Trading the Dow using Volume and Tick

[justyn]

Not sure if this post belongs in this forum or not, I apologise (Mr Moderator) if I have wrongly placed it.

I am interested in discussing how to day trade the DOW using volume and TICK to time entries and exits (along with conventional TA) and just wondering if anyone else does anything similar or would be interested in chatting and investigating this subject?

If anyone is genuinely interested in discussing this topic I can anotate some charts to illustrate my ideas.

I already have some simple ground rules regarding TICK that help me make entries/exits and avoid making a panic exit when the market seems to accelerate in the wrong direction.

BTW when I say "day trade the DOW" I mean to trade once or more per day but probably not more than about 4-5 trades per day maximum.

Anyway .... if there is some genuine interest in this subject we'll take it forward from there .....

Justyn.

 

[frugi]

Hi Justyn,

There were some decent TICK/price divergences today which helped confirm some 5 point scalp/stop entries. The chart is cursed with an almighty pinch of hindsight, but I believe there is something in these divs and I've marked a few possible entries (of which I only took two). They seem to work best on rollercoaster ranges and disappoint on trend days, when perhaps one might look for evidence of heavy/program buying, big, regular, in-character 1000+ bozus, confirmed by price, especially at important time "pivots", and continued support around -200 to 0 on pullbacks, accompanied by geometrically clean waves.

My volume skills are extremely poor but "divergences", i.e less vol, on tests of h/l following a decent sized vol bar relative to previous ones can sometimes be useful, in the right context. Watching the price bars form on tests, especially their velocity and OHLC relationship can help, as can watching the volume bars &/or T&S - where is the heavy vol coming in and what's price doing in response? Again, on a different type of day, these so called climaxes & divergences may be just more fuel for the trend. It takes a lot more to turn an express train and knowing when it's a TGV not the Swindon Sprinter obviously helps a bit.

I'm not positing any concrete causal links, rather observing things that happen more often than not on days that have a certain character. I'd be glad to hear your findings (when you're not occupied with the little'un )

I'm sorry this may not be much use to you as my outlook is probably more short term. Still, if it kicks off a decent discussion...

Cheers.

 

[justyn]

Frugi,

thanks for taking the time to reply.

Unfortunately I don't have time to post charts this morning, I will try to do some tonight.

For now I'll start by stating the two extremely simple rules I am using. I have found that these rules help me to enter a trade when the price is just about to change direction and therefore get in at the best price possible.

1. When looking to sell, only do so when tick is high (+800 or more)

2. When looking to buy, only do so when tick is low (-800 or less)

These rules apply equally to entering and exiting trades although when exiting I should add "if possible"

Justyn.