the thread, some quality posts that I am going to read again and digest. Hope to get back in action tomorrow. Current very rough and basic game plan is to try and catch a few point as we reach higher to around the 1290s/1300s and then I'll be looking for shorts. But who knows what might happen.

On another note has anybody bought Hedge Fund Market Wizards yet? Really looking forward to that.. always good for entertainment and a bit of inspiration as well.