If the nay sayers are motivated to help the newbies then explaining why they were unable to succeed would be of more value than proclaiming that it canât be done. Just because you havenât been able to achieve whatever goal you set for yourself doesnât mean it canât be done. You havenât failed. You have just found another method that doesnât work. If you want to help, you can tell us what that method was. Be honest with us and especially yourself as to why you fell short of your goal. Then you will have contributed something of value.
I've got a copy of the COT Bible and yeah it's pretty heavy stuff. I'm not about to scarper off and trade a Market that I have very limited knowledge of. Good post all the same...
Goldboy's (Surf?) comment is not unique. One does need an edge to take advantage of any move in any market with any confidence or consistency. The eGrains are not controlled by commercial interests and big speculators but these institutional individuals do utilize these markets for speculation and hedging like so many other small independent farmers and traders. All one needs to do is to track the individual trades each day in these markets to see that the majority of transactions are taken in smaller lots, regardless of who places them. Having had to deal with institutions in my past I know first hand that the vast majority of them place their orders to hedge on their business profits; whether they be grain producers, grain product manufacturers or livestock producers. These individuals place there positions over long periods of time and in smaller lots. Most do not watch & or speculate in these markets on a daily basis. They are only concerned with their long term positions. Oh, July 2010 eSoybeans executed a perfect short on open that was worth $.04 and another perfect short about 10 minutes ago for $.025. Average achieved & exceeded for the day and I'm done.
Choosing a selective time period supports your thesis. So let's take those who bought in late 1999 when the NAZ was at 5000. Where are they today? Given the complexities in the world today - from 9/11 to international terrorists to global economic issues and so on - buy and hold mentality is inferior to what a decent trader can accomplish. Also, many traders don't spend 80 hours per week. I spend 2 hours a day outside of market hours. So I spend about 40 hours per week.
In fear of sounding like a simpleton, were your covers based on momentum divergence or time of day or a combination or something else? Because you've picked the lows perfectly.
The two indicators you see on the chart (middle & bottom) are identical in their parameters. The difference is that the bottom indicator is based on chart volume that is 7 greater (slower) than the middle indicator. In this particular chart those two volume increments are; 49 volume bars for trading decisions and 343 volume bars for strength. The bottom indicator I use solely for a read on strength and the occasional exit; conditions are either, FULL UP, FULL DOWN or Neutral. The middle indicator I use solely as an indicator for my trade entires and the majority of my exits. When my entry indicator aligns with strength direction . . . . WOOOHOOO. When I'm in a trade and IMMEDIATELY see an oscillation created that doesn't align with the flow of that particular trade . . . I exit. Notice that both trades were taken were the bottom indicator showed that "Strength" or "Momentum" was FULL DOWN. Notice that the entry on the trade was taken from the exact point of a resistance oscillation putting me in the direction of that bottom indicator . . . FULL DOWN. My exits was based, in both trades on the exact point of the first "weak" support oscillation, in these cases, that was both extreme convergent histogram support oscillations. In MY world, ever oscillation on MY charts is a place I need to make a decision. If I'm not in a trade then each oscillation is a point where I either see reason to place a trade or I see a place to stand aside based on the specific outcome of that specific oscillation. These are the only two decisions that are relevant at that specific time. If I'm in a trade then each oscillation is a point where I either see a point to exit the current trade or I see a place re-adjust my stop and continue on in my current trade based on the specific outcome of that specific oscillation. Again, these are the only two decisions that are relevant at that specific time. I hope this explains the chart and yes your question was perfectly relevant.
Volume momentum, interesting concept, (or rather volume as a measure of momentum or strength). Currently the "main guts" of my system measures price momentum, trend strength, wave structure and cycle oscillations, obviously this is relevant to the markets I trade (stocks & forex) and may not work as well in commodities. However strangely enough I'm currently looking at ways of possibly using volume to "finesse" entries & exits, so food for thought. Thanks for the insight Prof.
Would not have worked in Mar 2008. In Mar 2009 traders would have looked pretty good. Someone said long term buy and hold is just a trend following system with no risk control.
Just to clarify, volume momentum is only relative on my charts because volume on tick or minute charts must be interpreted and we all know that interpretations are open to all kinds of idiosyncrasies. Since my charts are strictly & only based on volume, the momentum they represent is NOT open to interpretation. . . . and you are welcome.
Everything you have stated are exactly the same elements I reference daily on all of my charts regardless of their length. I will tell you that it works in stocks but has limited applications in FOREX due to the lack of accurate volume information from the bank feeds.