Spydertrader's Jack Hershey Equities Trading Journal III

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I have a question regarding how I should hold into a retrace, and what signals I should look for when exiting for a wash or loss.

With NVEC I bought on March 23rd on FRV from DU and it met all the proper buying conditions at the time. Following day there was price improvement(closed down though), and barely made FRV by EOD. Today price dropped further on decreasing red volume. The current gaussian trend is B/\R, and appears it is in DU again. At this point should I still be holding, and what should I look for in regards to price and volume(gaussian formation) to make this decision.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1414004>
 

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Quote from Monkman:

At this point should I still be holding, and what should I look for in regards to price and volume(gaussian formation) to make this decision.
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At this Point both NVEC and LQDT look like retraces (Price moving Lower on Decreasing Red Volume), but you need to make sure and monitor in case Price starts to leave your channel (and turns to increasing red Volume). Of the two, LQDT doesn't look as good as NVEC (simply due to the distance Price has already traveled.

In terms of what to look for, you need to decide what type of trader you want to be. If you want to trade the FTT's, then you'll want to monitor as Price moves from point One to point Two - monitoring for decreasing black volume and watching to insure Price stays "in the tape." If you want to trade Point Threes, then you'll need to monitor for increasing black volume as Price begins to traverse the channel from right to left.

Ideally, one wants to enter and exit at times when money velocity is highest (when you can make the most money per unit time). In the beginning, however, a trader needs to make sure they stay 'on the playing field' in order to make a profit. At the same time, a trader wants to avoid 'out of bounds' areas. As long as Price stays within your 'tape' or channel, you are good to go.

- Spydertrader
 
Quote from Monkman:
At this point should I still be holding, and what should I look for in regards to price and volume(gaussian formation) to make this decision.
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This seems the same discussion ongoing in the Futures thread.
I found the following post is really helpful.

http://elitetrader.com/vb/showthread.php?s=&postid=1412974&highlight=FTT#post1412974

So, after price peaked on 3/25, the price
- didn't hit Left Trend Line. (FBO)
- didn't create a volatility expansion. (BO)
Therefore, 3/26 bar must be a FTT.

We haven't have the point 3 to confirm the down trend yet.
So, we should keep monitor how the price and volume develop tomorrow.

Hope this helps,
-- UriKai
 

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Love the 3 yrs of journals, very rare here. Simple question. Has anyone ever written an excel calcualtion of the dryup vol calculation with qcharts. So in theory someone could look up the dryup volume history say for a stock that is in the current universe but for 1 yr ago? I apologize if it was posted before.

Rehoboth
 
Quote from Rehoboth:

Love the 3 yrs of journals, very rare here. Simple question. Has anyone ever written an excel calculation of the dryup vol calculation with qcharts. So in theory someone could look up the dryup volume history say for a stock that is in the current universe but for 1 yr ago? I apologize if it was posted before.
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Thank you for the kind words. I hope you continue to find the information compiled here helpful to your efforts.

While I do not recall anyone posting such an Excel Sheet, keep this in mind: That same stock would also need to have found itself actually in the Final Universe one year earlier. Otherwise (Dry Up or Not), it would have never made it onto a list of stocks to monitor. To be helpful to you, an Excel Sheet with the functions you see would also need a method to track addition date to and deletion date from The Final Universe.

Good Trading to you.

- Spydertrader
 
Spyder, you are absolutely correct. However, my intent of the question was just to see the evolution of dryup volume for a stock on a day to day basis.


Rehoboth
 
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