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TriPack
Registered: Feb 2002
Posts: 1757 |
07-11-02 04:31 AM
Here is what your screens should show, at the LEAST:
2min, 5min, 15min, Daily chart (of whatever instrument you trade)
5min chart of Nasdaq Composite
5min chart of QQQ's (you are going to be looking for divergences between the QQQ's and Nasdaq Composite intraday)
5min chart of the Dow
5min Tick/TRIN
2min SP Premium chart (this is the difference between SP cash index and SP futures)
5min SP futures chart
15min SP futures chart
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TriPack
Registered: Feb 2002
Posts: 1757 |
07-11-02 04:31 AM
A word on the QQQ's:
People, the QQQ's trade well ahead of the market and the participants in the QQQ's know well in advance the overall trend. They have the order flow, so they are the immediate trend. It is imparitive that you learn to use your level 2 software to see ISLD participants in the QQQ's. With some practice and a trained eye you will learn this. I will go into detail regarding the QQQ's later.
A word on ISLD ECN:
This is the ONLY ECN that matters in trading. REDI, ARCA, BRUT, INCA (yes INCA), and all others are garbage. There is simply too much liquidity on ISLD to refute my argument. I know that INCA just bought ISLD, so don't come running with your posts on how they are one and the same. INCA is INCA on level 2 and ISLD is ISLD on level 2. Until they become one we will take it as it is.
We are going to start with intraday trends and work our way up to daily trends.
For intraday trends: Look at your 5 min chart of the Nasdaq Composite over a 10 day span with 5,20,40 period moving averages. You will see the "magic" that this market is hiding from you. More on this later.
get back to me with your thoughts.
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TriPack
Registered: Feb 2002
Posts: 1757 |
07-11-02 04:33 AM
what is an uptrend? what is a downtrend?
Trends are only identified by your 5 period moving average on a daily chart. That is your immediate trend. What you'll need to understand is that on a daily timeframe equities are trying to move away from and back into that 5 period moving average. THIS IS THE BASIS OF THE STYLE THAT I AM SHOWING YOU.
One more time.....Stocks/futures are, on a daily basis, trying to MOVE INTO and MOVE AWAY FROM the 5 period moving average ON A DAILY CHART.
It is massive movements away from the 5 period moving average that are going to make you lots of money. Because when your stock or futures contract diverges away from the 5 period moving average (5MA) it will have a tendency to "snap" back to the 5MA.
Can anyone tell me if there is a GURU out there that is teaching this concept?
Look at a chart of the QQQ's on a daily timeframe. Setup a 5 period MA and COUNT how many times the QQQ's touch the 5MA from the top of a trend to the bottom of the trend. ANY TREND , ANY MONTH, ANY YEAR.
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TriPack
Registered: Feb 2002
Posts: 1757 |
07-11-02 04:35 AM
Stochastics:
Go and read a book on what a stochastic is. I am not going into detail on this subject.
All you need to know about stochastics is that you will need to setup the stochastics ON ALL CHARTS using parameters that follow: (15,5,3)
All other indicators are useless, except for volume (and don't color code volume cause I am going to teach you how volume is not what you see on your charts. It is exactly the opposite.
Stochastics
Here is an example of stochastics on a daily chart. The stochastics stay below the 20 level and move sideways as the stock sells of POWERFULLY.
http://www.elitetrader.com/vb/attac...s=&postid=87182
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TriPack
Registered: Feb 2002
Posts: 1757 |
07-11-02 04:35 AM
Trends:
By now you should know that while in a trend, the 5MA is your point of reference. Where the stock/futures is in relation to the 5MA is your only point of concern ON A DAILY CHART!
Everything I will teach you will relate to the current market environment, not what the market did a year ago or 2 weeks ago.
When trading intraday, the 5min chart of the Nasdaq Composite is how you are going to identify the current trend. We will go into this next.
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TriPack
Registered: Feb 2002
Posts: 1757 |
07-11-02 04:36 AM
5min Chart of Nasdaq Composite:
How do you use this chart?
Working with this chart will define you as a trader.
Every trend in the broad market starts with a bottoming process, followed by volatility, and then what I call "the 5MA" test.
The market first bottoms, you are not concerned with the bottoming process, but what is of concern to you is when the Nasdaq bottoms, then wiggles around, and finally hops on its 5 period MA and starts a trend. When this trend starts it usually ends at the close of the day, since, sentiment can change the following day.
Look at a chart of the Nasdaq comp on Friday (6/5). If you look at how the stock opened (gap up) and noticed where the 5MA was in relation to price, you would have noticed that once the composite hit its 5MA it hugged it and rode it up all the way to the close. In the meantime, you had some volatility and the 20MA served as support to knock it back up above the 5MA (at around 12pm ET).
What this means is that when a stock opens up for trading you have to be aware of the 5MA and where this moving average is in relation to the opening price.
Look at Wednesday's session. The gap down open, but the 5MA is far away from the open, overhead, and the composite moves towards the 5MA, 20MA, and 40MA. The 40MA is the pivot that sends the stock back to new lows.
More to come
SE
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