13 Nov very long red candle
21 Nov very huge volume
seems like RMBL is still trying to find the bottom of the bottom and it is approaching zero.
I don't use any indicators.
anyway if it works for you, do use it.
The Pinch Journal
- Thread starter .sigma
- Start date
13 Nov very long red candle
21 Nov very huge volume
seems like RMBL is still trying to find the bottom of the bottom and it is approaching zero.
I don't use any indicators.
anyway if it works for you, do use it.
Thanks for the reply! Lets get this going
Yes I agree, most of the time the big volume days are binary/earnings events. Its expected. The reason I point it out is because wherever there is volume at a certain price level, usually price will hit an extreme (high/low) then revert back to this price level.
A lot of times you'll see a huge gap down on an earnings event, then you'll see price drift down even more the following days, then.. eventually it'll exacerbate and price will correct itself and most likely will fill the intinial earnings gap. I've seen this a million times. These are just market movements I keep in the back of my mind.
@TheBigShort sorry if I'm being confusing, but I am not trying to ride the short squeeze. I'm trying to target where I think price is a good buy, and ride the pop up for X amount of ticks. I'm riding the effects of the squeeze so to say. I've traded short squeezes intraday but its too much work and I don't like watching stocks all day anymore, I like to swing these.
BTW, chart reading it just one trait of my methodology, I have more metrics I look at, but I'm not going to expose my entire blueprint, as many others here know as well as you.
I'm going to give you a small example in my next post hold on.
SERV - ServiceMaster
I traded this back in November 11. Shares too expensive so I bought the DEC 35 calls @ 1.15. I was early as always but I knew I was close to the bottom. Cashed out a few weeks later @ $4.77.
Now remember one chart tells a story while another might confirm your bias even moreso, this is where intraday and also weekly helps.. Weekly is the king, well monthly is but I usually use weekly.. THe chart below is SERV Daily, and below that is the Weekly, on the weekly you can see price hit exactly on the 200 moving day average AND it was at a nice support (VBP area) which confirmed my bottombias. While the pinch on the weekly wasn't pretty and not really considered a pinch the daily pinch confirmed my entry. Remember I also have a few behind the curtain metrics for entry levels. But this is a beautiful example of what I was trying to explain in the post before this.
I traded this back in November 11. Shares too expensive so I bought the DEC 35 calls @ 1.15. I was early as always but I knew I was close to the bottom. Cashed out a few weeks later @ $4.77.
Now remember one chart tells a story while another might confirm your bias even moreso, this is where intraday and also weekly helps.. Weekly is the king, well monthly is but I usually use weekly.. THe chart below is SERV Daily, and below that is the Weekly, on the weekly you can see price hit exactly on the 200 moving day average AND it was at a nice support (VBP area) which confirmed my bottombias. While the pinch on the weekly wasn't pretty and not really considered a pinch the daily pinch confirmed my entry. Remember I also have a few behind the curtain metrics for entry levels. But this is a beautiful example of what I was trying to explain in the post before this.
And @TheBigShort I'm in agreement with you about the views of technical analysis.
I realized trading successfully makes more sense going with a quantitative approach using derivatives. I know this and am working towards that path as well, but at the same time you gotta do what you do best and for 9 years I've been swing trading these types of plays, so I'm not stopping anytime soon. Hopefully the quant side can help and aid this strategy somehow and help in option trading as well.
I realized trading successfully makes more sense going with a quantitative approach using derivatives. I know this and am working towards that path as well, but at the same time you gotta do what you do best and for 9 years I've been swing trading these types of plays, so I'm not stopping anytime soon. Hopefully the quant side can help and aid this strategy somehow and help in option trading as well.
You don't need derivatives. You just need to have an edge. If I came to you and said show me the Pinch works. Could you? Not 4 graphs, but actual results, or a backtest that looks interesting coupled with some live trades. If you dont have the tools to backtest you should at minimum have an understanding of why it works.
I have skimmed over your posts and can not find a paragraph where you explain why the "Pinch" works. Put the charts down for a second and start thinking about what's really going on. Are you exploiting an inefficiency? A statistical edge? Whose lunch are you eating? You have to ask these questions.
Maybe you have all these answers and you probably do. I am just trying to get you thinking more "quant" like.
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Interesting! These are the type of responses that make me want to create a journal. Great questions and definitely things I am going to take into consideration. I do not know how to backtest but I've always wanted to learn. The only statistics I could show you is my account net net over a certain time-period.
Other than that I'm going to dive deeper. As far as understanding why the pinch works instead of pure visuals in charts, I'm thinking maybe I could measure the percentage decline of the stock from its past high and gauge how far down price will go until it eventually reverts back to a reasonable level (not an extreme). Theres many more features I could quantify like the amount of volume activity at certain price levels as indication of price movement.
I need to ask myself these questions. I'm not sure if I have a statistical edge. I'm willing to find out though.
Thats great dude! You seem very passionate as well. Keep it up. I am just trying to push your buttons a bit. Get you thinking.