First of all I would like to thank you, Jack for taking the time answering my ?s, and especially thank you for posting that chart. âCheck your stack of calenders where you have marked the days you have looked at volume. I could be running around 15,000. I'll give you five years or over a 1,000 business days it actualy could be less for you.â - Ha ha, yeah I could say I really havenât spend that much time Here is a word for you. Purposefully. A carpenter with 20 years experince may have just repeated the first year 19 times. â Kinda reminds me of myself. Iâve been studying the markets quite intensely. I imagine I can sure talk like I know about the markets, however only problem is I really ainât making any $$$ About that chart that you gave me⦠Jack, I ended up creating an indicator that plots a red bar if price is below DU volume, a yellow bar if volume is between DU volume and FRV, and a green bar if volume is greater than FRV. When you get a bar (30 min) that meets the FRV requirement do you use an indicator to show the direction and go that way, like if the fast line on the MACD is > than the slow line buy, and if the opposite go short? I really like by using DU, FRV, and Peak how you define volume, and of course the PV relationship. Jack, is there more material that you have on the PV relationship. Iâm very interested. Thanks
My comments below sort of combine a few things. You are keen on inventing stuff. the colored volume bars. I don't color them but they do follow a convention from the platform. It is above average and the platform designers were sort of lazy. The chart I posted works on lists so no charts are involved. Let's say I am setting up for the week and its the usual. What I am going to do is make money. I do have money in each stream of capital and it is invested in a stock. Durng regular hours the markets show net declined year to year. At night when the markets are closed, over the years there is a pretty steady gain. The net of 24/7 is positive over the years. This is where buy and hold comes from and why balancing portfolios came into being for financial analysts to have jobs and charge fees. THeir performance level is a standard for many many people. I use the crayola standard, however. To use the list to make money, you have to put the right stock symbols on it. The rest is just fun. So learn to make lists of stocks that fit into a batting order for each stream of money you are running. Have the batters bat in turn by just using the timing of their cycles and how a few batters for each stream can do the trick. Those three questions and the scoring do the trick. The IBD meeting 5 (June of 2006) where the transcript was redited is a good one to read and annotate. It is called "Putting the Pieces Together" and it illustrates a person using 100,000 dollars in four streams to make 1,000,000 dollars by trading for 100 business days or less. There you see four batting orders in my hand writing and there are three stocks on each team. Two pinch hitters, as well. We made the notes on a Sunday AM and the narration is how it goes on Monday. The notes set things up for the whole week. There are 31 pics of the "unusual volume" on the batting list. for Monday. It just took some pics and a narration to come up with the example which is 70 pages in color. This is just business as usual for me when I am mentoring a local person. The concept is that taking 100k and 100 days and becoming a millionaire can get the person ready for making money and doing a business plan. You can figure out that if a person starts with 10,000 dollars he gets to 1,000,000 dollars by doing this twice. 1. choose the stocks. 2. put them on a list. 3. monitor. 4..trade as required. 5. repeat 100 times. You aren't making money. That is fine and even good. You are being told to make money and you are creating a desire to do it. What comes next is just recognizing how to do it quite well. It is obvious how to do it and make money. You use cycles and you always know how the cycle is going. You only use top quality stocks that do what you want them to do. They are chosen automatically by thier quality and the list length is adjusted to make it the same length all the time. So all the stocks you trade are clones that do the same thing. You put them in betting line ups and make money with them. Beginners do it Intermediates do better Experts do some tweaks that make the above roll along quite a bit faster. Someone will post here where to go for what you need to get going. It is all over the place and listed in the journals I, II and III. Later this year we will finish up the expert parts. Most people work for about a couple of years getting to rich starting from anywhere. At some point it clicks for them that this template can be used anywhere also. When that happens and it is fun to go through, then the person is sitting in a neat place. He readily sees what others preceding him are doing and he gets with doing that. Everything in the person's like takes on new meanings. He can do as he wishes with his time and money. Giving people purposeful and critical path methods for going the route is now down pat from our point of view. Communicating this is not too easy since it is best done by going to where the person is and bringing them forward as rapidly as they adopt a purposeful orientation. Most people want to postpone being rich because they are driven to "invent" instead of doing "batting practice" which is how getting purpoesful of getting experience is done. To see what making 1,000,000 million dollars looks like takes a weekend and about 50 daily charts 6 months long. You just start six months ago and log your trades on the those stocks you chose by sorting to get the list. you start with 25,000 in four streams and you have batting orders working for all four streams for 100 days. Take out a 10B and do the math so you can see how many log sheets you need before you start. Post your results on Monday. This will give you a nice booklet and it is a story of how to turn 100,000 dollars into 1,000,000 dollars during a five month period leading up to today. You will think you wished you did it six months ago. Or work harder for the weekend and do 200 days worth where you take 10,000 to 1,000,000 dollars. As a person does this he gets to see that the template can be used elsewhere. Then he just changes gear and does a practice run to take one contract of ES up to ten times what he started with and then repeat that 4 more times. Here in et it has been noted that people using this teemplate at an intermediate level have had 3 100,000 dollar days thiss year as they operate at the 20 to 30 contract levels going up from 1 contract not too long ago in days. yuo can see that if you profit by 100,000 dollars that as the day goes by you can add several contracts during the day. Again you have to do the crayola assignment on the ES and start frome one contract. Most people cannot make any sort of decision to do any of these things. The reason stated most frequently is that they cannot afford to spend the time compared to other more important things that they choose to do. One person here has consistently memorized and collected everything for six years and he keeps deciding to not do it. He has proven to himself that he can't do it nor, since he can't , the other people doing it really can't do it either. Except that they are doing it. What I think is very neat about making money in the markets is how fast a person goes from one level to another when he works purposefully. It is so different than what all the people you know are doing. the chart I posted is kind of neat because you do not need to have any chart to look at. You have real time data coming into the list and you sort by the "unusual volume". The list is automatically arranged to the correct batting orders. I know it seems to take all the guessing out of it and it makes a lot of money very rapidly. All that had to be done was make the chart for people to use once the platform people got unusual volume thought up to make is automatic. Before that it ws a little harder, you had to do it on a log. during the day. I kept a case of my logs from that period when it was manual on sheets of paper.
I use three ranges of volume to describe the trading cycle: Du; FRV and peaking. Dry Up ; First Rising Volume; Peaking volume There is also a scoring of P, V, and A/D where A is accumulation and D is distribution. You can think of the combination of A and D as the sentiment of the market. The trading cycle begins by the volume declining to a very low point. At this point the price reaches the trough of the cycle. Knowing that you are at the trough is very good because it sets the scene for making money by going long in the very near future. The name for this low volume is Dry Up. In my opinion there is a total disagreement on the value (price) of the instrument by the owner and the potential buyer. They also disagree on everything else. Anything can change opinions over time and this is reflected in greater agreement on value. I call this greater agreement First Rising Volume By spending time looking at market over 50 years, I have reached some conclusions on the way these things come about. As time passes the platforms catch up to what can be done and they add coding to be able to automate what is known. This week I spoke with Fidelity's David Avid. He called as we agreed when we met in NYC. He does not have on Fidelity's platform anything that can handle this type of monitoring. For Fidelity it will not be in the cards for a while simply because they do not understand the advantage to their clients to be able to time the markets precisely as yet. The concept of pro rata volume measurement is a difficult concept for the financial industry to get its arms around in 2007. In a few years it will become SOP. This is similar to using 12,26,9 on MACD. It not longer works because of he invention of the pc and real time data transmission. This cannot be understood by many platform providers nor people who think us trading approaches (See SPM for example). At some point MACD was adjusted by many people. Because I was the MACD contributor to the Q and A of that time period, the MACD I defined became the standard. (5, 13, 6.). This change prevents "bridging" of the indicator across peaks. So what is at hand here is that a platform came up with a pro rata volume measurement that is poor. It is poor because of the reference volume used. were another reference volume possible, then the pro rata would be more precise. What has to be precise is the connection to the signal and the money making action. the signal is the start of a clock and the money making action is the buy timing window relative to the clock start time. The first platform where this became available named the pro rata calculation "unusual volume". Previously, I had to log this data manually on log sheets and price charts. So now a list can be sorted by unusual volume using continuous real time volume and price data. This makes it possible to time the markets for doing several aspects of expert trading. As a trader goes through itieratively refining his approach and his tools it becomes more and more eveident how much money can be made. I have many detractors who have not, as yet, had the experience of continuing to refine their practices over 50 years and through a lot of technological changes in the financial industry. I try to present a perspective as a consequence of working purposefully over an long period of time. The unusal volume chart and the illutrated document on the topic puts these pertinent pieces together. For the fun of it you can make up lists of various types. It is routine to sort stocks to have a universe that yields about 2 1/2 % a day over the years postiion trading. you can do lists that are sublists of the universe and simple have batting orders that double the 2 1/2% a day average to twice that (5% a day). After that you can make selections that perfom at twice the rate of the 5% a day stocks. NTRI is such a stock since it does 10% a day during holds. Next you can set up what I call a "slush money" list for stocks that will be doing much better. Thses are one day trades that yield 15% or better. To have all of these kinds of lists takes some sorting skills. you can imagine what Cramer would be like if 10 minutes were spent on showing all the kinds of lists I mentioned. ET would be different if the list we put up daily as well. this is just icing on the cake, though. Later in the year we can work on this when the time is right. Currently their are many people who do not do these things who are explaining that all of this is not possible. For them it will never be possible because they will choose continually to not make it possible. This may seem like a rambling post. If it is, then you are not able to stand still long enough to let what I am saying sink in. I am making a mental impact on what you may be able to think about, if it is possible for you to do so. If it is not possible, then you have now found that out as an alternative to thinking along with me. How things work happens in a context. I threw in the contemporay context and how the context has been perculating in some ways.. Hopefully other items cross your mind and connections are made. for many people there is the possibility that thinking about this stuff affords them the possibility to consider that the years before them can turn out very differently than they think is now possible. There is a clue in this post that can change everything for a person who is still able to think as he reads. some people will actually print this post and hilite it and think about the consequences of what will happen to them if they begin to get oriented to making money. This is merely a ball park picture kind of post. Refences to 100's pages of other aspects can be a consequence of reading this post. It then comes down to batting practice. Making uo the first 50 lists will happen for some people. They will see the lists working in real time. They will see that there are lists of stocks that average 2 1/2%, 5%, 10% and greater. They will catually see the volume hit the values on the one page chart that is laying on their trading desk. They will see that they have a window of time to enter those stocks and they will see how to hold the stocks to make the money that is ther e to be made. Fast forward 10 years. Right. Anything in the world is possible to fix that is busted.
ET doesn't have the capability for me to attach it (maybe it does and I am dumb) and the moderators will ban me if I post links to other web locations, they have told me. It was a condition of my being allowed to return to ET. I do not want to weasel around this but there is a need by ET to keep their vendors happy, etc. I can't see how I have derrogatory impact but I have not thought it through thoroughly. I am keeping with the rules. Being an amateur and passing things forward gratis is still not a concept that works well. The jounals are running and they have lots of links to reference information.
price action is king. that means: draw lines all over your chart and study how price reorients itself around these lines. combine that with volume, and you now have all you need to trade successfully in any condition. those indicators are all the same. you know the ones, those oscillators that everyone knows about. yeah, sure, sometimes they'll give you a clean signal. however, all it takes is that next trade where your "overbought" sell short signal sticks like glue to the top of your chart and causes you to chase chase chase. only thing useful about those indicators is the occasional divergence trade.. and even then, divergence is counter trend, and on trendin days it can be painful. price action + volume = the key to success. thats about as much help as i can provide, because as you all know, once traders develop a profitable strategy, they'll hang on to their secrets for dear life. it is no different for me.