Indicators or Internals?

This post is in reference to day trading the index futures.

I have done a search for internals on this site and it seems that there really arent many ETers using them. This makes me believe that I am on to something.

Most new traders believe they can find the holy grail through some special indicator that tells you what to do and when. I fell in this category for a few years.....unfortunately.

It seems to me that the best index daytraders use price, volume, trendlines, s/r(levels), and internals to really nail the markets. The indicators are there just to confirm. Not to tell you where to take the trade. This would be more akin to how the floor traders trade.

I was hoping we could get a discussion going from those who were successful in day trading the futures.

I would love to find what internals you focus on and how one would best learn the ins and outs of using them for daytrading. The main internals i see that would be useful are A/D, premium, Tick, Trin, and upvol/downvol. Are there any others that you guys use?

btw, i do think for swing or intermediate term trading, indicators can be very helpful. Daytrading, on the otherhand is a different animal.....

All replies will be welcome and appreciated.

Just another clown in hopes of improving his game.

Merry Christmas All.

jc

 

I have looked at the advanced – decline and the up volume – down volume on 1 minute charts for daytrading. It’s like any other indicator, it lags. The A/D line pretty much just follows the market. The U/D can show some divergence sometimes. Like on a big down day, when there is a rally for a couple of minutes, the U/D might keeps trending down, which shows the market should turn back lower and make new lows. This is just what I’ve observed over a few weeks of watching it.

I used to listen to the Shadow Trader broadcast on Think or Swim. The S&P would turn up 10 points and the he shouts out something like, “watch out guys, a/d line starting to move positive.” It’s sort of after the fact.

 

I agree with Sandy...internals lag and tend to follow the market. BUT, I do keep track of them, but more as a confirmation tool and a tool to use to keep out of bad trades (fighting the trend). I find internal data is more useful though in finding divergences in intra-day trading to stay with the overall trend (not get caught in a fakeout in one direction or the other). Other than that I feel the A/D lines are useless, but looking at breadth on a daily basis can offer some useful tracking tools for market divergences. (ie, market matching recent highs but breadth much weaker, tells of a turn in the making).

 

Is it really any wonder to any of you that nothing exists to allow you to predict the future with anything better than 50% accuracy.

 

Have you guys looked at Trin or $Tick for intraday trading?

 

trin is no longer working due to toomany invert ETFs according to shadowtrader, here is the video from the shadow on how to setup the internal screen
http://www.shadowtrader.net/videos/bonus_internals_08.html
the rest of his vids
http://www.shadowtrader.net/videoArchive.html

 

Thanks nkhoi.... is shadowtrader someone you would recommend? I do agree that internals can help show the bias when price is at key levels.....

do you use internals for your trading and have you found them helpful?

anyway, thanks for the links.

 

Smart traders use intenals to confirm all of their trades.

There aren't to many (if any) people around ET who know what they are or how to use them at this point.

 

I use the SP 500 underlying volume as a divergence indicator against the ES contract. When the direction of each diverge, I look to trade the ES on a trendline break in the direction of the volume. Here is a small chart:

 

I don't put myself into the category of successful trader yet, but watching advancing and declining issues along with only trading in the direction of the current short term daily trend and getting in on pullbacks has totally changed my trading results and makes the day much less busy. Now it's just watch and wait, also rereading The Trading in the Zone by Mark Douglas helps (a hell of a lot). I know there are many ways to trade but this has helped me.