Trading the markets as a daytrader

Im expecting once the stock turns lower again a short term low in the 34.80 range, by then it will probably be a buy again. As long as our set ups are there.
 
Well, the ADX is very low here, meaning we basically have no trend. Could be up, coudl be down, etc.

Thats why these indicators look to go one way and then quickly change courses and then back again. Thats whats been happening for the past 45 minutes or so. Maybe not that long a time frame, but, still, we are daytrading after all, and things can change quite quickly when you arent looking. Also, volume is slowing down considerably, both sell side and buy side, this could be due to Friday afternoon, or maybe everyone is like me and waiting for an indication or a set up.

Anyway, i still think we are trending down because the indicators are still close to overbought territory, even though we dont have a trend. Also, buying volume is very light, indicating a scarcity of buyers. Taht could also be attributed to Friday as I mentioned earlier.

Any thoughts?
 

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Well, it looks more and more like Friday Afternoon volume is the culprit.

The bands have narrowed, as shown, indicating the same as the low trending ADX, that there basically is no trend. It seems that we will tread water for the rest of the day as volume seems to have dried up a bit, so therefore, I have ammended my expectations. Now would be a good time to scalp some ECN's since there is little volatility and risk of being caught either short or long.

Looks like the gap from yesterday wont be filled today, probably early next week though. We have to keep an eye out for that.
 

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Hi Investorsources,

Although your thread is still new and just getting started...

I notice that those replying to you seem to be price action only traders or at least have commented in a way that they don't use ADX/DMI indicator via not mentioning it what-so-ever in their replies.

In contrast, you do use the ADX/DMI indicator (wasn't mentioned in your initial post) and since then you've been asking about opinions concerning your analysis.

Anyways...the links below are discussions by traders that's using the same indicator as you:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=21376

http://www.elitetrader.com/vb/showthread.php?s=&postid=886180

Traders that have discussed analysis via ADX/DMI:

Rickshaw_Man
mhashe
Truff
AMT4SWA
JohnnyK

Some of the traders above no longer are active posters but instead just lurk.

They do reply to emails and/or pm's.

By the way...I like your effort in trying to get to the meat of things.

Hopefully some rewarding info comes out of this for you.

P.S. There's something wrong with your SMH charts (missing data) or your data vendor for those charts...

Does that give you incorrect ADX/DMI readings ???

NihabaAshi
 
what missing data do you mean, It seems taht everythign is there. Are you referring to the rest of the days data, because if so, I have posted the chart intraday to discuss what may come later.
 
DMI, ADX, Bollinger Bands, Moving Averages, Japanese Candlesticks, blah, blah, blah. The best indicator I have found so far is to eye ball the stock chart and the $NYA and follow what the bid and ask is saying. If you see buyers buy, if you see sellers sell. If you are right 50% of the time but you cut your loses at the speed of light you can make a nice living.
 
Quote from Investorsources:

what missing data do you mean, It seems taht everythign is there. Are you referring to the rest of the days data, because if so, I have posted the chart intraday to discuss what may come later.
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Hi Investorsources,

Here's a chart of SMH from one of my data vendors (see attachment).

Compare our charts...your charts has too many buckshots price quotes.

My definition of a buckshot is when its just a horizontal line (Close = Open) and there's no High nor Low price...

That's an indication that your getting some price data but not all of it.

You also have too many gaps on your charts which is also an indication of missing quotes.

NihabaAshi
 

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Yeah, theres no question I am missing data. But then again i am getting my data free from Quotetracker for now until I open my online accounts. So it stands to reason that the information would not be 100%. I know this too as I am watching it happen.

Thanks for the pointout.

Also,

Man WTF was that at the end of the day. You see, you just never can tell when shit like that is going to happen.

1) Can you tell me one thing you can see in my chart or yours that woudl have let me know that this might have been coming.

Somethign in the price action, because when i look at the indicators at the moment the spike began, they were showing a slightly overbought state. Not overbought, but getting there.

2) Also, when you look at the spike. At the top there is a hammer, with no change and you woudl think the trend would go negative again, but it didnt. But it was right at the end of the day, so there might not have been enough time.

Somebody with some insight on this would be appreciated.
 

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Quote from Investorsources:

You know, I have done a lot of reading on these boards for the past couple of months and the last 3-4 weeks especially focused on understanding the tape and watching price action on five minute candlestick bars, level II screens and volume all at the same time.

What I have noticed is something alarming. You remember in school when you were taking calculus, linear algebra, statistics or anything of the like, and the prof would lecture and give examples on the board of how to solve the problems and you remember thinking, wow, this isnt that difficult and then you went home and did the assignment and other problems from the text and found that althought difficult, you could learn this stuff, but then came exam time and the problems that seemed so easy from the prof and the text, well, you got somethign that looked a little different, just didnt have the same easiness, and the prof decided to throw some kinks in just to make it difficult.

Well, that is what it is like on these boards when it comes to trading and reading the tape. Everyone talks a good game but when it comes right down to it, there is nothing tangible and concrete about what they are saying.

Let me give you an example. If you do some research, as I have, there was a thread started I dont know when, maybe someone else does, I believe it was discussing the importance of volume when reading the tape and that price and volume go hand in hand. Great, no problem, makes sense right?!! In that thread there was a chart with an example of what the person was talking about. I cant remember where the thread is, but basically the gist of it was that the stock in question was on a staircase upwards early in the day. There were three legs up. The first leg up had green bars with significant volume and the volume itself was on an upwards staircase, meaning that interest in the stock was strong, so it was good to get in. Great. The second leg up had lesser volume than the first leg up but the volume itself was still on an upwards stair case meaning that as the price increased, yes, there was more interest in buying. Okay. The third leg up had even lesser volume than the second leg up, but this time the volume was on a downwards staircase, indicating that the trend was about to change and that the stock would reverse. Makes perfect sense. Low and behold, the stock reversed and started to come down. Hence, the price action and volume indicated exactly that. I left thinking, okay, I learned something here. This is good. Study. Learn. Look at other charts. So I did.

Here's what I concluded. The same as the prof example, that was an ideal situation that cannot be applied to the average day in the average stock.

Have a look at this snapshot for example. I currently own this stock myself but I dont daytrade it, because I dont know how and am not currently set up to do so. I will in the short term future be set up to do so, but until I learn to daytrade, I will simply trade longer term time frames.

Nevertheless,

have a look at the chart for todays action and the corresponding volume.

Tell me what you see. What I see is a day that started out with some serious strength and then became random out of nowhere with no particular trend and I find myself lost. Just look at that volume bar just after 12:45pm. The sell side volume picks up substantially. The move to the downside? Basically nonexistent. Does anyone see any trends at all.

You see, that is the problem, taking what people say on these boards and making it tangible. Look, no one is going to teach anyone how to trade, any idiot knows that, but it would be nice to hear someone’s opinion on a day where things are strong, but yet no real pattern exists to trade.

Any other stocks and snapshots and examples would be great. Feel free to comment, criticize (which I am sure many will do and love to do) and add in depth analysis.
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Fu*ked up before you've started, right?
I'd say, stay away from trading.
:)
 
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