long term position trading -primarily etf's-
- Thread starter sowterdad
- Start date
A 15 MINUTE CHART -ATTACHED .
Taking this chart by itself- and throwing volume onto it-tells a mixed story-
Volume can open and have a strong higher close and sell-off the next day-Or, have a sell-off low close confirming the bearish sentiment- Only to rally higher the following day.
It would be useful to study volume with the larger time frame levels added on a faster chart to determine if buying volume occurs randomly- perhaps because of news or market sentiment for the day- or if it actually occurs with regularity at trend, pivot-predetermined support or resistance levels.-
If one could study volume leading up to a significant up or down move- and make that assessment ahead of the day of the move-that would be useful. It may be that VOL is like other TA- indicators- sometimes appear to be good confirmations of what may occur- and other times missing the mark altogether-
I think it is likely that points showing high volume should also demonstrate a corresponding wider move in the price bar--
For example- in the chart there is a high volume green bar at the close- but the closing bar was a Doji- it failed to close higher- A Doji is indecision- Could go in either direction.
In this example, Price sold off sharply the next open.But, the move could have also been to the upside. I would think that one could look for specific characteristics of some bars and the volumes to determine if there was a higher potential to gauge the next move.
Bulkowski did a lot of study of charts and patterns - and actually evaluated how often certain patterns were predictive- some more so than others-Volume is likely similar-
One other example is the 2 bar breakout move higher on large volume-That occurred in the 1st 30 minutes of the day- and the move was substantial-for those 2 bars- but the remainder of the day was flat- and price was extended from a momentum view-
Well away from the uptrending ema-line-
One thing that appears in this chart example- is getting into a trade once the large volume has confirmed the move- does not mean the trade will gain further momentum.
Had some free time today
12.2.15- I was not aware at the time that there was a terrorist-type threat occurring in San Bernandino CAl at 2 pm ET where a gov't facility was targeted and at least 14 people were killed by 3 gunmen. At this moment, It appears that the gunmen have been killed/captured- but there has not been any release of preliminary information- such as whether these were home-grown terrorists, or ISIS supporters - Perhaps this event simply contributed to the market sell-off already underway.
The market bounced back -and rallied from the slaughter in Paris last week. This Sell-off was underway due to Economic factors-
This points out that a chart is a fine instrument -to see what has occurred up to that point- in time. but awareness of the larger & changing macro factors - can influence even the best of chart prospects- at least in the shorter term.
"News Events" can cause a minor market reaction- or larger reaction - ( US Gov't on the Brink of Default) - an "Investor" has to be able to stomach these periodic hiccups, and wider market swings % wise.
I chose to sell based not on news- but on the turn from somewhat positive to overall negative- for almost all positions- and seeing profits evaporating and newer positions going negative.
It could be that the market rebounds Thursday or Friday-
Waiting on the Fed- The Jobs report- and the determination of whether these gunmen were acting as an extension of the terrorists.
Presently, The Dow has now turned negative for the year- and the other indexes slightly higher-a month remains for the year - and a lot can happen-
fOLLOWING UP-
While I wasn't aware of what was causing the across the board weakness Wednesday-
other than the dollar-that day- I closed my positions in the afternoon-At 2 pm- Shootings in Cal potentially added to the unknowns of what was out there- Terrorists? HERE? USA?
I can't help but add a personal bias comment- but if some "incident" affects the markets- it should be a consideration of a possibility to affect one's approach-
Additionally- While no one expects it to happen to them- victim of radical terrorism is far fetched- but what about victim of random crime?
One should be prepared for the unexpected- and not simply become a victim because one is thinking it will not occur to them in their lifetime- Similar to a stock position or black swan event. Stuff happens- Be prepared.
The jobsite i was on Tuesday- in Chapel Hill, NC went on lock down because of reports of a person with a rifle on the nearby streets midday- It turns out there was no real threat identified- but it points out that one never knows when a situation - personal- or financial- will take a sharp turn against what one expects. While some political agendas think that more stringent gun laws will be effective- they do not realize that criminals- or those with ill intent- will simply disregard those laws and get those weapons -
Since my wife and i - and our children have taken legal concealed carry courses-in NC- and they have been registered with the police- that allows them to carry a weapon for self-defense- That is potentially a personal stop-your -life -from unexpected loss A stop-loss of the major kind- They are aware that random danger could pose a threat to their life- much as a car accident is not planned against you personally- but it happens just because you were there.Right time- Right place- Bad luck for you. Random- Unexpected.
Yet, it can occur to any one of us.
Back to understanding the effects of the larger environment:
The purpose of making mention here is that my positions were responding en total to the weaker larger markets- Rising tides float all boats, but whirlpools drag most down.
Markets were weak initially -But was the market decline momentum increased by news of the shootings in Cal? 2 pm. big drop lower- coincidental? Did that shooting contribute to the decline in my position in tech? Pharma, defense? Did the external environment reach out and affect my trades? I think it was added negative momentum to a market that was uncertain. How can we not be affected by the slaughter of 14 people having a celebration
by the hands of people they had recently held a shower for the baby of the extremists?
It stands to reason that if one holds positions overnight- or for longer periods- understanding whether the larger environment favors the trade - is also understanding how much at Risk one should put on. Since i was "all-in" - and had just-finally- had a nice up day earlier in the week- I'm pleased that i sold when I did, but it came with only a few net small profits- and ended up back where i was before putting these recent trades on.
It looks as if this year could end up with the lowest market returns of the past 6 years- possibly even in negative territory? This period has been noted that it has been a very narrow market advance- relative to gainers vs losers- with only a minority of stocks performing in positive territory- the majority underperforming.
The larger Environment counts- Picking the right market segment- or stock- counts- in this type of "stock-picker's" environment- Isn't this where Hedge funds should be outperforming?
Chart of the SPY- 30 minute chart- Notice the large BUY-Volume bar at today's close.
While that looks to be a positive- I would be hesitant to go back in here, and think that price will go closer to the lower support level on the chart, before there is a substantial
move higher - Why do I think that? I have no clue what the non-farm payroll will report-
or how it will be interpreted. The immediate trend is down, and the support level I have on the chart will represent a dbl bottom.
Am i missing out-by going to cash- on a big momentum rally? I don't think so- but -should that occur- and i am left waiting for the account sells to clear - that's OK-
There are more opportunities in the days and weeks ahead.
Getting to 1 year in this thread, and time to regroup and make some decisions as to my own personal time and involvement- or trying to adapt an approach-
Actually, it's been over 1 year since i started this journal and i certainly haven't proven anything except that I can take some losses without going on Prosac!
Certainly it's time to consider some modifications- means and methods....
Following up on Thursday's chart of SPY- and the subject of the trading Environment-
Things looked pretty much downhill yesterday- and i was feeling good about taking my positions off Wednesday- and YES- Felt a little smart in doing so as i saw yesterday's chart in decline in the pm.
And then there was that little high vol hammer- dropping below 205.00 but closing higher- followed by a final high vol bullish hammer going into the close.
If I drop down to a faster time frame chart to view that 3:00 -3:30 bar, we get a swing low bottom, rally, followed by another lower test- dbl bottom- and rally higher.
I'm surprised it closed there- higher- and i expected to see it go lower Today- but did not count on the major "News" impact of the Jobs report being reacted to so bullishly.
The large Volume certainly suggests institutional buyers stepping in- and those that did were rewarded by today's advance. Oddly enough - and shown on this chart at the support line I have- the prior pullback back to the support line did not close on bullish volume- and so I then would assume that that level I defined as a support was not interpreted by the market players at that time to be a valid support level. It only now becomes one because it demonstrates a substantial lower swing reversing higher.
I'll post this 30 min follow up chart -2 pm Friday and see if I can drop down in time to view the past couple of days on faster bars and see WHY Buyers stepped in- and incidentally- looking to analyze if Volume was a tell.
Just worked through a few different time frames- 1 min was pos- 3 min bearish high vol,
5 min positive- I guess one could easily interpret different information-based on something as minor as a couple of minutes on a chart.
I think this last 5 minute chart points out that Vol can not be taken as an absolute indication-Has to be studied more through the price action.
The red volume appearish bearish-and is red because that bar on that time frame closed lower than it opened. The story is that the bar actually had had a greater decline and closed much higher than where it had declined to.
I think that is the correct assessment- along with holding next to the prior bar-
following the 1 day market rally, prices have declined the last 2.
Today -12.9.15 after 3 pm- I added a position in qqq & Hack on what appeared to be a n attempt to reverse some of the selling.
Chart is a fast 5 min chart of the q's- As I got some intraday screentime -late afternoon break- this pm - All of the indexes were lower- I started to step down in time frames to view the price action better-
Q's tried to make a bottom in the afternoon- and I took the move higher after 3 pm to enter on. Also took a smaller entry on HACK-
This entry could simply be a bear flag -on a larger time frame.
Tomorrow could add to the selling-
Not seen on the fast 5 chart- as I step out longer in time- the more recent price decline on Dec 4 also turned at this level.
I've been including Volume on some charts- and the PVO- Price-Volume oscillator-
and the MACD Histogram. As with most things aside from Price itself- indicators like this are built on the price action that has occurred, and Lag the price action.
I think the MACD histogram changes to the 0 line are worth taking notice of- and perhaps the best early entry is below the 0 line as the histogram starts it's 1st decline from a sell-off- Conversely- Often the Histogram starts to downtick lower from above the 0 line while price continues to climb higher-
In the attached charts- price has tried to base and move up into the close.One is a 5 minute chart- the other a 60 -
I have no idea where this trade will open Thursday- but i have reason to believe the selling momentum had waned this afternoon- and possibly price will open higher .
The price action I see is the primary reason to try this trade- but it is in face of a volatile market that cannot be trusted for trend traders-
Today -12.9.15 after 3 pm- I added a position in qqq & Hack on what appeared to be a n attempt to reverse some of the selling.
Chart is a fast 5 min chart of the q's- As I got some intraday screentime -late afternoon break- this pm - All of the indexes were lower- I started to step down in time frames to view the price action better-
Q's tried to make a bottom in the afternoon- and I took the move higher after 3 pm to enter on. Also took a smaller entry on HACK-
This entry could simply be a bear flag -on a larger time frame.
Tomorrow could add to the selling-
Not seen on the fast 5 chart- as I step out longer in time- the more recent price decline on Dec 4 also turned at this level.
I've been including Volume on some charts- and the PVO- Price-Volume oscillator-
and the MACD Histogram. As with most things aside from Price itself- indicators like this are built on the price action that has occurred, and Lag the price action.
I think the MACD histogram changes to the 0 line are worth taking notice of- and perhaps the best early entry is below the 0 line as the histogram starts it's 1st decline from a sell-off- Conversely- Often the Histogram starts to downtick lower from above the 0 line while price continues to climb higher-
In the attached charts- price has tried to base and move up into the close.One is a 5 minute chart- the other a 60 -
I have no idea where this trade will open Thursday- but i have reason to believe the selling momentum had waned this afternoon- and possibly price will open higher .
The price action I see is the primary reason to try this trade- but it is in face of a volatile market that cannot be trusted for trend traders-
12.10.15 TRADE NOTES-
What i like about this trade:
This was actually a Real time trade as i had the opportunity during the later day to see what was occurring- This is usually not available to me . Fortunately, I have a usually demanding day job - but had some down time - and after a few minutes assessment - I decided to take a long position on a higher move based on the intraday fast 5 min chart.
Go figure- I would like to try my hand at real time trading - But Thank goodness- I have a J.O.B.
That occupies and demands my normal day time hours- and incidentally pays me weekly a profitable return for my time expended.
Quite honestly- that is a serious advantage I may have vs those that seek to gain wealth through trading. And perhaps even those that seek to make a living through trading. It's a totally different personal universe depending on what one "depends on" to make a living- If trading is simply an investment venture - and not one's means to a live-li-hood -That is totally a different deck of cards altogether.
I find - at this point- I am still not a consistently profitable trader. I think this starts with not having a very focused and narrowed approach to the markets- and working out from there. While I may have to trade on EOD data- I can learn to make better entry and perhaps exits based on understanding the larger market environment.
That said- I believe a lot can be learned by dropping down into a faster time frame to understand the market's movements during a day-
In this example - a pullback and downtrend in price action had paused, a basing -sideways action had occurred.
This seemed significant enough that I took the latter day move higher as a move to go long on.
This provided a good early entry on a -next day reversal move higher- Had I been a day trader - with a large position- this would have been money in the bank.
With just 20 shares- this is not a significant move - and I would like to see this trade find some traction .
Friday (12.11.15) found the major indexes all selling off at the open- Crude prices dropping on oversupply- one reason- Some major restrictions in giving redemptions- in some funds- Getting testy out there-
I had time to take a snapshot during am break as my positions were stopped out.
I had raised my stop to just below my entry cost - and I was very pleased with my initial
entry on the faster time frame- and - although it became a losing trade-when the market went against me- I am still pleased with the entry I took- and am including this follow up
-not as a complaint- trade well executed but with a greater loss than anticipated.
Price gapped down, and my higher stop-loss became a market order to sell much below where I had set it- The sell order was filled within a few seconds of the open.
The afternoon price action I labeled as " troublesome" perhaps gave the indication of the building bearish concerns by market traders-
The loss on this trade was relatively small for the amount invested- I think $15.00 on a
20 share position- a bit more on Hack- for the loss there.
I could spend the weekend trying to decipher what the cause and effects are - and what happens Monday- but lots to get done on the homefront with unusual 70 degree weather in scenic NC this weekend.
As we get to the end of this year, time to assess what was done right- and what was done wrong- hindsight being 20-20 over the course of this past year . Education comes at
a cost- market can certainly extract it from me when I make poor choices or executions.
This "losing trade" is a good trade- and well executed- No complaints-
Hope to make future trades closer to the P.O.F and with the reduced risk of loss that such type of entries bring- along with proper position sizing.