Trading Dummies
- Thread starter Babak
- Start date
Trapper, given the 'fractal' nature of price I'm sure that you could take 'dummy' trades on any time frame really (from minutes to daily to weekly). The essence is the same, attempt to ride a trend via a risk limiting entry.
Razor et al. please put up visual aides!If you like pick one chart from among your trades so we can look at specifics.
Thanks.
Razor et al. please put up visual aides!If you like pick one chart from among your trades so we can look at specifics.
Thanks.
Hi folks,
My first post, so hope I don't get off to a bad start!
I'm new to dummies and find this really fascinating stuff.
May I ask a question, please?
I'm not sure what we are meant to be looking for in terms of "unusual/price volume denoting a liquid and volatile stock", as per the methodology.
For example, current day pre-market high volume? Or over the last few sessions?
How are we defining volatile? Using a measure of Average True Range?
Any guidance would be appreciated.
nimrodeo
My first post, so hope I don't get off to a bad start!
I'm new to dummies and find this really fascinating stuff.
May I ask a question, please?
I'm not sure what we are meant to be looking for in terms of "unusual/price volume denoting a liquid and volatile stock", as per the methodology.
For example, current day pre-market high volume? Or over the last few sessions?
How are we defining volatile? Using a measure of Average True Range?
Any guidance would be appreciated.
nimrodeo
Hey nimrodeo,
You're correct, it's all of the above. This system works best on securities with some movement and volume, for example, gap ups and downs due to unexpected earnings, mergers, upgrades, downgrades etc.
You could follow the news, stay on top of the after market and pre market movers and/or setup a filter on your scanner. And observe their movements way before the opening bell. After a while, you'd get a pretty good idea of what the security is going to do based on pre market action
Happy trading
You're correct, it's all of the above. This system works best on securities with some movement and volume, for example, gap ups and downs due to unexpected earnings, mergers, upgrades, downgrades etc.
You could follow the news, stay on top of the after market and pre market movers and/or setup a filter on your scanner. And observe their movements way before the opening bell. After a while, you'd get a pretty good idea of what the security is going to do based on pre market action
Happy trading
nimrodeo,
You're looking for the stock to be 'in play' which means that a lot of attention is directed towards it suddenly. Usually this is coupled with an event which puts a lot of people on the wrong side and gets others without a position to come in and take advantage of it.
We're looking for rel. high volume, high trade count (*a lot* of trades going off, not one or two big blocks), price volatility (gaps and such) as well as news (as already mentioned).
RIMM would be a good recent example (Sept 29 2005 and on Friday Oct 7 2005). It gapped down on negative legal news, the volume spiked and trade count was through the roof.
In the end this is discretionary, you will have to define what is 'unusual' - or you can decide to let a mkt scanner do it for you - or as I've mentioned you can pick a strongly trending stock and find 'dummy' intraday entries into the eod trend. Or play it as a swing trade via eod. Or develop your own personal tweak.
You're looking for the stock to be 'in play' which means that a lot of attention is directed towards it suddenly. Usually this is coupled with an event which puts a lot of people on the wrong side and gets others without a position to come in and take advantage of it.
We're looking for rel. high volume, high trade count (*a lot* of trades going off, not one or two big blocks), price volatility (gaps and such) as well as news (as already mentioned).
RIMM would be a good recent example (Sept 29 2005 and on Friday Oct 7 2005). It gapped down on negative legal news, the volume spiked and trade count was through the roof.
In the end this is discretionary, you will have to define what is 'unusual' - or you can decide to let a mkt scanner do it for you - or as I've mentioned you can pick a strongly trending stock and find 'dummy' intraday entries into the eod trend. Or play it as a swing trade via eod. Or develop your own personal tweak.