Quote from TimDog:
I was wondering how many people are using the .22 level of unusual volume to enter into a trade, and if they are always using the .22 level. The reason I am asking is bc to me the .22 level might not work in all cases. For example, based on the unusual volume sheet .22 is really only to be used for a stock that is in DU (also based on the UV sheet). So what kind of unusual volume trigger would you use for a stock that is not in DU.
For example, there is a stock with a perfect Bruno R setup on the daily, everything looks great for the trend to continue but the volume the previous day was 150%. Therefore entering at .22% UV by 11:00am the next morning wouldnt even bring this stock close to the volume that it has been doing. I know the answer that most people are thinking is to just figure out what kind of volume is needed to exceed the previous day based on the UV %, but is that what everyone is doing, plus volume almost always settles down in the middle of trend to lower levels before making a 20% run.
Anyways, just wondering if others can share their ideas on unusual volume and how they use it with stocks that are not in DU or stocks that have shown a significant volume increase the previous day. TIA
Yes I use the UV table for my trading. I only apply it to the DU list that is generated each day. I have only used it for a couple of weeks and there have been few trades to enter during that time. One was BITS yesterday. I entered into the trade at 10:32 at a price of 9.80 and exited sometime after 11:00 when it hit the top of the channel at a price of 10.20.
I classify my stock trades using a color code of green, yellow, and red. A green stock is near the bottom or mid channel with at least 10% from the previous close to the upper channel line. A yellow stock is the same but with less than 10% to the upper line. Red stocks are within 5% of the upper line and are not suitable for long positions.
For today, the following categories applied: NVEC and MIKR were green with scores of 28% and 55%. ININ was yellow with a score of 8%. SIM was red with a score of 5%. Of course the score is directly related to where you have drawn your channel so results vary from one investor to the next.
As to using the UV table I have found that I have to adjust the percentages listed in the table. I believe the table assumes FRV is 60% of the 65 day average volume. This is often not the case. I get my FRV value from the Wealth-Labs chartscript that Spydertrader made available. As a result I have to adjust the percentages that I am looking for. Here is the formula I use:
Step 1: I divide FRV by the 65 day average (from whatever source you use). NVEC today was FRV=735800 and 65davg=565500. The result is 1.30. ( I round off the volume figure to the nearest 100.)
Step 2: I multiply the UV table number times the number obtained in Step 1. The number in the UV table for the first 30 minutes of market activity is .1 (10%). The result is 1.3 * .1 = .13. I then use .13 * FRV for the first 30 minute volume target. NVEC would be 735800 * .13 = 95700 (rounded). The second fraction would be 1.3 * .17 (from the UV table) = .22; 735800 * .22 = 161900. That would be the volume I would look for from 10:00 to 10:30. Finally, the 10:30 to 11 time frame would be 1.3 * .22 (from the UV table) = .29; 735800 * .29 = 213400. If volume has not triggered by 11:00 I am finished for the day for that stock.
Step 3: Repeat Step 1 and 2 for each stock in the DU list.
Triggered volume must be confirmed by MACD, STOC, and PRICE.
My initial target for all green stocks is 10% and I hold overnight if volume confirms. For yellow stocks I am looking to exit at the upper channel. I will hold overnight if volume requirements are met. I use the Ross rule (2%) for my initial stop and switch to 5% below the close if stock is held. But as I said there has not been many opportunities to enter this month.
I do not short stocks but if I did I would use the UV table in the same manner.
