Interesting chart...thanks. None of this is fast, simple or easy. I always have to laugh when people say look for one simple system design that work in all markets.
1. Volume 2. Range 3. Price In that order. The rest of the stuff you need is not technical. News FED activity Macroeconomic stuff If you look at this stuff you can build a profitable system on any tradable item. Then it just comes down to ease in implementation, costs to trade, etc.
Oh yeah---time, especially the realtionships of time frames. Longer timeframes trump lower time frames so an edge exists by reversion to the mean if a short term timeframe is stretched (in either direction) in relation to longer timeframes---Mar 09 to Dec 09 for instance c/w July 07 to Mar 09 c/w 1995 to 2000 for example
So to sun it all up without giving up the goose ; ) Volumu confirms the reality of a move. I look at volume in leading indicators for instance. A volume brakout means something just figure out WHY! Range tells the same story range x volume is especially powerful as a technical indicator as to the significance of a signal. Price tells you direction. Time tells you how to put on the trade--how long how much and when for instance---the next minute, hour, day, week, month. Fundamentals color the outline drawn by technicals. Then leverage up appropriately depending on the risk/reward. Cheers
Leaders and Laggards is a good source. When leaders have a significant volume breakout to the upside they are leading---hence the name---other equities whereas laggards lag. Use these combined with voluma x range and voila you almost have a system
My 2 favorite indicators are: Up means Up Down means Down Then: The trend is my friend. After that: Candles a custom ATR overlay line showing resistance and breakout range TSI (True Strength Index) Chandes Momentum CCI Volume There are 3 trades on this chart that I played today. From a double tall monitor trade station.
Time looks important on that intraday chart. opening range, late morning drop, lunch slowdown, afternoon reversal, close at VWAP
The indicators as viewed on your chart summarize those listed indicators which make it easy to interpret while on the fly in real time. Price indicated direction, volume denoted the significance, and range the limit given the strength of the move all orchestrated by the time of the day. Nice job as long as you made money.
With my rule sets it works 100% ... but it is boring. (This week I will be working on a special ATR coded indicator in another market to use as a leading indicator.) I'm pretty excited about it ... It should let me take twice as many trades once it proves itself. Today I modified the rules to take slice trades off the CCI. Same rule set but with an automated quick scalp versus the standard 25-200 pip run. BTW - it is currencies ... but I use the same setup with stocks or futures ... except with stocks I use a coded SPY and coded GLD line over candles to detect large market confidence on about 60 issues that reflect broader market trending.