Short term trading

[carl0215]

Isn't 'momentum' and all momentum based indicators based off price? How can momentum lead price?

A stock has momentum when it doesn't need any help from a dip (shit) to continue in its current direction.

 

[carl0215]

Think about what's happening in the order book where price has not yet traded. And that is how momo precedes price. I'll also add you should be able to see by looking left where the momo begins.

 

[murray t turtle]

Isn't 'momentum' and all momentum based indicators based off price? How can momentum lead price?

%%
As you implied, it does not. Momentum is price speedometer. It may get [lead,LOL ] one to get out of a trade waaaaaay to early ,LOL. So if one loves early indicators ,lead on , with momentum. IBD [ Investors Business Daily] newspaper uses them on futures charts, so some may like that lagging.........

 

[bigspeculate]

Think about what's happening in the order book where price has not yet traded. And that is how momo precedes price. I'll also add you should be able to see by looking left where the momo begins.

I don't think

Think about what's happening in the order book where price has not yet traded. And that is how momo precedes price. I'll also add you should be able to see by looking left where the momo begins.

I don't think the phrase 'momo precedes price' is referring to the order book. Just to technical indicators, that are based on last traded price.

 

[tommcginnis]

Taylor from 1950s made a book on Swing trading base on Momentum, has nothing to do with volume, and volume is not IMO a driver of price,
... But to trade Taylor Technique as he wrote it, never tested out well for me cause this type of timing is never going to be good enough for me to trade it as he wrote it.
Whereas Credit Spreads are much more forgiving if system delivers less than happy entry.

Ummmmm -- if I follow you here, you're recommending a book that wouldn't work for you, based on dismissing volume as being the other half of every trade besides price.
Ehhhhhh.
Errrr-ummmmmm.
Uhhhh.
No.

Any transaction is price x volume.
You ignore either at your peril.
Period.

 

[comagnum]

Wykoff (1873-1934) is widely used by a number of market wizards and still works today with astonishing results. Wykoff saw large volume as the catalyst for equities to stop or go at key areas - like breaking out of ranges. This does not apply to futures - at least not nearly as much.

 

[carl0215]

I don't think


I don't think the phrase 'momo precedes price' is referring to the order book. Just to technical indicators, that are based on last traded price.

Momentum applied to indicators to anticipate future price movement is hogwash. Traders don't enter positions when the market has momentum. Thus there can be but one other market state that has occurred. That area is where you want to see current momentum to enter trades.

 

[murray t turtle]

I don't think


I don't think the phrase 'momo precedes price' is referring to the order book. Just to technical indicators, that are based on last traded price.

%%
Never heard of it used that way; but if he makes a profit, OK by me

 

[murray t turtle]

Wykoff (1873-1934) is widely used by a number of market wizards and still works today with astonishing results. Wykoff saw large volume as the catalyst for equities to stop or go at key areas - like breaking out of ranges. This does not apply to futures - at least not nearly as much.

%%
Good points; + plenty of good moves with average volume, IBD like$ 50 day average volume as a stock helper............................................................................

 

[Gasparov]

Taylor from 1950s made a book on Swing trading base on Momentum, has nothing to do with volume, and volume is not IMO a driver of price, I believed lack of volume has small edge towards ends of move, there can be huge volume and price just stands there, but momentum you can see price moving and yes, sometimes can be caused by lack of volume but it is moving, might not be the best risk adverse trade though, just cause you can get in does not mean you can get out with a profit if no one going to take other side at what you see on screen.

Agreed, it's the way I was taught and I have never paid any attention to volume whatsoever. As long as you're trading during normal hours, the volume being 1/2x or 2x normal shouldn't matter. Of course, I'm sure if you're trading massive size, it might begin to matter more in terms of slippage.