Quote from hardyards:
I thought that I would follow through with a few more ramblings about volume because it took me years to figure it out and I use it to enter and exit once I have established the likely tipping points of the ES by other means.
I prefer not to discuss my software, my account, my broker etc, since I consider this is confidential.
However in a general manner I am happy to share my thoughts and conclusions thus far in the most incredible journey of my business life ... namely trading.
My Wife and I are New Zealanders, in or late fifties or in my case late late late fifties. We have lived in the US, Aust and Italy and 3 years ago on a trip from NZ to Spain we swung by Buenos Aires for our first taste of latin america. Well, we got off the plane bought some beautiful property in BA and we are still here ... never did the 2nd leg to spain.
We find latin/centro america just fascinating and we have arrived at a great time, but then timing is what it is all about.
Back to ES.
Once you have established your tipping point you need an entry. Remember, the better your entries and exits the better your confidence. The better your confidence, the more lots you will trade and that is where the real money lies.
Now, imagine that the ES is long with good volume on the bid and the delta is positive. All of a sudden the price runs out of steam. The brave longs try to lift it once more with heavy buying, this good be buyers on longer time frames, could be buyers scaling in, could be within a few seconds of an important TF rollover ie 3 minute, 5M, 13M,15M etc
Whatever the reason, there is very heavy activity on the bid at that price.
The very next moment the sellers jump in with massive action at that price or 1 tic below and that is the end of that upward leg and down she comes.
If you have learned to read the bid/ask activity, particularly failure under heavy pressure and average size of orders printed, and if there appears to be a clear 6 points back to the last TP, you will be onboard at the exact extreme of the price that you can trade at.
Maybe there will be a MAE of 1 point, but that is all that I would expect.
When the price approaches the last TP, you can expect some indecision and so you take some points of the board, bring your hard stop up to BE+1 and repeat the investigation exercise all over again knowing that what ever the outcome, it will be be profitable.
Now, I know that I miss some of the best action of the day because I have made my target within 60/90 minutes ... well quite frankly I just do not care because I do not go back to the screen until tomorrow morning ... mañana a la mañana.
For me, it is the number of lots traded that is doing all the work. The net points are simply there as a vehicle in which to load the trade volume.
If you trade solely price action, you will not see the epic struggles between longs and shorts as clearly as I do and therefore your MAE´s will be greater.
In the case of the above action that I have described you would see a white candle ( or bar) with better than average volume. To a novice this is bullish, to a good price trader it is a warning that something could happen.
I must come clean and admit that I have posted to this thread under "commanderco" This was an accidental login as I changed my call sign as a result of changing my trading style to include volume ... a fresh start and all that. I will have the Mods strike ComCo from the books.
Let us all have a great day.
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