shortterm price movement indicators

[bbmac]

hi

does anyone have any advice on possible short term movement indicators of price (ie up or down in the next ten minutes to 1hour,) or useful chart set ups for such. I am working on a scalping system and will share the results with any respondants.

thank you
bbmac

 

[Trader333]

Which market(s) are you trading ?


Paul

 

[stevet]

if you are not working at the exchange with the advantages of being at the exchange - it would be real real hard to be a scalper - but that does not mean you cannot just exit a position early and pocket a lot of small wins

so just use the normal entry position that you would use - but exit if you feel the position weakens

 

[mma]

try dmx - I think that was what it was called last time I used it.

 

[madasafish]

Try True strength index...

I use a 5,8,2 and a 5,13,3..

when the 58 crosses above the 513 (and confirmed with RSI) then up.. .. when down and below 0 down..


VERY susceptible to small moves so you must use another indicator to confirm it..

 

[ivor31]

I find just using yesterdays high and low values combined with overall mkt direction,macd osc and visual display of the order book works fine. I scalp the days highs and lows this way.The more news and greater volume the better.

 

[stevet]

scalpers buy at the bid and sell at the ask, are right on top of the action and pay cents per trade - if you cant do that - you will get burned trying to scalp

 

[Naz]

Scalpers dont only just buy the bid and sell at the ask on the Nasdaq because after fractions were eliminated the ecn's came in and closed the spread so tight that in many cases the spread all but disappeared and in many completely disappeared.
They use their direct access skills to work the order.

 

[stevet]

Naz

there is a difference between scalping or just trading for small amounts

people like to call themselves scalpers because it sounds sexy, but just looking to take small profits off market is not scalping

spreads on nasday stocks only disapear, or get crossed when no one is sure which way the market is gonna go and that may not be the best time to take a trade - expecially if you are working off normal delayed charting data - and as i have said before - ask and bid pricing comes with a heavy timing delay

one of my feeds is data only and is as fast as you can get and it still has a sizeable delay which i can see by the way that options respond to the stock price changes ahead of the stock price data feed changes

 

[Trader333]

stevet,

I have never experienced this delay you talk of in bid and ask prices appearing on the Level II screen and in fact quite the opposite. Whenever I place an order I do so in such a way that it gets displayed and there is usually something a little different about it so I can see if it has appeared. The moment I hit the transmit button its there with not even a 1 second delay. Are you talking about different instruments because I just dont see this for my orders on Nasdaq stocks ?


Paul

 

[stevet]

Trader333

that is interesting because i know you have said that before - and this delay is real - i wonder if its to do with when you take trades and how often and i guess you mean you are setting orders away from the inside bid and ask on a specific exchange? what are you looking at the order on?

i tend to only take a trade at a key point where the action is starting to build for a move, or during the opens and closes, and then the through put of data greatly changes - if you can imagine the ripple through of data at the different levels of L2 as all the different participants are changing price and size - any market wide moves have a hell of an effect on the bandwidth

and i guess also that what i might call a delay might not seem like a delay to someone else - but as i am looking at multiple markets, i see the ripple through of the effect of changes in priciing across the board, so even a fraction of a second puts you at a huge disadvantage, since you are then reacting to an event that is history

 

[Naz]

Stevet

I'm the same as Trader333 and do not experience any delay in my L2 data.I've been a Nasdaq scalper trading 200 times a day.How could i do that if i experienced a delay in my data.

I only ever found a problem once and that was in the first 15 mins of trading.The IT guy at the company i traded at told me the fault was the computer which he changed and the problem was solved.

 

[stevet]

Nas

you seem to be using past tense - and i am taking hundreds of positions each and every day now - with multiple l2 data feeds?

and we spend a lot of time with data suppliers hereing their problems with data delivery - so the data suppliers know they have problems - hence one of the most major just completely revamped their whole system becuase of it

and the problem has been increased as the use of level 2 increases coupled with the strains on the technical ssytems at the heart of all trading

and the fact you were taking hundreds of positons did not mean the data was right or wrong - but it would make a difference if the delay was part of what was causing you to lose - but if you were a bad trader - trading off late information - you might have ended up with winning trades!

all data is late and that is for sure

 

[Naz]

As a Nasdaq L2 trader i do not have any problems with my data.I'm still able to take trades before the move appears on a chart.I dont know if you're looking at the technical aspect of data transference or looking at it from a traders perspective.

If its from a traders perspective i think you're wrong and we shall have to disagree on the matter. 😉

 

[stevet]

Naz

i only know about the problem from a traders view - the technical stuff is just a pain - but i know i am not wrong from what i see each day on the screens - and i also know it from multiple data suppliers confirming it and explaining their problems and issues and how they are trying to impove it

 

[stevem12]

Stevet,

I`m intrigued about the delay you speak of. Are you saying that exchanges delay the data slightly, so those of us trading via the Internet are a second or so behind the real price?

In my trading of futures 90% of the time the price I see is the price I get, so I`ve not experienced this.

 

[stevet]

stevem12

i am not going to get into all of it - but some data is manipulated so that floor traders in the exchange have an advantage

not the emini data since that is on globex and is 100% transparent - but simply for technical reasons - there is a wide variation of delay for different traders using retail brokers

but that is different to the delays that concern professional traders - and you have to think of the effect in a fast market - not the average market

if you were long 100 es contracts and the market turns against you and you want to jump ship ( forget stops - you want out now) and there is a queuing system to get out and everyone is running for the lifeboat - a millisecond or whatever a small period of time is can make the difference of your order being in there before the others or before someone else pulls their size off the exchange - and that can be the difference of losing 5,000 or 15,000 or whatever

a lot of time is spent discussing milliseconds!

the key point is not to regard data as being in stone - the main trading signal is the last price of whatever you are trading - all the other data is reactive to the last price - it does not create the last price - so all other information is lagging to the last price

you may also want to consider that if most of the time - the price you see is the price you get - perhaps you are entering positions too early and not with the crowd

 

[numspar]

Sigma Bands

Hi bbmac
Have you tried using Sigma Bands?. They are an indicator used to determine os/ob areas. They provide high probability os/ob areas when the price pierces the 2nd and the 3rd Std deviation bands. With only a 2% (2nd Dev Band) and 1%(3rd Dev Band ) chance of the market going against you. I have found them to be a hell of a lot better than stochastics for determining ob/os areas.

I’m currently looking at intraday charts using Sigma Bands with settings of 21 CMA and 14 CMA on a 10min/20min TF, you might find this interesting.

For further info on Sigma Bands visit the faq page on the site below, they are charging $149 per month just to use them!!!!
http://www.traderiskmanagement.com/faq.php

But I’m using a free 30-day trail version of Wealth-Lab 3.0 which has a version of Sigma Bands in Chartscript programmed by one of its users. It doesn’t have the momentum bands as shown the site above, But it is FREE!!

http://www.wealth-lab.com/cgi-bin/WealthLab.DLL/getpage?page=WLD3.htm

You can interface Wealth-Lab with Medved Quotetracker to enable real-time data.

 

[Bigbusiness]

Hi numspar,

I have been using bands around the 21 SMA in excel on a daily chart but it would be interesting to know how they calculate sigma bands. What is the CMA ?

 

[numspar]

CMA = Centered Moving Average