I have not been daytrading but I did for about 7 years full time. I found a few internals good for timing pull back trades. But that was before all the computer driven programs screwed up the clarity. I suggest you tell us what type of trading day it at 10 everyday. If you start to nail it, I will daytrade again.
I don't trust UVOL-DVOL itself as it can be a bit screwy... It's totally useless when the market gaps up/down. If the market opens exactly level with the last close UVOL-DVOL gives a correct reading on the market sentiment. I never understood TRIN. It just acts like a random spaz. I create my own internals index and rules based off of the NYSE Tick and Nasdaq Tick. Those are what I am actually watching when I'm trading. I just intermittently check the Volume just to make sure it's not hitting "potential crash" type panic selling pressure. Generally on the big down days where you can instantly eat 10 handles within 10 minutes if you enter a long... Volume is tanking HARD. Today is really kinda hairy... We are technically breaking down a bit, internals are flatline to pushing down... The smart buyers are sitting around waiting for either an uptrend or a capitulation. Everyone is just sitting around looking at each other saying "You buy first, no you..." LoL... If I had to guess id say we capitulate down. Just waiting for the next move to occur then I start trading again. I kinda avoid big moves and trade the small stuff.
Why I say down again is most likely before the next rally... Were running out of time... No buyers came in midday. Fear is building again in the longs. I prefer trading long. The market just forced me to do shorts earlier as it was the higher odds thing to do. Cmon capitulate so we can rally! Today totally wasn't the scenario I was expecting. I was expecting rally out of the gate then midday sell-off looking over the charts this weekend. Some EU news hit the market this morning? I don't pay attention to news.
Time to take a breather and step back and look at the big picture... And get some lunch! We only have around 4 more days left in this rally before we need to retrace again on the daily. Assuming this market behaves like the last weekly top... That leading indicator should turn over at around 30 or so... Then it's time for some real shorting again! But, the real bear market is lurking out there around June both technically, and when the fed twist program ends.
Internals review again... Eh... Nothing... Trade long or short for both the NYSE and Nasdaq states my rules. That means I can either take long setups off the lows or short setups off the highs. Ok, lunch for real now. You would think the market would either start to rally or capitulate for a rally move already. Grrr...
Ok, I had enough of watching the market today. Cyall latez! Internals rule! I should have shorted every single NQ bounce into resistance today... Not just a few, but my heart rate starts getting too high. LoL... Not even touching the last hour with technicals like today... Internals keep me in the right trade even when I incorrectly predict market direction!
For as many ticks in a trading day there are different ways to trade. I trade two timeframes(3M & 1M) and 4 signals first 30 minutes in ES, then drop oneM chart and only trade one signal for next 4.25 hours, then resume with 4 signals and three M chart last 2 hours. Lunch time, 4.25 hours, offers the most chop and unless I wait for deep retracements, pointless for me to trade at all. Market internals for me except for daily charts have been pointless for day trading. If I can't find at least a 85% profit ability(wins/BE's) in it, I look at it as unworthy for me. The main goal I seek is keeping losing trades under 5% based on weekly stats, of course that is a goal not always reached, but more times than not. And only acheived by strict money management rules. Since I keep my losing percentages down, I can average down on each trade, losses are staggering, but weekly gains are highly consistent, but I never ever recommend anyone to do this as most don't have the money management rules strict enough to concentrate on not losing. Most won't trade last 45 minutes, but often times there are consistent 1-3 points in there to dig out. My Profitable/breakeven trades average 6.85 minutes on last 3000 trades. I set an alarm after 6.5 minutes to make me aware where price is in relationship to target. Think most important indicator is me being able to identify between price patterns and indicators.
Good post Handle, I like the discipline of switching timeframes, and how winning trades last 6.85 minutes. I am working towards exiting my trades more quickly, as the longer I linger, the more opportunity I give to fear/greed to enter the picture.
That must be very exhausting mentally, trading the short time frames. Might be better of automating it, if your system is mechanical. Good points anyways. Any tips on your 'strict money management' rules.
The problem with methods, as we gain more experience, the nuances start becoming quite huge, and to program all of them will take years. My long term Commodity method took two years to completely program and it just spits out what to do tomorrow. I do have 4 automated methods, but this last method is too lengthy, and just don't want to tackle that right now. Somewhere in past posts, I have some 40% of my money management rules. I believe as one's experience of screen time evolves, knowing when to give price an extra minute before locking in a tick of profit is impossible to explain, but if one keeps the mouse moving checking previous highs/lows even if they are not pivots can aid me in taking profit earlier than a target. Size of bars will tell me when to reduce my targets as well, if 3 minute bars are 2-3 ticks in range, thats about all I can make and be happy with that amount. Once I make my Daily Goal, anything after that is gravy. Toughest part of trading is waiting for me now.